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  • Writer's pictureMichael Breslin

Types of Medicare Audits

Targeted Probe and Educate (TPE) Audits

· CMS authorizes its MAC’s to conduct Medicare audits of providers and suppliers whose errors rates are higher than their peers related to:

o Billing practices

o Utilization rates (allowables)

· MACs also target providers and suppliers that bill for HCPCS or services with high national errors rates or are focused items/HCPCS

· Includes up to three rounds of reviews and includes 20-40 claims reviewed per round

· If you pass the first round, you will not be reviewed again for that HCPCS, by that contractor, for a year. All other reviews by that MAC and other MACs remain in play

· If provider/supplier does not pass the first round, the MAC will conduct an education session with the provider/supplier and then wait at least 45 days to begin the 2nd round of review.

· If provider/supplier does not successfully pass the review within the three rounds, then the MAC will refer the provider/supplier to CMS for further disciplinary actions that may include:

o 100% pre-pay audits for all claim

o 6-month suspension of billing privileges

o Revocation of Medicare license

o Referral to OIG for criminal investigation

Recovery Audit Contractors (RACs)

· These are companies who are contracted by CMS to identify overpayments and underpayments

o Overpayments are returned to the Medicare Trust Fund

o Underpayments are paid to the provider/supplier

· RACs are HIGHLY motivated and COMPENSATED to focus and find overpayments

o RACs generally receive 9%-12.5% of the overpayments that are returned to the Medicare Trust fund.

o RAC’s found over $900,000,000 in improper payments between 2015 and 2016 alone

§ Approximately, only 18% were underpayments.

Zone Program Integrity Contractors (ZPICs)

· Charged with implementing and enforcing the Medicare Benefit Integrity program

· Involves identifying cases of Fraud: the most serious of audits as these are fraud-based investigations, whereas, RACs, MACs, and TPEs typically are error based.

· ZPICs utilize a variety of proactive and reactive techniques to identify and address any potential fraudulent billing practices.

o This can be via ADRs which could cause great financial damage to the provider/supplier, due to the fact, that all documentation must be submitted, and the appeals process must be completed before the provider/supplier can get paid on the claim

· ZPICs receive referrals from RACs and MACs in additional to their own data analysis to identify potential fraud

· ZPICs utilize date mining from other audits, processed claims, data sharing amongst the various Medicare contractors, etc.

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