What are My Risks in an Insurance Audit
- All payers have significantly increased
their auditors and number of audits. Increasing your chances of being
- Many audits are random.
Some are based on a
review of past claims and reimbursement.
- It is important
to note, most EHR systems are not compliant. The auditors know this and use
this in their audit.
What is the Insurance Audit Process
- Once a practice is selected and prior to the audit, auditors review
your previously submitted claims looking for issues.
- They select a set of patients based on those claims they think will
fail! Between, 40 – 100 patients.
- This is never a random selection. The auditors want to make sure
the records selected will result in denials.
We refer to this as "Cherry Picking"
- Because they pre-select , this typically results in a failure rate
In all the audits we have been asked to appeal, we have
never seen less than 90% failure of records reviewed!
Because of the pre-selection, we also heard from auditors, they
fail over 90% of practices audited!
- The auditors apply the failure rate (typically 90%)
to all the reimbursement paid to you over multiple years.
is referred to as “Extrapolation”. The auditors then add Interest and
Penalties to that amount.
This is an actual
audit finding showing penalty calculation. Extrapolation:
% of Records Failed 91%
Total Reimbursement 2010 –
2015 $127,569 (Only $17,000 was identified. Rest is Extrapolation.)
Failed % of Total
Total Due by
What do the auditors
One of the easiest things to find is the recording of Chief Complaint,
Patient History, Medications and ROS
Chief Complaint - most techs enter "eye exam" or "referred by" or
other phrase. The auditors always deny the exam!
History, Medications and ROS - most technicians simply pull
forward from previous. This is "Cloning" and is denied
- Even though EHR systems have exam verification, unfortunately the auditors
find these "verified" exams non-compliant
The most common exam type for medical exams, is not documented
properly in most EHR systems.
Frequently the auditors find these "verified" exams completely
missing required components of compliant exams.
Practices that failed an
Unfortunately, we actually spend more time helping practices
that failed an insurance audit!
This is only a few of the cases of failed audits we are currently or
previously worked on appeals.
Practice Size Penalty
Two doctor $1,500,000
One doctor $650,000
Two doctor $1,090,000
One doctor $195,000
One doctor $270,000
One doctor $210,000
One doctor $75,000
One doctor $156,000
One doctor $220,000
One doctor $195,000
Every week we
hear from multiple practices that asked for help because they failed an
You need to protect your practice!