What you need to know about Medicare audits

Now that the COVID-19 pandemic is behind us, increased demand for home care services, combined with an increase in Medicare audits, can create new challenges for providers. Compared to Medicare’s lax guidelines of the past few years, audits are becoming more strict and more numerous. Here’s what you should know about where the audit process has been, and what to expect now.

Pre-pandemic audit process

Before the pandemic, Medicare initiated a program called TPE—targeted probe and education. It’s designed to help providers reduce claim denials by monitoring the volume of appeals and denials. If Medicare sees too many, they’ll start sampling claims to identify the issue.

When Medicare initiates a TPE audit, they send a notification that covers the review process, what topic will be reviewed, and the reason your business has been selected. In round one, 10 claims are reviewed. If this review finds no errors, the audit is closed. If errors are found, there is a round of education, and then suppliers have 45 days to make adjustments or process changes. The review, education and adjustment cycle continues until the supplier reaches an acceptable error rate.

When the COVID-19 pandemic hit, healthcare providers and payors made swift, major changes to how care was provided and covered to make sure people could still get the care they needed. There were changes to guidelines and requirements around telehealth visits and accepting transcriptions and video recordings as part of medical records, among others. Medicare largely stopped doing TPE audits, and also eased some requirements, including relaxation of some paperwork deadlines, and the government eased specific criteria in some local coverage determinations.

Getting back to normal

Through our work with customers, we are seeing a substantial increase in Medicare audits. So far in 2023, we have seen TPE audits more than double over 2022. Although that increase may seem sudden, Medicare has been moving toward this for a long time.

Before the pandemic, when an audit or an appeal was denied, if you had sufficient documentation Medicare allowed you to submit to the highest level of appeals: ALJ (administrative law judge). When you submitted an appeal to ALJ it sometimes took up to three years to talk to a judge to justify the medical need for the equipment, mostly because there weren’t enough staff to process these appeals. When the pandemic hit and Medicare paused audits, this allowed them to get caught up on their back log.

But now, because Medicare has adequate staff, providers are seeing more appeals transition to an audit. What’s more, we’re starting to see audits from managed care organizations, too. These can be complicated because some of them use a mixture of state and CMS guidelines that is not formally documented, making it difficult to manage your response.

How we help you prepare for an audit

Almost all providers are seeing a lot of turnover and are behind on work. When we work with clients who are being audited, we focus on making it easier on Medicare. The easier we can make it for them, the better they’ll assess and pass your documentation.

It’s important to be thorough. For example, you should page inserts should include the documentation behind them. If you’re an organization that dispenses equipment like Neb Closets, Medicare won’t recognize that your intake document is also your CMN and your delivery ticket unless you spell it out.

Brightree RCM has a dedicated Medicare audit department and an established process for responding to audits that takes the burden off the customer while keeping them informed at every step. RCM provides support during any audit by adding all the claims Medicare has selected to a spreadsheet that is uploaded into the customer’s My Files each day, allowing them to track the status of current audits.

If a customer gets a denial or an audit letter, the first step we review is order confirmation. We check everything from patient demographics, prescription, and physician information to shipping and delivery verification. Although we offer two levels of order confirmation, we always recommend the audit-ready confirmation to give our customers added peace of mind.

The team will then carefully review the audit letter and any documentation in the patient account. If all documentation is available, RCM will submit the response online directly to Medicare. If more documentation is needed, the RCM team will work with your team to capture these requests, helping to ensure the response is complete and submitted by Medicare’s deadline.

Revenue cycle impacts

Of course, handling audits comes on top of managing all of your normal business needs. With ongoing staffing challenges, many providers cannot afford the time and effort it takes to respond to these audits. But they can’t be ignored: failure to pass the TPE can lead to providers going into 100% prepay, which means claims won’t be paid until Medicare looks at the documentation, which can take anywhere from 30 to 45 days, potentially creating cash flow issues. The importance of managing these audits can’t be overstated.

There’s a good chance the number of audits from Medicare and other payors will continue to increase. Having experts you can rely on relieves some of the stresses related to managing an audit. Brightree RCM is ready to help keep your business running smoothly.