Medicare Increases Compliance Audits

Medicare Increases Compliance Audits

Recently, many ICS members have begun to receive notices from CMS stating that one area of focus identified through data analysis for 2007, is the accurate billing of Chiropractic Services with the AT modifier. CMS is encouraging providers to conduct “self-evaluation and correction” to determine if coding errors occurred, and to make voluntary refunds, if needed. ICS members are encouraged to pay close attention and understand the ramifications of this notice.

In October 2000, the Office of Inspector General (OIG) released the final guidelines for the Compliance Program for Individual and Small Group Physician Practices. The OIG believes healthcare providers should voluntarily develop policies and procedures to prevent the reporting of erroneous claims or any conduct or behavior that is considered unlawful or non-complaint with the laws, statutes and regulations applicable to the delivery of healthcare services.

The Department of Health and Human Services (HHS) reported $1.9 billion recovered from 1996 through 1999. Recoveries from fines, settlements and judgments totaled $1.2 billion in 2000, $1.7 billion in 2001, and $1.8 billion in 2002. The largest settlement reached thus far with a single provider was for $920 million in 2006. As of December 2006, 1,904 chiropractors were excluded from the Medicare program.

As of October 1, 2004, CMS required the use of the AT modifier if active/corrective treatment is being rendered. The AT modifier coveys a message to CMS that the provider attests the care rendered for that date of service is under an active therapeutic program and is medically necessary. The AT modifier must not be placed on the claim when maintenance therapy has been provided. Claims without the AT modifier will be considered as maintenance therapy and denied. Medically necessary care, as it pertains to standard Medicare, is described as care for an acute or chronic subluxation. Medicare pays for medically necessary care. It does not pay for maintenance care, defined as “A treatment plan that seeks to prevent disease, promote health and prolong and enhance the quality of life or therapy that is performed to maintain or prevent deterioration of a chronic condition.” Once the maximum therapeutic benefit has been achieved for a given condition, ongoing maintenance therapy is not considered to be medically necessary under the Medicare program.

If the doctor uses the AT modifier when he/she should have known that the care is maintenance, then the doctor may be guilty of fraud. If found guilty of fraud, the doctor may be assessed civil money penalties of $10,000 per item and three times the amount claimed, as well as exclusion from Medicare.

Every year, the OIG releases its “Work Plan.” In the work plan, the OIG gives notice to other entities of issues it considers “risk areas.” These areas will be the emphasis of study, review, investigation, and audit. In the OIG 2007 Work Plan, nearly 50% of the risk areas identified, directly or indirectly affect chiropractic services. Every provider should be aware of these risk areas to direct audits in their compliance program. The Work Plan can be accessed at

Although voluntary, a formal written compliance program with all Federal and state laws, guidelines and statutes is strongly advised. The OIG states, “Compliance programs strengthen the efforts of Government and the private sector to prevent and reduce improper conduct. These programs can also further the mission of all physician practices to provide quality care to their patients.” Consultation with a healthcare attorney or a Certified Medical Compliance Specialist (MCS-P) is recommended. Members may contact the ICS or me for further information.

A comprehensive program as suggested by the OIG must include: (1) Implementing written policies, (2) The designation of a compliance officer or contact, (3) Conduct comprehensive training and education for all staff including the doctors, (4) Developing lines of communication, (5) Enforcing standards through publicized disciplinary guidelines, and (7) Responding to detected offenses and undertake corrective actions.

If a comprehensive written compliance program is implemented, the reduction of errors should occur. If errors are uncovered in an audit, the doctor would have demonstrated that no knowingly and intentional errors were committed. Therefore, the OIG typically will demand a refund of amounts reimbursed in error, but typically no fines or jail time is imposed. Physicians are not subject to civil or criminal penalties for innocent errors.

If you discover an overpayment, take immediate action. Failing to disclose overpayments within 90 days of discovery can result in the government alleging a knowing and willful attempt at concealing overpayment. Complete the Overpayment Refund form each time a voluntary refund check is sent to assure that the monies are credited timely and accurately. Be sure to complete the entire form.

Include the voluntary refund form with every refund. Be sure that you are returning the correct amount. Refer to the paid amount rather than the allowed amount when determining the overpayment. When you voluntarily participate in an OIG Self-Disclosure Protocol agreement, no appeal rights will be granted.

Federal guidelines to be considered in your comprehensive compliance policies should include, but are not limited to, Coding, Billing and Reimbursement Guidelines, E/M Guidelines, HIPAA, OSHA, CLIA, NCQA, Anti-Kickback Statute, Stark I and Stark II, False Claims Act, ERISA, Americans with Disabilities Act and the Family Leave Act. The list and the task can be overwhelming without the help of a specialist. However, the ramifications are exponentially larger if you are found guilty of infractions.

The Illinois Chiropractic Society continues to work diligently to bring information to the members of the ICS. Look for upcoming Medicare, OIG Compliance and Documentation classes sponsored by the ICS. In addition to classes, articles and ICS web site postings, the ICS now offers training CDs and DVDs for subjects such as HIPAA, Medicare, PI/Work Comp and Documentation. All CDs and DVDs are eligible for Category One CME.

About Author

Mario Fucinari DC, CCSP, APMP, MCS-P, CPCO

Dr. Mario Fucinari has helped train doctors and staff over the last 20 years. He received his bachelor's degree from Wayne State University in Detroit and his Doctor of Chiropractic degree from Palmer College of Chiropractic in 1986. Dr. Fucinari was the recipient of the 1998 and the 2003 President's Award from the Illinois Chiropractic Society (ICS) for his work with education and training and most recently received the 2012 Chiropractor of the Year award from the ICS.

Dr. Fucinari was the first chiropractic physician to attain the Certified Medical Compliance degree. Two years later he earned his degree as a Certified Instructor for the Certified Medical Compliance Program. He is now the Chairman of the Chiropractic division of the national medical compliance program. He has produced classes and publications on HIPAA, Clinical Documentation, Medicare, and Stroke and Cervical Manipulation. He is a worldwide speaker for NCMIC, Foot Levelers, ChiroHealthUSA and several state associations and a Certified Chiropractic Sports Physician [CCSP].


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