Preparing for a UPIC Audit? Examine These Eight Claim Elements

Just because a certain treatment regime is medically necessary does not mean that it will be covered by Medicare or Medicaid. We believe that this element constitutes the most important question to be answered by a provider. Government payors only cover medically necessary services and supplies.

As you can imagine, regardless of the fact that services ordered were medically necessary, the services must actually be provided in order for those services to be billed and paid. When you are preparing for a UPIC audit, as part of your internal auditing and monitoring, should you find instances where you cannot show that a medical service or piece of durable medical equipment was provided, you must return any funds that have been received. Equally important, medical services must actually be provided at a level of quality consistent with Medicare’s expectations or the expectations of the covering payor.

Remember, a UPIC is specifically instructed to detect and refer instances of fraud, waste and abuse. ^[1] When you are preparing for a UPIC audit, your review of claims should not be limited to merely a review of the documentation. You need to also examine your organization's business relationship and business practices. For example, is there any evidence that the service or supplies are linked in any way to a breach of the Federal Anti-Kickback Statute or Stark’s prohibition against improper self-referrals? Similarly, is the service or claim associated with a possible violation of the civil False Claims Act? In recent years, we have see an increasing number of cases where otherwise payable claims were tainted due to the fact that the referring or servicing provider was excluded from participation in the Medicare or Medicaid programs. ^[2] The bottom line is fairly straight-forward: it is insufficient to merely show that a claim appears to meet the government payor’s basic medical necessity, billing and coding rules. You need to also verify that the way the business was generated or referred was proper and not due to a statutory violation.

The next point to be addressed when auditing a claim is to determine whether or not it is covered by Medicare or Medicaid. It is important to keep in mind that a medical service or supplies can be medically necessary yet still not qualify for coverage and payment. Ultimately, every service or claim, regardless of whether the beneficiary is a Medicare or a Medicaid plan participant, must be examined to see if it qualifies for coverage.

It is essential that you pull each and every regulatory issuance, along with any guidance issued by the state which sets out the documentation requirements associated with a particular service or claim. After auditing literally thousands of claims, we have found that over a majority of the health care providers we have audited have never fully researched and reviewed applicable documentation requirements. As UPIC clinical reviewers of both Medicare and Medicaid claims are quick to state in hearings before an Administrative Law Judge (ALJ), “If it isn’t documented, it didn’t happen.” When made during an ALJ hearing by a UPIC, this point is quite effective—it is extremely difficult for a provider to prove that a service was provided if there is insufficient documentation of the work conducted in the patient’s medical records. Therefore, research, review, and confirm the precise documentation requirements to be met, then ensure that you take the time to fully and accurately document the work you have performed.
UPIC auditors are excellent at identifying one or more ways in which your claims do not meet applicable coverage requirements. While you may very well disagree with their assessments, especially in “medical necessity” determinations (when you file a request for redetermination appeal and later, a request for reconsideration appeal), you will find that your Medicare Administrative Contractor (MAC) and your Qualified Independent Contractor (QIC) agree with the UPIC's denial decision. Rather than endure significant costs and stress when defending against an overpayment assessment, you need to take steps to avoid a denial in the first place. To that end, health care providers should ensure that clinical staff members are fully trained and educated regarding Medicare’s documentation, coding, and billing processes. It is very important that you show your clinicians that UPICs enforce a strict application of Medicare’s documentation and coverage requirements.

Unfortunately, even if the foregoing rules have been met, it is quite simple to make a coding mistake, therefore invalidating the claim. The coding rules are both complicated and dynamic, potentially changing from year to year. We recommend that you either engage a qualified third-party billing company to assist you with coding and billing or ensure that your in-house staff members handling these duties are experienced and provided regular opportunities for updated training.

As a final requirement, health care providers must ensure that the services or claims performed fully meet Medicare or Medicaid;s billing rules. Once again, you need to ensure that your staff is properly trained to handle the organization’s billing responsibilities. As you review your billing practices, you should abide by the following: First, “If it doesn’t belong to you, give it back.” ^[3] Conversely, if you don’t owe the money, don’t automatically throw in the towel. Discuss these claims with our attorneys to determine if there may be other arguments in support of payment that may be asserted.

Remarkably, even if your claims fully meet the first seven elements, that doesn’t necessarily mean that a claim has been properly paid. Over the past year, we have handled several cases where the claim was properly coded and billed but still resulted in an improper payment amount due to software processing errors or mistakes made by a clearinghouse. It is therefore imperative that you check to ensure that the reimbursement amounts made by a CMS administrative contractor are correct. In summary, in order to qualify for payment, a claim must meet each of the eight components set out above.