Receive An Audit Letter From An Insurance Company? Here's What To Do:

Upon receiving an audit letter from an insurance company, it's crucial to understand what the notification means and how to respond appropriately. Ignoring such correspondence can lead to significant financial implications or even the loss of network participation so your prompt response is a must. Here are a few steps to help you navigate the audit process, including details on how to get more help when needed: 

Intention Of Letter 

The first step upon receiving any official communication from an insurance company is to determine the reason for the letter, who sent it and what is being requested. Carefully read the entire letter and pay attention to the details. Make note of key information or anything that seems unclear. Key determinations to make: 

• Reason: Is the letter, in fact, concerning an audit? Or is it a records request on behalf of a Medicare Advantage (MA) plan regarding a Risk Adjustment Data Validation (RADV) audit? In an RADV audit, records are requested because The Centers for Medicare & Medicaid Services (CMS) requires MA plans to validate the accuracy of claims paid for high-risk patients. 
• Sender: Audit letters and record requests typically come from a third-party contractor. To confirm the legitimacy of the request, contact the payer. CMS maintains a directory of review contractors that may be contacted to verify the authenticity of a CMS audit. 

All legitimate audit letters will itemize the claims under review and provide a link to a secure portal for uploading requested documents. If the notification you receive is electronic, you should receive a hard copy as well. Medicare recently issued a fraud alert about phishing requests received by fax for medical records. CMS does not initiate audits via fax and has advised providers not to respond to these requests. Providers should work with their review contractor to confirm that the audit is real. 

Compliance With Audit Requests 

Failure to comply by the specified response date can result in the recoupment of all funds associated with the claim. This policy is strictly enforced to ensure timely processing and accountability for all submitted claims. It is imperative that all necessary documentation and actions are completed by the designated deadline to avoid financial penalties or delays in reimbursement. 

When records are requested, it's crucial to provide everything asked for during the initial submission. This will significantly streamline the process, preventing delays and further requests for information.  

During the process of gathering requested records for any type of audit, if you find any discrepancies, DO NOT edit them. Send the records as they are. Editing could lead to a determination that documents have been falsified — it is better to add an addendum to the chart if corrections need to be made. However, if you identify that your practice made errors in billing, consider including a letter that explains your team has recently received training on how to bill correctly and is no longer billing incorrectly. Additionally, certain audits allow for discrepancies to be addressed through appeal rights. 

It’s also important that the rendering provider review all records before they are sent or uploaded to ensure awareness of the request and its scope. 

Special Considerations For RADV Audits 

MA plan record requests can be extensive. For example, one PECAA member practice received a request for 52 records. Before sending the documents, the practice invoiced the MA plan $2,600, charging $50 per record to account for the time and resources required to compile and upload the files to the contractor’s secure portal; Consult with your PECAA Billing & Coding Advisor for more information on invoicing the payer. If your practice has limited staffing, you may request a reduction in the number of charts or ask for an extension to complete the request. 

Self-Auditing 

All practices should conduct a self-audit at least annually. This helps boost ongoing compliance with regulations, identifies areas for operational improvement, and verifies the accuracy of billing and coding practices. Regular self-audits help to proactively address potential issues before they lead to more significant problems, such as penalties, legal challenges or financial losses resulting from an audit. 

PECAA offers auditing services that can provide you with a better understanding of the accuracy and efficiency of your billing procedures and how you can maximize payments by addressing identified areas for improvement. Engaging with PECAA's Billing & Coding Records Audit Program can help: 

• Ensure your billing and coding procedures comply with current recordkeeping/documentation criteria required by Medicare and other major carriers; 
• Support the ICD-10 and CPT codes you are billing; and 
• Examine if alternative codes are available that may yield a higher reimbursement. 

Additional Support  

If you identify areas where you lack confidence or have a knowledge gap, consider enrolling in PECAA’s Optometric Billing and Coding Certification Program. This comprehensive 15-week program is offered twice per year and includes in-depth training for eye care professionals operating within the billing & coding capacity of the practice. 

Ongoing education is provided to PECAA Max and HEA Advantage members through The Coding Coach webinars and newsletters. In addition, PECAA Max members have access to dedicated Billing & Coding Advisors for no additional cost. 

If you have received a concerning letter from an insurance company, read carefully, understand the details and respond promptly to their request. PECAA Max members, don't hesitate to reach out to PECAA’s Billing & Coding Advisors for assistance.