High Rate of Post-Audit Denials What You Need to Avoid

    High Rate of Post-Audit Denials
    What You Need to Avoid

    By Justin Vaughn, CPC, M.Div
    Director of Compliance

    7/18/2012

    Recently, Noridian, the Medicare carrier for much of the Northwest, issued an audit report regarding vertebroplasty and kyphoplasty services.  While you may not perform these specific services in your own practice, the report is nevertheless instructive in illustrating the audit processes of at least one Medicare carrier.  Significantly, the audit report indicated an average error rate of 90%; that is, 900 of 1,000 such audited services were ultimately deemed ineligible for payment.

    The Noridian report went on to outline the reasons for such a high provider error rate—many of which amount to what healthcare attorney David Vaughn labeled as “Government Gotchas.”  These included:

    Late Documentation.  The primary reason for these post-audit denials was late submission of documentation by the provider.  In response to a Medicare request, providers have 45 days to submit documentation in support of a questionable claim.  Nevertheless, the report shows that a quarter of these providers failed to meet the 45-day deadline.  This could be because they didn’t have knowledge of the following technical requirements:

    1. The deadline cannot be extended; so, if it is one day late, the claim is denied;
    2. The 45 days runs from the DATE OF THE LETTER, not the date you receive it;
    3. The records MUST BE RECEIVED within 45 days, not merely sent within 45 days;
    4. They must be received, in particular, by the processing department within 45 days. Accordingly, Medicare actually recommends you get it to them within 30 days “to allow appropriate time for processing of the documentation.”

    Insufficient Documentation.  Noridian noted that the documentation it received from providers “overwhelmingly” consisted of nothing more than a procedure note.  Apparently, this is not sufficient for Medicare purposes.  They aren’t just checking to see if you performed the procedure; they want to see documentation that supports the medical necessity for the procedure.   Noridian even suggested that if such supporting documentation was at another facility, such as an office or ASC, it would be up to the provider to obtain these records and forward them to Medicare within the 45-day document production period.

    Inadequate Diagnosis
    .  The audit report indicated that, in many instances, the claim form omitted the required diagnosis codes as required by the applicable Noridian medical policies (termed Local Coverage Determinations, or LCDs); or alternatively, the LCD diagnosis code was present on the claim, but not adequately supported by the records reviewed.  Noridian has stated that billing a diagnosis code that is not supported by the progress notes is “suspicious of fraud.”

    Unmet LCD Requirements. Medicare LCDs often contain onerous documentation requirements.  It would behoove you, then, to review the LCD, find the documentation requirements listed therein, and incorporate those requirements in your progress note or procedure report.  For example, Noridian’a audit report pointed out that providers’ documentation:

    1. Neglected to state that the patient failed conservative measures;
    2. Failed to conduct a comprehensive pain evaluation that examined all the patient’s pain generators;
    3. Failed to state that the vertebral fracture was the primary pain generator;
    4. Failed to address whether the patient’s symptoms interfered with his/her ADLs.

    Insufficient Signatures.  Noridian found that progress notes often went unsigned.  Curiously, this was especially prevalent in the case of electronic records.  This underscores the importance of providers working with their IT staff to ensure that their EHR system is properly programmed to provide an electronic signature on each of these medical documents.

    I want to thank attorney David Vaughn of Baton Rouge, LA. for bringing the Noridian audit report to our attention.

    The information presented herein reflects general information that is current as of the date it was first published.  In light of changes that may occur in the health care regulatory and compliance environments, the author’s presentation of this information might become outdated.  Please check with your individual legal and/or compliance advisor(s) prior to taking any significant actions based upon the information and advice presented.