Preparing for a Vision Plan and Medical Insurance Billing Audit
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Medical insurance and managed vision care (MVC) billing audits can be stressful, time-consuming, and costly for eye care practices. That’s why it’s critical to have a process in place to protect your practice (and sanity) before you get the dreaded audit request letter, or the auditor shows up at your door.
Because vision plans are often a significant component of a practice’s revenue, and audits are happening more frequently, following contractual agreements can help prevent audits. In addition, the Centers for Medicare and Medicaid Services (CMS) has resumed Medicare audits after a short hiatus last year due to the COVID-19 pandemic.
Below we will discuss what can trigger a medical insurance and vision plan audit, how to prevent audits, and what to do if you get audited.
What is a Medical Insurance Billing Audit?
An insurance audit identifies and evaluates the performance of a healthcare provider by reviewing documents to ensure accuracy. Audits show if the provider complies with vision plan and insurance payer guidelines and federal and state regulations. Non-compliance can lead to costly fines, paybacks, exclusion from insurance panels (including Medicare, Medicaid, and TRICARE programs), and criminal penalties.
What Are Random and Targeted Insurance Audits?
There are two types of audits: random and targeted. Insurance auditors rarely show up at the practice unannounced; however, some vision plan auditors may show up unannounced. Typically, you receive an official letter that provides all the information the auditors need so you can comply with their requests.
Random (quality control) Audits: A random audit is the most common type. This involves the auditor requesting a sample of patient records with a designated period (such as within the last three months) that are chosen arbitrarily to check for compliance problems.
Targeted (focused) Audit: A targeted audit occurs when a provider bills for services that are outside the norm of the eye care profession. The number of requested patient records varies, usually ranging from 30 to 100. The audit can focus on a number of services, billing for repetitive services, billing too often for diagnostic services, or billing for services that aren’t common to eye care. Audits can go back many years.
To give you an idea, the most common targeted audit optometrists encounter is if they overuse Level 4 and 5 Evaluation and Management (E/M) codes, or overuse the comprehensive ophthalmology codes and bill for non-medically necessary diagnostic testing.
What Can Trigger an Insurance Audit?
The patient complains to the insurance payer or MVC plan and reports they did not receive the billed services from the provider.
Overcharging the patient can lead to surprise audits. For example, the provider hasn’t adjusted the amount the patient owes based on the contractual agreement the provider has with the MVC or insurance plan. Overbilling and underbilling can lead to removal from the insurance company’s panel.
Sending a claim for the same service to the vision plan and medical insurance payer.
Documenting inconsistent or inaccurate data in the patient’s health record.
Upcoding for a procedure you didn’t perform (also known as overcoding). This can occur if the doctor met with a patient for a few minutes but the coder billed for a 45-minute exam.
Undercoding is the opposite of upcoding, meaning you leave out codes in the patient’s record or you code for fewer services than the patient received.
The provider chooses the incorrect diagnosis code or modifies the diagnosis in hopes of getting reimbursed.
Unbundling or using multiple CPT® codes for various parts of a procedure.
Filing the same claims multiple times by changing the National Provider Identifier (NPI) and Tax ID number for different providers just to get paid.
Performing too many tests on patients that are not medically necessary. Insurance payors perceive this as fraudulent billing. The CMS Medicare Fraud & Abuse: Prevent, Detect, Report Booklet provides resources and guidance that help protect the Medicare Program, your patients, and your practice.
How to Prevent Medical Insurance Billing Audits
Enter accurate patient demographics into the patient record. Charge entry is one of the most important steps in the medical billing cycle—it’s where you create the insurance claim.
Scrub your claims to confirm you assign correct medical billing codes and modifiers. Misusing medical billing modifiers can trigger an audit that can lead to hefty fines. Medicare audit fines might be as high as $10,000 for each occurrence. This means every time you bill a modifier on a claim incorrectly, you may have to pay $10,000 for each occurrence. That adds up quickly.
Clearly document the patient’s history, exam, assessment, and plan. When you document the chief complaint, provide a concise description of the problem, laboratory test, and the number of units performed—this will help if you are ever audited. A missing chief complaint can result in a claim denial based on incorrect levels of care.
Confirm that the diagnosis and procedure codes are correct or the patient identifier and/or provider identifier (NPI) isn’t missing or incorrect. Don’t forget to indicate the number of units performed.
Evaluate medical documents and physician notes to ensure you are not undercoding or overcoding services and procedures.
Avoid performing unnecessary tests (not medically necessary).
Remain diligent with Local Coverage Determinations (LCD) and Medicare Administrative Contractors (MAC) in your area and sign up to receive payer listserv updates.
Never bill both vision plans and medical insurance simultaneously for the same service.
Inform patients about their financial responsibility in advance. If you suspect that Medicare (or commercial non-Medicare insurance) may not cover a procedure or service, you must obtain an Advance Beneficiary Notice of Noncoverage (ABN) before providing the specified procedure or service to the patient.
Do not continue the procedure until the patient signs an ABN and accepts financial responsibility for non-covered services. Always file the signed ABN in the patient’s medical records. The ABN is invalid for any contractually obligated write-off.
Adhere to your insurance payers and MVC plan contractual obligations.
Post payments in your practice management system correctly and often. Ensure you are assigning them to the correct patient. Remember, some payers have strict refiling rules, limiting your time to appeal a claim from the remit date.
Perform a mock audit to help identify weaknesses and inconsistencies.
Auditing and Compliance Pro Tips
First, don’t panic, but do take the audit seriously if you are audited. If you have someone on your staff who manages insurance audits, inform them immediately.
Comply with the deadline. Reply to the auditor well in advance of the deadline. Even though you may have a few weeks (or more) to gather the records once you receive the letter, responding quicker lets the auditor know you are taking the audit seriously.
If you need more time due to a complex audit, request an extension and ask the auditor specific questions if you are unsure what is required. For example, confirm the deadline date, how many patient charts are needed, and other necessary documentation. And ask if there is a reason for the audit.
Verify the patient records before you send them to the auditor. Double-check that printed documents are prepared properly following the audit policies and procedures before sending them to the insurance auditor. Always keep a copy of everything you prepare for the audit. Include a detailed cover letter with the final package and list the exact information that the auditor requested.
Never modify or alter the patient’s medical record an auditor requests, even if you find errors. Keep a detailed list of every mistake and discrepancy you find in a log.
Carefully review each claim for accuracy. Check for coding errors, such as undercoding or overcoding. Make sure the medical record relates to the dates referenced on the audit.
Train your staff to be diligent in documenting patient medical records and the billing process. Never delegate the medical coding process to someone who can’t make medical decisions.
Taking a Proactive Approach to Optometric Billing
Audits aren’t fun, but they can be a positive learning experience. Use the insurance audit results as an educational tool to train your staff to improve internal processes. Make these processes part of your ongoing quality assurance and compliance plans.
Don’t let incorrect billing processes affect the financial health of your eye care practice. Complete, proactive optometry billing and revenue cycle management solutions are what Fast Pay Health optometric billing solutions prescribe. We know the ins and outs of your MVC and insurance payers best, and we work with any ophthalmology and optometry practice management software.
Request a free practice analysis today and see how Fast Pay Health takes a proactive approach to improve the financial performance of your practice.
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