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Legal Implications of Medical Billing Audits on Provider’s Practice

Healthcare frauds happen knowingly and unknowingly. Sometimes the providers at practice are not even aware of the fraudulent billing practices happening at their facility. Nevertheless, when a complaint regarding faulty billing or noncompliance is filed, the legal implications are quite high. And the first sign that the provider is under scrutiny for questionable felony is when the State or Federal government conducts a medical billing audit at their practice. If the audit findings turn out to be risky, it will be proceeded by serios investigative procedures. 

Types of audits conducted by authorities

Federal medical billing audits and the audits conducted by Medicaid and Medicare services are run by hired professionals. When a provider is marked down with frequent billing errors and fraudulent coding practices, the authorities can rightfully ask for the medical records and billing documents to run an audit. The risky areas found in an audit can be billing frauds, wastage, errors or any violation from the standard procedure. The first step of rectifying the error will be paybacks. The practices will be asked to return the overbilled amount in the first place. This can be contested legally if they really believe the auditors were going over the top with the audit process. 

Another important thing to keep in mind is that, the auditors hired by authorities have the right to ask for any number of records from any time period; sometimes even up to 3 years back from the date in question. It is crucial for a provider to make sure that he/she co-operates with the auditors. Otherwise, chances are, the further payment get frozen till the investigation is over. They possess the power to arrive at the provider’s practice at any time they choose and interview anyone of the staff as they wish. 

Sometimes medical billing audits are conducted by Medicare administrative contractors where they review the claims before processing the payment. If they find the claim processing is illegit, they have the right to deny payment. There are error rate testing contractors appointed who acts as auditors for the auditors. This process gives an idea on what errors are prone to happen commonly. So that auditors can work on the repeating trends among errors. 

Billing fraud crimes commonly encountered

Upcoding is the most common type of violation encountered in a medical billing audit. It is a potential billing fraud where a service rendered is projected as a more expensive one in the coded document. Then there is fraudulent billing, where the documented service was not rendered to the patient in reality. Unbundling is another type of faulty coding practice, where a procedure with a single code is broken down and projected as multiple services to bill more. Yet another scenario happened, where a patient had expired but the facility kept sending bills on his name for years to receive reimbursement. Sometimes violation is in the date of service or place of service shown in the documents. With which the same treatment is claimed on multiple dates which was actually nor the case. 

The best way to eliminate the risk of getting caught by authorities for fraudulent billing is to conduct internal medical billing audits periodically. Keep monitoring the billing policies and adopt up to date compliance education to save your practice from penalties and defamation.

Practolytics

Practolytics is a 20+ year old healthcare technology and management company. We partner with healthcare practices to provide end-to- end solutions including medical billing, healthcare consulting and practice analytics, allowing practices to eliminate revenue cycle management inefficiencies.

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