Medicare Compliance & Reimbursement

Question: We treat pediatric patients, so we don’t submit many Medicare claims, except in rare circumstances. Our new practice manager keeps asking us to create an audit preparation plan, but why should we worry about audits if we don’t really deal with Medicare?

Texas Subscriber

Answer: Medicare is not the only payer that performs audits of medical practices. You could also get audit requests from private payers, Tricare, or Medicaid.

These non-Medicare insurers also audit documentation, medical necessity, coding, and billing as well. So even if your practice does not work with Medicare and Medicaid, it is still subject to audit from any third-party payers that may want to audit the practice.

Some practices say that they do not participate with any insurances and that protects them from audits. However, since the practice provides a receipt to the patient for reimbursement, listing CPT^® codes and ICD-10 codes, the private payers can also request copies of the documentation and audit the practice’s notes. Additionally, these insurers can submit complaints to the State Department of Insurance, the State Medical Board, and the States Attorney General if they have a problem with the business practices they find at the medical practice. Practices are never immune from oversight from payers.

Example: A patient presents with both Tricare and Medicaid. Knowing that Tricare is always the secondary insurer, you bill Medicaid as the primary payer and then you submit any balance to Tricare.

Reality: This would be accurate if the patient had both private insurance and Tricare, but Medicaid always gets billed last, even if Tricare is the other payer. It’s certainly possible that Tricare or Medicaid could review your records to confirm your billing practices and review your processes.

Remember: To avoid issues like this, always verify coverage through the coordination of benefits program before a patient presents to your practice so you know exactly what types of coverage they have. If a patient has another insurer in addition to Medicaid, do not bill Medicaid until the other insurers have already processed the claims.