“I just got a certified letter from Acme Health Plan demanding money,” an exasperated Dr. Wyle E. Coyote explained to his health care lawyer over the phone.

“Tell me a bit more,” the lawyer quietly responded.

“Well, I got a letter a long time ago asking for copies of medical charts for about thirty claims I submitted, and I gave them the copies, and they are saying I now owe them all the money back and they will take it out of my future payments,” Dr. Coyote reported.

“Okay take a breath and let us break it down to see what can be done,” the lawyer advised.

And, so, that story goes on repeatedly in health care today. Audits abound and not just from Medicare anymore, but commercial payors too. So what to do?

Responding to audits conducted by commercial carriers or audit firms of a carrier may seem innocuous compared to audits in the Medicare or Medicaid program, however, audit processes and appeal rights vary widely from carrier to carrier, time frames to respond can be short, and demands for repayment quickly can turn into large amounts that impact on the cash flow of a practice or worse.

Smaller practices generally do not have the financial resources to engage auditors to shadow audit what a health plan is reviewing nor do they tend to have the internal trained staff to respond effectively.

Given that backdrop, sometimes physicians respond with incomplete records and a tone in a cover letter that is less than professional. In the above scenario, there even may be some missing correspondence that Dr. Coyote overlooked in his busy practice that set forth a reconsideration process of a desk audit or appeal rights and important dates within which to respond before an audit is considered final.

At the very least, when both audit requests and the audit results are presented to a medical practice, the practice should try to assess the nature of the audit (who is asking for what and why), whether the audit process is consistent with carrier policies or any state law governing medical services agreements (if any), and whether the practice is able to provide the cold and objective documentation necessary to counter the carrier’s initial conclusions.

The point for the practice is to respond in a professional and timely fashion, and if possible, preserve objectivity issues such the possibility that a desk auditor will be reviewing his or her own conclusions. Many initial desk audit findings can be reversed with the documentation contemporaneous to an episode of care including ancillary documents such as phone logs, calendaring logs, etc.

More common today in audits are blanket allegations of problems with electronic health record (EHR) documentation such as using automated charting functions, cutting and pasting of history and physical information, and cloning of records. Practices need to clarify such allegations with the carrier especially if the EHR is indeed accurate for the chart being reviewed.

With respect to the process itself, a practice needs to keep tabs on response dates and make reasonable and documented requests for additional time to respond especially if carrier letters appear backdated or use time frames that are unreasonable.

If larger problems exist, the practice should consider seeking legal advice and see if the practice has any available insurance coverage such as errors and omissions coverage or endorsements to general liability policies that might at least provide some coverage for legal fees and costs necessary to respond to the audit.

The frustration for Dr. Coyote is that he feels second-guessed and will end up providing free services to patients if any error no matter how small is found. There is a grain of truth in what Dr. Coyote is feeling, however, when someone else is paying the patient’s medical bill under a myriad of insurance rules, there should be some expectation the accuracy of the billing process will be checked from time to time.

Dr. Coyote simply needs to get familiar with the process, respond as objectively as possible, and be prepared to bring in some assistance if problems do arise.