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  • Writer's pictureMichael Breslin

5 Action Items You MUST Take to Pass Your Next Medicare Audit

Updated: Oct 21, 2020

The Key To Success Is Being Proactive!

The key to passing a Medicare, Medicaid, or any payor audit is preparation. Business owners typically fail to get in front of this new way of doing business and wind up going into panic mode once they receive an audit notification. This normally leads to failing at least one level within the audit process and opening yourself up for additional scrutiny… and it can all be avoided by simply taking a few proactive steps now.

Payor audits, unfortunately, are not going away. Business owners and leaders MUST understand this and make the necessary changes to adapt and learn how to succeed in this heightened regulatory environment…or it can cost them dearly.

The impacts of failing an audit simply are not worth the risk of not being proactive and spending a little now to avoid paying a lot later. Depending on the type of audit, failing an audit could lead to:

1. Increased DSO, unbilled revenue, bad debt and decreased cashflows

2. Be tagged with 100% pre-paid audits; meaning that every claim that you submit to that payor would be reviewed BEFORE paying the claim

3. Temporary suspension of your contract

4. Revocation of your license, NPI, or contract

5. Future audits such as RAC Audits or, where fraud is suspected, ZPIC audits

6. Criminal prosecution in cases of fraud

NONE of those potential risks appeal to me at all; nor do any of them seem worth the risk of continuing business practices that attract audits and reviews.

While there is no way of avoiding audits, there are some proven action items that you can take today to begin “audit-proofing” your business and give yourself a high probability of passing any audit that may come your way.

5 Action Items That You MUST Take To Pass Your Next Audit


I have been, and will continue, to preach that accurate (to LCD/payor standards) AND timely documentation is the FOUNDATION of success. Without compliance and quality in your medical records, you simply cannot pass an audit or maximize your earnings potential. Every business type, such as home health, physicians, skilled nursing, and DME all have different requirements, but the approach must be the same. Get compliant with your documentation. There are NO SHORT CUTS here. Whether it is a verbal order (DO), WDO, assessment, RUG score, progress note/chart notes, testing, wound measurements, a DIF, etc. You must learn the documentation requirements for that payor. The good news is, if you follow Medicare guidelines, you are typically compliant with everyone. Some cases may be overkill, but for the simplicity of having one decision tree, this would be the tree that I would recommend that you start with.

An easy way to begin the documentation learning process is to review medical documentation checklists provided by Medicare and use them internally when processing orders and claims.

2. Avoid Making Coding Errors & Modifier Errors

Many payors have edits that will automatically deny a claim if the primary code does not match the product or service category that you are submitting the claim for. For example, in the DME world of Urology, the primary ICD-10 MUST be permanent Incontinence of Retention. Neurogenic bladder can be a secondary ICD-10 but it can NOT be the primary. A Neurogenic bladder “may” cause retention or incontinence, but in order to qualify you MUST have retention and/or incontinence. Many physicians will argue that Neurogenic bladder covers it. Well, it does not in Medicare’s eyes. So, you must learn how to explain this to your referral sources and have the correct primary ICD-10 in the 1500 form. To prevent coding errors, make sure you take the time and invest in the resources to KNOW what codes are required to bill and then put a QC process in place to ensure the coding is correct BEFORE submitting the claim.

Additionally, you will need to educate your referral sources so that they document the medical records correctly with the proper code, proper documentation requirements, timely requirements, documenting test results, and plans of care correctly to support the claim.

Regarding Modifiers, it is paramount that your modifiers are correct. Once again, a bad or missing modifier will cause a denial. The higher your denial rate is, the greater the chance that you will wind up in an audit.

3. Improve Your Knowledge

The rules change almost daily. You must have a process or partner that will keep you abreast of the changes and how they impact your business and train your team, so they are equipped with accurate, and not tribal, knowledge. Tribal knowledge is worse than no knowledge because your team “believes” they are knowledgeable, and they actually become more dangerous than effective. At least a new team member with limited knowledge will ask questions. Let’s make sure when they ask, they are given accurate and complaint answers so they can do their job effectively and efficiently. Far too many businesses touch on training, or have what I call checkbox training where they have a list of training topics that they briefly cover and then check the box that they provided the required training. Once again, this is dangerous; not effective.

4. Perform Independent Mock Audits

You can’t fix what you don’t know. There are companies that specialize in payor audits and they will perform mock audits for you. Boost Advisory Group has proven track record and they will conduct a comprehensive review of your files for as low as $35 per file. Any file that they review and approve they guarantee 100% or they will fight the appeal 100% FREE of charge.

I strongly suggest an Independent audit versus an internal audit for the following reasons:

1. The independent auditor is experienced in all aspects of clinical requirements, billing requirements, and documentation requirements. This is what they do, and it is their job to be accurate.

2. An independent audit should provide detailed reporting that identifies errors, drivers, and corrective actions so you can begin “audit-proofing” your business.

3. Internal audits are only as good as the auditor. If the internal auditor is reviewing the files based on tribal, inaccurate, or incomplete information, then the results will be inaccurate, and the audit will be useless.

4. Internal audits sometimes are under pressure from the executive leadership to find convenient results that once again miss the goal of the audit. Which is to find errors, find the drivers, and suggest effective corrective actions that produce the audit results that you want and need.

5.Utilize the Mock Audit Results to Improve Your Business

The reporting that is provided to you should illuminate areas of improvement that need to be implemented in order to achieve sustainable audit success. Most likely you will find that opportunities for improvement exist in training, knowledge, quality control review, unbilled revenue management, and/or submissions. Sometimes the truth hurts, but in this case, it is the medicine that your business needs to achieve operational and financial excellence. Be happy that you now know what is needed and how to achieve it.


Boost Advisory Group has a proven team of DME Executives, Licensed Clinicians, and Experienced Product Specialist to offer its clients effective training, documentation outreach services, mock audit services, and audit response services to ensure your success.

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