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3 FAQs for providers facing Medicare prepayment audits

On Behalf of | Dec 14, 2021 | Health Care, Medicare & Medicaid |

Over the past two decades, the U.S. has tried to curb fraudulent health care provider Medicare claims through greater oversight. Prepayment audits are one method that the government has begun using to prevent reimbursement for faulty claims.

Unfortunately, if providers do not know how to handle a prepayment audit request, it may result in both immediate and lasting harm to the business itself.

Who performs prepayment audits?

The Centers for Medicare and Medicaid Services may employ Zone Program Integrity Contractors to investigate potential cases of abuse, fraud or waste. ZPICS may use sophisticated data mining algorithms and other methods to discover billing abnormalities that may be evidence of fraudulent business practices.

What factors might trigger an audit?

Examples of factors that may trigger a Medicare prepayment audit and/or a denial of prepayment claims include:

  • Failure to provide proof of the medical necessity for services, treatments, medications or equipment
  • Complaints by patients, employees or company whistleblowers
  • Data analysis that reveals billing irregularities or inaccuracies
  • Illegible or insufficient documentation or lack of appropriate signatures

How might an audit impact a provider’s business?

If a representative discovers fraudulent or wasteful behavior during an audit, ZPIC may suspend Medicare payments and require that the provider reimburse overpayments. A poor audit result may also lead to review before the state licensing board, revocation of provider’s licenses or even civil or criminal charges.

A Medicare fraud conviction can have a serious impact on health care providers. From delays in receiving reimbursement to potentially devastating administrative or criminal penalties, even the charge of careless or inattentive record-keeping may result in significant damage to a business’s reputation and viability. If facing an audit, providers should know that acting quickly may help to minimize the potential impact of a fraud claim.