Practice Management Alert

Come clean quickly to keep your internal audit results from sparking an outside investigation

When you find evidence of over-coding after you've been paid, you need to disclose this information to the appropriate carriers in a way that proves you are honest and had no fraudulent intent.
 
Danger: The jeopardy you face is that the carrier may not believe you, says Elliot Oppenheim, MD, JD, LLM Health Law, CEO and president of coMEDco Inc. in Santa Fe, N.M. And if a carrier suspects that your coding problem was more widespread than you say, it could decide to do a more extensive audit and investigation to try to discover more overpayments, he adds.
 
Solution: "Candor, honesty and being forthright win the day no matter where the chips fall," Oppenheim says.

The worst thing that can happen is the carrier telling you to pay the money you owe them, because as long as you are honest you'll make it clear there was never any criminal intent to defraud.

Proof of No Intent Is Paramount

Carriers draw the line for fraud and abuse charges where they see evidence of intent to benefit by incorrect coding and billing. So in all of your communications to carriers during a disclosure, you want to show that your errors were due to ignorance or poor data quality - "not an issue of intent," says Curt Udell, CPAR, CPC, CMPA, senior advisor with Health Care Advisors Inc. in Annandale, Va. If you create a good impression with your honesty, carriers are more likely to accept what you say without dispute. 
 
Also: You must articulate clearly to carriers why the coding errors happened in the first place, and outline step by step what you've done to correct the problems and prevent them from happening again, Udell says.

For example, you might explain how you'll perform ongoing monitoring of the problem area, and how you'll check this issue during your semi-annual reviews, he says.

Remember 3 Expert Disclosure Tips

1. Determine the severity of your coding problem before charting your disclosure course. Look at the frequency and revenue volume for the codes in question to decide whether the problem was isolated to a few random mistakes or whether it represents a larger compliance risk for your practice, Udell says. 
 
You must disclose any audit-revealed coding errors, no matter how small, but you should definitely recruit an attorney's help for medium- and large-scale errors.

2. Secure attorney-client privilege. If you decide you need an attorney to ensure the most legal protection during your disclosure, make sure you obtain attorney-client privilege (a standard agreement that guarantees you legal privacy in discussing coding errors with your attorney), Udell says. 
 
The attorney will then help you coordinate a more extensive investigation with an outside auditor, and draft your carrier communications so you have clearly articulated the absence of fraudulent intent and your efforts to prevent problems in the future, he adds.
 
Check out the OIG: The Web site of the HHS Office of the Inspector General (OIG) offers a voluntary disclosure form and guidance on how to properly estimate an overpayment, Udell says. This may help you organize your disclosure effort.

3. Don't offer up your audit. You can adequately describe the details of your audit findings and how you calculated your total overpayment without providing all your data, Udell says. Provide that basic information and then find out what the carrier needs to process the overpayment and disclosure - otherwise a carrier may start nitpicking at your audit numbers just because it can.

Avoid an accounting nightmare: Be proactive about offering to refund the overpayment promptly, Udell says. If you aren't, the carrier may decide to detract money from current payments as a means of obtaining the overpayment amount - and this can cause massive account adjustments and confusion.