Due to the passage of the Affordable Care Act (PPACA), social services providers that receive Medicaid funding will be facing even closer examination. The Medicaid audit program has been given $350 million to fund anti-fraud programs that will attempt to find improper payments, over-payments, and even criminal behavior. This new program is similar to the Medicare Recovery Audit Program in that it will pay independent auditors a fee based on improper or fraudulent payments that they recover. The goal of this new program is to save Medicaid over $2 billion in the next five years and be able to give $900 million back to the states.
The Centers for Medicare and Medicaid have just published their final rule on September 14th, detailing implementation of the Medicaid Recovery Audit Contractor program. Many physicians, hospitals, and human services providers have complained about the Medicare recovery process in the past because of the aggressiveness with which the auditors handled their investigations – they were being paid for finding errors and over-payments and tended to be extra vigilant to the point of harassment. Of course, states will be paying back providers for any underpayments that the auditors uncover.
States will begin implementing the Recovery Audit Contractors (RAC) process starting on Jan. 1, 2012.
The question is – are you ready for even more audits?
Physicians and hospitals will be burdened by this but social services agencies are already stretched so thin, to the point of breaking, by all the funding reductions at every level and by the increasing demand for services. Adding in the time, energy, and labor expense that will be required to review past billing claims (even if it is only the past 3 years) and supporting documentation could be devastating.
Many are questioning why so much time and effort is being spent to catch the billing and coding errors and the over-payments to Medicaid. They would prefer that money be allocated to training for providers to avoid billing code problems so that they are treating the disease instead of the symptoms.
And it does not appear this strategy will be a one-time operation. Medicaid audits will probably continue for the foreseeable future. As creators of electronic Medicaid billing software, we see what providers deal with before they switch over to our application. We understand why and where errors can easily occur throughout the billing process. They have to deal with coding confusion, incorrect ratio counts and rates, errors that occur when entering individual claims by hand into the system or through paper submissions, and problems with authorizations and even duplicate billing.
It has been easy for us to see that there is no intent of criminal acts when it comes to submitting Medicaid claims for reimbursement. But each state has their own unique transaction requirements and so many social services agencies have their own individual billing processes, there is ample room for error.
We see some light at the end of the tunnel. As more and more providers are switching to electronic billing solutions as well as electronic data entry for time, attendance, and documentation they will have concrete and easy-to-follow audit trails. Instead of tracking down paper time sheets from 2 years ago, agencies with software designed specifically for them can easily show electronic records to auditors to prove they are billing for services actually rendered to their clients.
Whether these human services organizations utilize our systems or another vendor’s, we can see they have a solution available that can help them with the oncoming audit deluge headed their way. But we recommend these agencies get started sooner rather than later if they are still relying on paper or Excel spreadsheets.
These audits will be the new normal.