The Chiropractic Post-Payment Audit and Review

Clearly, audits represent a windfall for insurance companies and cash-starved government entities such as Medicare. Every penny an insurance company recovers from a commissioned auditor goes straight to the bottom line, much to the delight of stockholders and bonus-laden executives.

Audit files pix

The amounts recovered by conducting these post-payment demands can be substantial.

How Insurance Audits Conducted

Typically you’ll get a letter from an insurance company or the Medicare subcontractor who services your area. This piece of unwelcomed mail will usually include a request for you to supply a dozen or so patient files to determine if your notes support the services for which you billed and were paid.

As you might expect, many insurance reviewers are financially incentivized to find deficiencies in your record keeping. So, it’s not surprising that they are frequently successful.

How Is the Amount I Have to Give Back Computed?

The deficiencies found within the sample files are often used to create a formula that is applied to all the claims you submitted to the insurance company or Medicare over the last couple of years. (How many years they retroactively apply the formula varies from state to state and provider to provider.)

For example, let’s say the auditor ascertains that they overpaid you 15% of the amounts you were reimbursed for the 12 sample files. If, during the last five years the carrier paid you a total of say, $350,000, then the 15% amount that they will want back would be in the $52,500 range.

review pixture

Can’t pay? No problem. They may allow you to continue seeing their patients (without reimbursement) until you pay off the outstanding balance.

What Are the Most Common Chiropractic Audit Triggers?

Every carrier profiles your claim history. If the size of your claims, billing codes, visit frequencies, treatment durations or other indicators fall outside of an accepted parameter (defined by them), an audit is triggered.

If you have a well-documented case, justifying your recommendations, recording functional progress and proving medical necessity, this should be nothing more than a temporary annoyance.

Based on the experience of other chiropractors, the following are some of the more common red flags that may trigger an audit:

1. Seeing a relatively high number of Medicare patients within a certain time frame.

2. Disproportionate use of the AT modifier. Is the active phase of the care you provide significantly longer than other chiropractors?

3. Subluxation diagnosis code and neuromusculoskeletal diagnosis code mismatch. Medicare uses the diagnosis code to determine whether to expect a short-term, moderate-term or long-term treatment plan. 

4. Repeated or excessive use of the 98942 procedure code.

5. A higher-than-normal number of visits that suggest over utilization or lack of medical necessity.

6. Failure to recognize, evaluate or document that the patient has reached maximum medical improvement.

7. The long-term use of passive therapies without being able to demonstrate any significant impact on the patient’s functional improvement.

8. Inappropriate or unwarranted use of Level 4 and 5 Evaluation and Management codes that are not medically necessary based on the patient’s admitting complaint.

9. Using the 97140 billing code with an adjustment code on the same day the service was provided.

10. Routinely offering discounts, free services or financial inducements to begin care.

Worst Case Scenarios of a Post Payment Audit

There is no need to be paranoid, especially if you are systematically documenting what you’re doing, able to prove medical necessity and can objectively substantiate that your care is making a difference in the patient’s condition.

Unlike a traditional lawsuit in which you are considered innocent until proven guilty, here, the burden of proof rests on your shoulders to exonerate yourself and justify your payments!

Like health, an ounce of prevention is worth a pound of cure. Order the patient paperwork system now. Pricing information. Join our mailing list.

Questions not answered here.