Tips to Surviving a Third-Party Audit for Behavioral Health Services

Wednesday, May 17, 2017
FLORIDA COUNCIL FOR COMMUNITY MENTAL HEALTH
Tips to Surviving a Third-Party
Audit for Behavioral Health
Services

Prepared for Florida Council for Community Mental Health
May 17, 2017
Page 1
Objectives
 Predicting and Preparing for an Off-site Audit
 On-site Audits
 Top Mistakes
 Tips on Appeal Language
 Keys to Success
 Going Forward
 Sample Audit Plan Framework

Predicting and Preparing for an Off-site Audit

May 17, 2017
Page 3
Be Aware of the Red Flags
 Audits and investigations are frequently the result of a
complaint received by the third-party payer.
 Disgruntled patients
 Disgruntled employees and former employees
 Competitors
 They may also be triggered by internal third-party payer
data.
 Requests by third-party payers for a copy of more than
one medical record at a time could be a red flag that you
are the subject of an audit.

May 17, 2017
Page 4
Preparing for Off-Site Audits
 Determine who is requesting audit.
 “Routine” audits (those that do not involve some suspicion of false
billings or fraudulent activities) should, nevertheless, be treated
extremely seriously, and the provider(s) being audited should give the
matter personal attention.
 Respond to medical record requests in a timely manner. This will
allow the facility the time needed to do its own internal audit or to
have an outside auditor review the charts.
 It’s helpful to determine why the records are being requested.
 When you receive a request for medical records, do not alter the
documents.
 Make a copy of everything sent to requesting party.
 Provide all notes relevant to the encounter or admission being
reviewed.
 Do not only submit the physician’s notes.

May 17, 2017
Page 5
Preparing for Off-Site Audits (cont.)
 When the charts are submitted, include a cover letter which shares
any findings from your own internal audit, the steps that have been
taken to correct the problem and, if appropriate, reimbursement for
the claims related to the requested charts.
 These steps should become part of the practice’s compliance plan
related to billing.
 Consider consulting with a billing expert for the audit. This is
especially important if you handle your own internal billing and use
self-trained billers. The person who oversees your day-to-day billing
cannot complete an audit of their own work.
 Depending on the size and type of audit, consider having an
independently retained auditor hired through legal counsel.
 If there are findings that present legal concerns, the legal privilege may
provide some additional protection.

May 17, 2017
Page 6
 Make sure all medical records are legible and legibly copied. If the
record is not legible, have the illegible record transcribed and
include the transcription along with the handwritten or illegible
records. Make sure that any such transcriptions are clearly marked
as a transcription with the current date it is actually transcribed.
 Label the new material accurately. Do not allow any room for there to be
any confusion that the newly transcribed part was part of the original
record.
 Include a brief summary of the care provided to the patient with
each record. The summary is not a substitute for the medical
records, but will assist an auditor that may not be experienced in a
particular specialty or practice area. Make sure that any such
summaries are clearly marked as summaries with the current date
they are actually prepared. Label the summary accurately and
clearly.

May 17, 2017
Page 7
 Send all communications to the auditor by certified mail
(or express mail), return receipt requested so you have
proof of delivery.
 Properly label each copy of each medical record you
provide and number the pages (by hand, if necessary) of
everything you provide the auditors. Medical record
copies often get shuffled or portions lost or damaged
during copying, storage, scanning, or transmission.

May 17, 2017
Page 9
Tips for On-site Audits: Communication
 Immediately call and make telephone contact with auditors.
 Immediately call your attorney and ask him or her to attend the audit
and site visit.
 Assign one staff person to be the communication liaison with the
auditors (and your attorney).
 Do not guess the answers to any questions the auditors ask you.
 Ask questions of the auditors in an attempt to obtain information
about any special areas of concern.
 Do not voluntarily advise the auditors of suspicions of wrongdoing,
nor ask whether your policies or procedures are correct.
 If you need additional time, request it by telephone and confirm it in
writing.

May 17, 2017
Page 10
Tips for On-site Audits: Your Facility
 Make sure the appropriate administrative personnel and
at least one physician who sees the requesting-payer’s
patients are present in the office during the site visit.
 Make sure your office is "photogenic.” Inspect your
office, and call for an emergency housekeeping visit, if
necessary.
 Make sure all displayed licenses and certificates are
current.
 Make sure all patient health records are properly
secured and that your medical record handling and
storage comply with Health Insurance Portability and
Accountability Act (HIPAA) standards.

May 17, 2017
Page 11
Tips for On-site Audits: Visiting Auditors
 Set aside a separate room with chairs and a flat surface
(a desk or table) for the auditors to use as their meeting,
conference, and interview room.
 Require proper photographic identification and
identifying information from each member of the audit
team.
 Verify credentials of on-site auditors.
 If the records needed by the auditors are in a different
office of the practice, don't overextend yourself trying to
obtain them during the site visit.

May 17, 2017
Page 12
Tips for On-site Audits: Documents
 Keep good, legible copies of your transmittal of
documents to the auditors, and maintain a record of
what you sent.
 Keep a copy of every document or paper you provide to
the auditors during the site visit.
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May 17, 2017
Page 14
Top Mistakes
 Panic-clouding judgement
 Do not panic and make fundamental mistakes in the way the
audit is handled in an attempt to make it go away quickly.
 Outline a plan to respond to the audit, starting with which staff
must be alerted to the audit and which business professionals
must be contacted immediately.
 Calling the auditor
 Typically, most third-party payers notify physicians by certified
mail that they are under investigation. However, if contacted,
limit all communication to prevent misunderstandings;
communication should be through text.
 Any telephone communication with the auditor should be
followed up with a letter confirming the telephone conference
and any pertinent details.

May 17, 2017
Page 15
Top Mistakes (cont.)
 Failing to respond in a timely manner
 Facilities should begin preparing their response by
having all of the requested charts pulled.
 It is important to act promptly. Delays can create
suspicion.
 Copies should be made of all of the relevant materials
that have been gathered.
 Pay close attention to the requested deadlines in the
notice. If you are unable to accommodate the time
frame specified, you or your attorney should contact
the appropriate party to request an extension.

May 17, 2017
Page 16
 Altering a medical record
 After receiving a request for medical records from a
third-party payer, facilities should not alter the records
in any way.
 If a clarification is necessary, it should be done only as
an addendum, on a separate sheet of paper, or in a
narrative form to accompany the record.
 Falsifying medical records can convert an otherwise
defensible case into a career-ending fraud case.

May 17, 2017
Page 17
 Refusing to hire a consultant
 An outside opinion regarding the accuracy of the
documentation that was selected for review can
provide insight regarding the audit’s goal.
 A coding consultant may also be able to identify
deficiencies.
 Knowing potential problems in advance can help the
physician successfully defend the audit, and the facility
may be able to provide the reviewer with supporting
documentation that justifies the service.
 A coding consultant may help identify other problems
(e.g., illegible charts or incomplete histories) and offer
advice on how to prevent such issues in the future.

May 17, 2017
Page 18
 Failing to protect the confidentiality of a
consultant’s report
 Protecting the confidentiality of the practice’s
information from third-party discovery requests is one
of the most important steps physicians should take
when conducting an internal audit.
 Before hiring an auditor or a consultant to review
records, facilities should have council retain the
consultant.
 The attorney-client privilege and work product doctrine
are two rules that can be used to protect the
confidentiality of a physician’s information.

May 17, 2017
Page 20
Appeal Language
 Include an explanatory note and any supporting medical
literature, clinical practice guidelines, local coverage
determinations (LCD), medical/dental journal articles, or
other documents to support the claim.
 Within the appeal, spell out why the payer denied the
claim and clearly respond to why the denial was not
correct.
 Use specific entries from the medical record to refute the
denial.

May 17, 2017
Page 22
Tips for Favorable Outcomes
 In a letter (or through testimony, if you end up in court), you have the
opportunity to explain what you did but failed to record. Did you
review the patient's history but fail to sign the form? Did you chart by
exception, noting only positive findings? If a hearing officer or judge
agrees that the service took place, you won't have to refund
anything to the carrier.
 If your production is comparable to that of your colleagues, this
consistency can be excellent evidence in your defense.
 If possible, do research on the individuals who conducted the
review.
 e.g. A gastroenterologist reviewing behavioral health cases may not
have the appropriate credentials or understanding to opine on
applicable services.

May 17, 2017
Page 23
Tips for Favorable Outcomes (cont.)
 Interview colleagues, nurses, and utilization review personnel to
determine if they can be potential witnesses or assist in the appeal.
 Even if the carrier can point to a written policy, there is a real
possibility that the policy is invalid. Carriers regularly create policies
that conflict with the Medicare statute or regulations.
 If the audit has resulted in extrapolation, hire a statistician to confirm
the proposed numbers.
 Extrapolation should only be applied to claims that are similar in
nature. Behavioral health cases must be reviewed case by case.
 Thoroughly document medical necessity.

May 17, 2017
Page 25
Looking Ahead
 Conduct an annual billing, coding, and documentation
review for inpatient and outpatient services.
 Establish coding, billing, and documentation policies and
procedures.
 Establish specific protocols for responding to external
audits.
 All facilities should identify an internal representative for
all third-party payer audits.

May 17, 2017
Page 26
Looking Ahead (cont.)
 Facilities should meet with their entire team to discuss
the reasons claims are most frequently rejected or
denied.
 Pull a random sample of charts for each billing provider
and determine if documentation improvements can be
made.
 If the facility has a written compliance plan, it should be
evaluated to make certain it is being followed by all
involved employees.

May 17, 2017
Page 28
Sample Audit Plan Framework:
Communications
 Response Team
 Compliance Leader
 Business Office Lead
 Practice Administrator
 Health Information Management (HIM) Director
 Permission to Communicate with Auditors
 Establish policy regarding who can speak with the auditors.
 Send a summarizing letter after every phone conversation.

May 17, 2017
Page 29
First Steps
 Contact either in-house or external legal counsel.
 Notify the response team and provide it details of the
request.
 Work with medical records team to gather all
information.
 Designate an individual to thoroughly review all
documentation being sent to auditor.
 Copy all documents being sent.
 Conduct an internal or external review of the documents.

May 17, 2017
Page 30
On-site Visit Procedures
 If permissible, work with the auditors on arranging a time
where all key employees will be available.
 Prepare your team for any questions that may be asked.
 Schedule follow-up meetings with all individuals
interviewed by the auditors.

May 17, 2017
Page 31
Questions?

PERSHING YOAKLEY & ASSOCIATES, P.C.
800.270.9629 | www.pyapc.com
Lori Baker, CPC, CHCA-F, RHIA
lbaker@pyapc.com
Thank you!
Denise Hall-Gaulin, RN
dgaulin@pyapc.com

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