Audit Headaches? Then Get Documentation Up Front

Getting audited is not a question of 'if' but 'when.'

For 10 years, I worked in various roles at various Medicare
contractors, but I spent much of that time in the area of program
integrity working as a fraud analyst, Medicare fraud information
specialist and fraud investigator. In my many years in that role,
it was ingrained in me that durable medical equipment suppliers
were inherently bad. It was my job, as an investigator, to protect
the Medicare Trust Fund.

I remember the moment that things started to change for me. I
had conducted an audit on a small family-owned HME in the Midwest,
a company that had been in business for a very long time. The audit
resulted in a significant overpayment that would have a devastating
impact on the company's ability to remain in business. The
overpayment was identified because, perhaps, the company had become
lax over the years in keeping up with Medicare policies and
guidelines and was not getting supporting documentation up

I remember the owner of the business, who had inherited it from
her father, called me up and cried over the phone, begging me for a
different outcome. My hands were tied, and all I could offer her
were her appeal rights.

I mention this because with the proliferation of audits, the
issue that has, by far, caused the biggest problem for providers is
insufficient physician documentation. The burden of being placed on
prepayment review or appealing large overpayments is costly and
overwhelming for most HME businesses.

After I hung up the phone with the supplier I audited, I
realized that I was quite possibly taking away this woman's
livelihood because of careless mistakes in not following convoluted
policies. The policies did not require that HME companies get
documentation up front, and most companies didn't.

Years later, the industry still isn't getting documentation up
front in most cases. The big difference, though, is the
government's huge increase in funding for audits and increased
oversight that requires suppliers to provide sufficient physician
documentation to support their claims. In this specific case, as
with countless others, the overwhelming majority of claims denied
because the physician documentation was deemed to be

Don't Take the Gamble

I assumed at the time that getting physicians to document things
accordingly was easy. I realize now how very wrong I was.
Unfortunately, most auditors that work for the government or its
contractors haven't yet come to this same realization. I've tried
relentlessly to portray the difficulty in this task, but I'm not
certain the message gets through.

As the agency responsible for administering Medicare, CMS
instructs audit contractors on what to do. These contracts are
enormously sought after. The Zone Program Integrity Contractor
(ZPIC) Zone 5 contract, for example, was awarded at nearly $108
million. Therefore, these companies must be able to show their
worth to CMS. While ZPICs are not reimbursed on a contingency basis
like Recovery Audit Contractors (RACs), they do report "cost
savings" to CMS that is often touted as a measure of their

During my tenure at Medicare, I did play a role in weeding some
really bad guys out of the system, but that was certainly not the
majority of companies I audited. What I saw was that CMS was
drafting more complex and intricate Local Coverage Determinations
when the real fraudulent suppliers don't care what the policies
state. They don't care that there is a face-to-face requirement or
that a detailed written order must contain seven elements. What I
saw was that legitimate suppliers providing a needed service to
Medicare beneficiaries were getting claims denied for reasons often
outside their control, and the policies only made it more difficult
for the good guys.

Here's the thing: We may not agree with the Medicare policies
that are in place, but if you want to accept money from the
Medicare Trust Fund — taxpayer money — then you must
play by their rules. If you have not yet been audited, you will

You must be proactive, and you may need to change the way you've
always operated. You should get as much documentation as you can up
front and review it before filing any claims to Medicare. While
you're not required to do so, if you don't, then you are doing harm
to the industry as a whole by taking a gamble that when asked to
provide the documentation, it will be there and will be

I can tell you now that the odds are not in your favor. In my
experience, it is very rare that physician documentation is
adequate to meet the strict policy requirements. But as the
supplier, you are liable for that payment unless you have a valid
Advance Beneficiary Notice on file. That's a gamble this industry
simply cannot afford to take anymore.

Pushing through the Pushback

Many HME providers that have implemented processes to obtain
documentation up front report getting pushback from physicians and
losing referrals. The most common complaint from physician offices
is that HME companies are asking for too much documentation when
Company XYZ doesn't ask for it or just has them complete a form. So
they end up losing that physician as a referral source and lose
patients to the other company.

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