How to Appeal Audit Results

How to Appeal Audit Results

Inspections and audits are a normal part of working in healthcare. The industry deals with what is most precious to most of us — health. It’s also the fourth largest industry in the United States, amounting to as much as 8% of the nation’s GDP. Inspections and audits that help industry professionals stay on top of their game, and keep processes as streamlined and efficient as possible are an important part of keeping the whole system working.

That being said, they can be the most unpleasant and disruptive things that can happen to service providers. When Zone Program Integrity Contractor auditors, or ZPICs, put your institution under an audit, they can request documents that date as far back as they see fit. They can request as many documents as they need. They can come to your facility and perform interviews. And they can use statistical sampling and extrapolation that don’t necessarily give a clear picture of the institution’s coding and billing practices. Why are they doing this? To prevent Medicare fraud. In fiscal 2016, the government recovered more than $3.3 billion from healthcare fraud-related judgments and settlements.

What to Do When Investigated?

There are two pieces of advice that are usually given to providers who are being audited by a ZPIC auditor for suspected fraud. The first one is to cooperate fully, promptly, and honestly. No messing with records or back-changing things. Give them whatever they want and make it as organized as you possibly can. If you need to hire help, hire it.

The second is — if you can find grounds for appeal, appeal against the unfavorable results of the audit. An audit can be devastating for a service provider — it can lead to large payments for settlements and penalties. Providers can lose the ability to charge Medicare. People can end up in jail.

The First Step of Appealing

The very first thing you should do when launching an appeal is hire a lawyer or a legal consultant who has experience in the field. In-house lawyers who specialize in healthcare law can be useful, but you need someone who specializes in Medicare and insurance audits.

Finding grounds for appeal should be on the top of your list of priorities. Possible grounds include a misapplication of Medicare billing regulations, improper review of information, or inaccurate conclusions. It might also be possible to appeal on the grounds that the sampling and statistical methods used weren’t proper.

Understand the Appealing Process — Stages One and Two

The appeal process has five stages, although service providers often stay within the first three stages.

The first stage is redetermination. You file it with the Medicare Administrative Contractor (MAC) who sent you the demand letter after you received the results of the audit from ZPIC. You shouldn’t expect to achieve much at this stage because MACs and ZPICs work very closely together.

The second stage is reconsideration. You file it with a Qualified Independent Contractor or QIS. By this point, you should have all of your documentation ready for filing, as the QIS will need to examine the claim, as well sampling procedures. Still, you don’t get a hearing at this stage.

Stage Three — ALJ Appeal

If stage two doesn’t work, you move on to stage three — the most important stage in the process, and the stage where you can actually get some results. The appeal is filed with the Office of Medicaid Hearing and Appeals, and the provider gets to appear before an Administrative Law Judge or ALJ.

As a provider, you will get the opportunity to present and explain documentation to the ALJ. An Administrative Law Judge is an independent instance with no vested interest. ALJ is also the instance where appeals have the highest success rates, and where you can actually defeat extrapolation. This stage should be the focus of your appeal process.

If the results of stage three are unfavorable, you have two more options. You can appeal to the Medicare Appeals Council if there were legal errors in stage three, or if the ALJ’s decision wasn’t based on the weight of the evidence. This appeal is risky because you don’t have an opportunity to be heard, and even the parts of ALJ’s decision can be overturned. The second option is going to the Federal District Court. It’s a very formal setting with witnesses and testimony and can be very expensive. So the bottom line is: get help, get it early, and start preparing for the ALJ appeal right away.