Jill M. Young, CPC, CEDC, CIMC

Notice of Insurance Audit - Now What?

by Jill M. Young, CPC, CEDC, CIMC

May 3, 2024

Your office manager just received notice of an insurance audit. Now what? Notification of a request for an audit, or a seemingly innocent request for records from a payer, is always a surprise that can be unsettling. Your response, and how your staff handles this situation, is as important as the records you provide. Payers have a right to request records from you based on services you billed to them. The following are a few thoughts for your consideration as you plan a response:  

The request should be fulfilled by a member of your staff who is familiar with HIPPA policies and with what types of information should be included with requested records. 

  • You should always send the requested records in a timely fashion. Any delay in complying with the request should be addressed to the payer immediately in writing.  
  • Do not send records that are not created by your practice such as operative reports or hospital records.  
  • Only send medication sheets, history forms and any paperwork generated by your practice.
  • Only send records for the dates of service requested. A HIPPA compliant request should include a date range and specify the care (diagnosis) of the patient they are looking for–or they may say all.
  • Maintain a log of what was provided to the payer.  
  • Include a copy of the request in the patient’s file.
  • A file of requests for records should be kept in a master file with copies of all requests from payers.

It is important to note that sometimes payers will contact an employee directly.  It may be a call to a coder or biller or even a non-physician practitioner in the practice. In this instance, I recommend that extreme caution be used. Generally, if a payer contacts someone directly from your office, the investigator or auditor has a path they are following toward a goal they have already identified. There is often something they have already flagged as a problem and are working to confirm.    

As you formulate your response plan, consider what the request is for and have all your resources at hand. You may want to have legal counsel present and someone from your billing staff, or an outside coding and billing consultant. In an interview with an investigator/auditor, discussions of contract conditions and other technicalities may occur.  Having someone with legal expertise sitting beside you to field those questions puts you in the best position to represent your practice. A coding and billing staff member or consultant can be helpful in correctly understanding the technical world of billing for services like office visits, telehealth visits, and hospital inpatient and observation codes. All these areas have seen significant changes over the last few years with nuances that are best understood by the experts who can best represent you.

With all due respect to those who work for payers, the rules of coding and billing are increasingly complex. In the past 5 years there has been a significant number of top auditors, investigators, and consultants who have retired, creating a “brain drain” in this highly specialized area. An in-depth understanding of what your practice is or should be doing with its coding and billing will allow you to go into any audit prepared to defend the work of your providers and employees. A consultant should understand the guideline differences to allow your practice’s work to be appropriately reviewed. A consultant can help increase the likelihood that the correct rules, policies, and guidelines are followed.  As we have seen significant changes in Evaluation and Management services both in 2021 and in 2023, validating the date of service under review is critical to determine which set of rules should be applied.  

If that letter or call comes from a payer, take a deep breath and do not panic. Tell your staff to do the same and think through the process. Look at what has been presented to you. You can call and ask questions if needed for clarification. If a meeting is requested, think through the tips and comments above and decide your course of action as far as how and who will take the lead in the response. Take the OMG (Oh My Goodness) response and turn it into an Our Management’s Got this. 

Stay True to Why You Pursued Medicine.