5 things you need to know to survive a Medicare audit

October 04, 2021

Important facts to help prepare and successfully navigate the auditing process.

It is not uncommon that ambulance providers are faced with Medicare audits. There are several types of audits performed by the Medicare Administrative Contractor(s) (MACs). Typically, there are two forms of MAC audits: a prepayment review and a post-payment review.

It is essential for the ambulance provider and billing staff to be well-informed of the latest Medicare regulations to ensure all claims billed are within compliance standards. Failure to meet Medicare regulations can have significant consequences, up to but not limited to, future payments withheld, repayment costs, steep financial penalties, etc.

It is important to identify any Medicare audit correspondence easily and efficiently during the billing cycle to prompt immediate actions that may be required. For example, the ambulance provider will have up to 30 days to submit the required documentation, and the MAC has up to 60 days to send its response. If the MAC does not receive information in the time allotted, the outcome can result in an automatic denial.

Here are the five things you need to know to survive a Medicare audit:

  1. Become familiar with what common factors may trigger an audit by the MAC. The most common contributing factor when a MAC initiates an audit is based on a statistical analysis performed. The MAC examines three key elements of an ambulance claim:
    • Is the transport an Advanced Life Support (ALS) or Basic Life Support (BLS) transport?
    • Is the transport an emergency or non-emergency response?
    • Is the ambulance transport medically necessary?
  2. Know what to expect in both prepayment and post-payment reviews.
    For a prepayment review, the ambulance provider will receive an initial letter requesting documentation for the selected claim(s). It is expected that the MAC will review each claim individually. These are usually triggered when the MAC identifies a high inflation in ALS or emergency emergencies the geographical market[1]. A post-payment review consists of the ambulance provider’s entire universe, using a set of randomly selected trips for statistical analysis (i.e., RAT-STATS). The provider must provide a copy of the medical records for all claims identified. If the results show a high error rate confirmed by the MAC, the rate is extrapolated to all the claims across the provider’s universe within the date range on the random sample[2]. EXAMPLE: If the final error rate shows 50% on 90 randomly selected trips over 24 months, then Medicare can justify applying that error percentage to every claim submitted with that timeframe.
  3. Accurate medical documentation and constant training for medics and billing staff.
    For the medics, all documentation must be accurate, timely, and complete. Documentation is a fundamental part of patient care. While the primary job of a medic is to provide effective patient care, the Patient Care Report (PCR) plays a vital part of the patient’s medical record. Therefore, proper documentation is a skill set that should have constant training updates. Billing personnel is the gatekeeper for Medicare billing. The Billing Department must thoroughly evaluate the PCR and any supplemental documents associated to the transport to ensure sufficient information about the patient’s condition and the reason the service is medically necessary. Training as well as a good quality assurance program can demonstrate due diligence for staying on top of the latest Medicare regulations.
  4. Appeal the results.
    An ambulance provider has appeal rights during the Medicare audit. The Medicare appeals system has four sequential levels. The first two levels are reviewed by MACs and handled by written correspondence. The last two levels are reviewed by independent contractors or an Administrative Law Judge (ALJ). It is important to exercise your appeal rights to stand behind the coding/billing decisions.
  5. Consult with a third party for assistance.
    Whether a small or large ambulance provider, it can be beneficial to seek assistance from an external compliance specialist, or third party, to help navigate/develop the process, handle billing, audits, and appeals. This allows better preparation for future audits with the intent to have a successful outcome.

In conclusion, a Medicare audit should not be taken lightly. Be prepared and institute a compliance plan, avoid delays, follow the outline above as a beacon, and most importantly, find a reliable partner or advisor to help you with your journey in order to have a successful Medicare audit.

[1] Centers for Medicare & Medicaid Services, “Medicare Program Integrity Manual – Chapter 3”. https://www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/downloads/pim83c03.pdf

[2] Centers for Medicare & Medicaid Services, “Medicare Program Integrity Manual – Chapter 3”. https://www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/downloads/pim83c03.pdf