Audit Procedures for Medicare Plans

The Medicare Recovery Audit Program investigates unusual billings by healthcare providers. To entitle your company for reimbursement from Medicare, the procedures you perform must be both medically necessary and coded correctly. If the wrong code is used, your reimbursement may be calculated incorrectly and you will be required to pay Medicare back for any overbillings. An audit may also reveal underpayments so you can get the proper compensation.


Maximize Your Medicare Today!

Save up to 75% on prescriptions and even get extended coverage.

Types of Problems

Most Medicare audit issues fall into one of several categories. Claims with insufficient documentation or no documentation at all will be sent back for more information. If a treatment is deemed to be medically unnecessary, the entire reimbursement to the provider may be disallowed. Overbillings due to coding errors or use of the wrong fee schedule will be adjusted and a demand letter will be sent to recover the difference.

Audit Procedures

An independent auditor will start the process by reviewing your electronic billings for the past three years. If something looks suspicious, he will notify Medicare of the issue and request permission to delve deeper into your records. Medicare may choose to send one of its own auditors to assist or allow the independent contractor to handle the case himself. Some indicators of a possible problem include statistical outliers, an unusually high number of rare codes or codes outside of your medical specialty. The audit may be conducted through the mail or via fax if only a few pieces of information are required. More complex audits typically involve an on-site visit to examine your files.

Requested Documentation

Provide all documents listed in the auditor’s request letter. Include the complete records for each patient, such as diagnostic tests, x-rays, medical history questionnaires, doctor’s notes, consent forms and discharge orders. Provide invoices and purchase orders for medical supplies that have been reimbursed by Medicare. Make sure all records are clear and legible.

Appeals and Rebuttals

You can send a rebuttal letter to the auditor within 15 days of receiving the demand for repayment. You also have the option of requesting an appeal. If your appeal is approved, your case will be reviewed by an independent contractor who will affirm the demand letter, reverse the entire amount or reverse a portion of the demand. If all or part of the demand is upheld, you will have another 60 days to file a second level appeal. The procedure for both first and second level appeals are the same. Third level appeals are ruled on by an administrative law judge, federal court or Medicare Appeals Council.


Signup for Our Newsletter!

The Medicare World Plus blog is updated weekly. Stay in the know with the latest news.

Up Next...

blog image

Medicare World Blog

CA Residents: Privacy Notice for California Residents |