Audit Insurance: Cost-Effective Protection or Expensive Luxury?
When I started out in practice, the biggest risk I faced was a potential malpractice suit. Now 32 years later, the biggest threat to my practice is an audit. Often, audits are triggered by patients who are not unhappy with your clinical care, but your billing or collection practices. Recoupment is BIG business. Don’t believe me?
Just look at the results.
• In the fiscal year 2016, the DOJ obtained $2.5 billion in settlements and judgments from civil cases involving fraud and false claims against the government in the healthcare industry.
• Between 2009 and 2016, the DOJ obtained $19.3 billion in civil settlements and judgments for healthcare fraud.
• In 2014 alone, the Medicare Fraud Strike Force (made up of the DOJ, the FBI, HHS’s Office of Inspector General and individual United States Attorneys’ Offices) brought criminal charges against 353 individuals.
• Of the 248 individual defendants sentenced in 2014 for healthcare fraud, the average prison sentence was more than four years.
Thanks to modern technology, the Office of Inspector General (OIG) can use data analysis, predictive analytics, and modeling approaches to better analyze and target healthcare fraud and abuse. These algorithms search for known fraud patterns to calculate ratios of allowed services compared to national averages. Insurance companies use the same technology in their fraud protection systems. They continually mine data to identify emerging fraudulent patterns and create new “rules” for those as well. The “intelligence” in the system learns from these new rules and continually becomes more sophisticated in identifying even more fraud potential. The best models not only flag the potential but provide the reasons for the flag. This makes investigations and assessments by management more efficient.
It’s no secret that audits are on the rise. In a recent conversation with a friend and consultant, Dr. Tom Necela, I wanted to know what this increase in audits was costing chiropractors across the country. Since 2012, he has worked on over 347 audit cases. 67% of those audits were from commercial insurance payers, 24% from Medicare, and 9% from state boards. Dr. Necela stated, “As far as fines or recoupment goes, we explain to our clients that a total victory is unlikely (<5%). It’s very rare that an insurance payer lets the doc walk away unscathed.”
Medical Billing Errors and Omissions Liability Insurance
These numbers are higher than most doctors can fund out of their savings. So, much like any other risk we face, if there is a way to “insure” against this type of loss, it makes sense to do so. In a recent article I read, the average cost of an investigation, possible recoupment, and legal defense can easily exceed $200,000. That’s far greater than the average malpractice policy covers. Thanks to Medical Billing Errors and Omissions Liability Insurance (Audit Insurance), we now have a way to protect our practices.
These audit insurance policies can pay for the defense costs, civil fines, and penalties, arising from allegations of improper billing, HIPAA, EMTALA, and STARK violations. It is important to check that any coverage you purchase includes both governmental and commercial payers, qui tam plaintiffs, and voluntary self-disclosure. It is not a bad idea to ask your carrier if additional coverage for legal expenses for disciplinary proceedings by a state licensing board can also be added. If you’re not sure where to get this type of coverage, reaching out to your malpractice carrier is a great place to start.
With today’s unending flow of information, we can’t go a day without seeing headlines, posts, and tweets about providers across the healthcare profession being audited, fined, and some even convicted. We tell ourselves, “It won’t happen to me.” The reality is that it easily could. Your license is your livelihood. Your families, employees, and patients are depending on you. Call your malpractice carrier today – and practice with peace of mind, knowing that you have taken the steps to protect your practice in the event of an audit by obtaining audit insurance.
About the Author
Dr. Ray Foxworth is a certified Medical Compliance Specialist and President of ChiroHealthUSA. A practicing Chiropractor, he remains “in the trenches” facing challenges with billing, coding, documentation, and compliance. He has served as president of the Mississippi Chiropractic Association, former Staff Chiropractor at the G.V. Sonny Montgomery VA Medical Center and is a Fellow of the International College of Chiropractic. You can contact Dr. Foxworth at 1-888-719-9990, firstname.lastname@example.org or visit the ChiroHealthUSA website at www.chirohealthusa.com. Join us for a free webinar that will give you all the details about how a DMPO can help you practice with more peace of mind. Go to www.chirohealthusa.com to register today.