Billing audits have been on the rise in recent years as federal officers and private insurers have stepped up enforcement efforts. New Jersey is ranked as one of the top five states in the country where billing audits are being implemented. Compliance enforcement is here to stay and is likely to increase over time, but if you proactively manage your risk and prepare for the potential of an audit, you ease the worry of such an occurrence in your practice.
There are Billing Errors and Omissions (E&O) insurance policies available that will respond to and help you through regulatory billing audits and investigations, including Recovery Audit Contractor (RAC) audits and HIPAA privacy, Stark and EMTALA proceedings. Some of the leading medical malpractice insurance carriers do offer Billing E&O as a complementary coverage for insureds. However, the limits of liability offered with this complementary coverage may not provide enough protection to fully protect you and your practice, should you be faced with an audit.
It is important to know the kind and extent of the coverage you have, should your practice ever receive notice of a pending audit. The costs for increasing your coverage and better protecting your practice may be quite affordable and less than you may think. If you have Billing E&O coverage in place, you will also have the expertise and guidance of a shadow auditor to guide you and help you minimize the burden of the audit itself.
To proactively prepare for a potential audit, consider these important steps:
- Speak to your broker about the need for Billing E&O coverage in your practice.
In today’s world the potential for an audit is real. It is important to discuss your practice’s potential exposures with your broker so that you can be guided to obtain the right level of coverage.
- Find out whether you have any coverage under your medical professional liability policy, and whether you can purchase increased limits.
You may have Billing E&O coverage and not even know it. Your broker will be able to walk you through your current coverage and point out any gaps that you may have. He or she can also assist you in understanding the process of reporting a claim.
- Understand what is covered under your policy.
It is important to understand what is covered and what is not covered under the Billing E&O policy. Most policies do not provide for the repayment of funds that are determined to have been paid in error. However, with Billing E&O coverage, you will have an advocate to assist you to challenge the claims of overpayment and potentially reduce or eradicate repayment requests. These policies often have a broad definition of billing errors proceedings that include both governmental (RAC) and commercial payer audits and investigations. In some cases, billing audits extend to qui tam plaintiffs or voluntary self-disclosure scenarios.
Typically, Billing E&O policies will provide the following:
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Coverage for attorney and audit costs, as well as fines and penalties incurred in response to actions or proceedings resulting from audit findings
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Defense costs and civil fines and penalties for billing errors, HIPAA violations, and Stark and EMTALA proceedings
- A shadow auditor to oversee the process and work on your behalf
- Comparison shop.
Coverage and cost will vary based on need. If you have basic coverage and desire to purchase additional coverage, be sure that there are no gaps in coverage between the two policies. Also, determine how limits, sub-limits, retentions and coverage differ from insurer to insurer and determine which policy best suits your need.
- Manage your risk so that you are prepared for an audit should one arise.
Be proactive by implementing billing policies and procedures and monitoring the quality of your submissions. Routinely perform random internal billing audits to make sure the proper code is used and medical documentation supports the serviced billed. Provide ongoing training to the billing staff related to coding and billing standards and requirements as they continue to change. Look for denial trends in the submitted billing. Once a denial trend is identified, correct the issue and make changes to your process. By providing accurate coding and billing for services, denials will be reduced and your practice’s return on investment will be increased. Finally, understand that an auditor cannot infer information from the chart. An auditor can only review and respond to what is documented. If your documentation does not support the level of service that is billed, you may be held responsible for overbilling.
