Wiki Audit - Insurance Payments

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MichelleBursavich

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My provider has a question that I do not have the answer to. Any input is appreciated.

"In the event of an audit and the auditor finds (for example) 5 charts that are over-coded but then finds 3 charts that were under-coded, will the insurance payments balance out?" - to explain in more detail, if 33% of the claims were overpaid due to over-coding but then 25% of the claims were essentially underpaid as they were under-coded, will the insurance company only recoup (penalize) for 8% of the overpaid claims? -- hoping this is making sense -- OR, does the insurance company only penalize and recoup claim payments for all overpaid claims that are found to be over-coded without regards to under-coded claims?

Does anyone know how this works?
 
Often times it depends on your contract, etc. But in general when a carrier does an audit and finds errors for both undercoded and overcoded services they will typically take the following steps:

1. They will request a recoupment or refund of the overpaid amounts. Often times they will request corrected claims as well
2. On the claims that were undercoded they will at times allow for a corrected claim to be submitted for additional payment. This will depend on timeframes and contract specifications.

Your best step will be to review these options with the auditing team in regards to appropriate follow up.
 
It will really depend on the payer and the audit they're conducting - I've seen it both ways. In some cases, the payer or their audit company may only be looking for overpayments and if they happen to find underpaid claims, they'll consider it the provider's responsibility to pursue those funds. On the other hand, I've also seen payers - Medicare in particular - that will adjust the claim to pay a higher amount based on the audit results. One thing that's in common those is that payers won't 'pool' payments from different claims - for accounting purposes, funds have to be kept separate, in other words, fund from one source can't be used to offset claims that are funded from another source, so each overpaid or underpaid claim has to be paid on its own standing.
 
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