Stark: In Current Audit Climate, You're 'Guilty until Proven Innocent'

COLUMBIA, S.C. — HME providers face situations every day that fall into areas of gray, but the unforgiving climate of Medicare audits is all black-and-white.

Industry consultant Andrea Stark of MiraVista LLC detailed the current "guilty until proven innocent" audit environment in a March 22 webinar cosponsored by HomeCare. The requirements for receiving Medicare payments are detailed and specific, she said — and the impact of non-compliance can be swift and costly.

"There are a lot of audits and prepayment reviews going on, and this impacts the cash flow you need to run your business," Stark warned providers. "All these persnickety details don't change the inherent facts. Let's use some reasonableness here."

While she is hopeful the situation could ease in the future, Stark said, today's reality is that more and more HME companies are facing tough scrutiny from RACs and ZPICs, two of the latest weapons in Medicare's audit arsenal. It usually takes appeal to an Administrative Law Judge before there is any leeway in the picture, she said.

"A lot of these errors are being reversed in the appeals process, which represents money Medicare has tied up related to a claim that was paid properly," Stark said. "DME errors are not the same as fraud."

Still, the proliferation of audits means life is getting harder for HME providers already dealing with reimbursement cuts and increased regulation.

The four Recovery Audit Contractors align with MAC jurisdictions, and their operations expanded to all 50 states last year, Stark said. RACs focus on overpayments, identifying companies and individuals that are billing Medicare at a higher-than-average rate.

RAC post-payment audits are retroactive for three years and include both automated reviews (based on statistical data) and complex reviews. For complex reviews, documentation requests are capped at a maximum of 250 records per 45 days.

If a provider receives a payment demand (for automated reviews) or review results letter (for complex reviews), supporting documentation can be submitted to reverse the decision during a 15-day "discussion period," Stark said.

But the discussion period doesn't slow down the collection process, she noted, so it's wise to begin an appeal simultaneously.

ZPIC audits can be particularly deadly, Stark said, pointing out there are few, if any, guidelines that Zone Program Integrity Contractors must follow. Unlike RACs, ZPICs can initiate unlimited prepayment claim reviews. Also unlike RACS, there are no defined limits to the number of documentation requests a ZPIC can impose.