Audit Agony: Prepare yourself as insurers look to recoup funds

Hayes Wanamaker, MD, an otolaryngologist in Syracuse, N.Y., refers to the recovery audit process of insurance carriers as the proverbial camel’s nose under the tent.

A partner at Central New York ENT Consultants and chief of otolaryngology at Crouse Hospital in Syracuse, Dr. Wanamaker has been audited by carriers several times in the past few years, and the experience is always similar: The insurance company comes into the physician’s office on a premise like the review of billing directly related to treatment of allergy-related issues. But, while culling through records related to that topic, the insurer starts looking at evaluation and management coding, extrapolates a package of records over the course of the practice and then presents the audited office with a bill that can easily be in the hundreds of thousands of dollars.

“You may get a $300,000 request for a repayment reduced to $50,000 or $100,000, and it will cost you $30,000, $40,000, $50,000 in legal fees,” Dr. Wanamaker said. “They make it so painful to challenge them or take them on that it can ruin your practice.”

The situation is only going to become more acute over the coming months and years as carriers continue to scrap to recoup dollars amid changing federal rules. The government is getting in on the action, as well: The U.S. Government Accountability Office released a report in late March that pushed the Centers for Medicare and Medicaid Services to become even more aggressive in recovering money from physicians. The result was the launch of the Recovery Audit Contractor (RAC) program, which officially began in February with the aim of reducing improper Medicare payments.

“GAO recommends that CMS improve its corrective action process by designating responsible personnel with authority to evaluate and promptly address RAC-identified vulnerabilities to reduce improper payments,” the report reads. Put more simply by a health care website: “Providers haven’t even begun to feel the true impact of the dreaded RAC program.”

Protect Yourself

Otolaryngologists can put themselves in position to handle the process, though. While America’s Health Insurance Plans, a trade group representing carriers, did not respond to several requests for comment, health care attorneys, billing professionals and physicians say diligence and attention to detail can protect even the smallest of practices. Some of the advice is hidden-in-plain-sight simplistic: Make sure to follow the rules of your contracts with individual insurance carriers. But adhering to the sometimes labyrinthine rules of the contracts first requires a detailed knowledge of what those legal documents say.