Insurance Audits - Reality
- One of the costliest
issues facing all medical practices is an insurance audit.
Insurance auditors tell us more than 90% of practices will fail an audit!
Typical penalties are between $150,000 to $225,000!
Many are much higher.
Practices are completely unprepared for an insurance audit.
Most EHR systems are not compliant. The auditors know this and use
this in their audit.
What are My Risks in an Insurance Audit?
payers have significantly increased their auditors and audits.
- Your chances of being audited constantly increase!
What is the Insurance Audit Process
- Once a practice is selected and prior to the audit, auditors review
your previously submitted claims looking for issues.
- They select a set of patients
based on those claims they think will
- This is never a random selection. The auditors want to make sure
the records selected will result in denials.
We refer to this as "Cherry Picking"
- Because they pre-select, this typically results in a failure rate over
In all the audits we have been asked to appeal, we have
never seen less than 90% failure of records reviewed!
We heard from auditors confirming the failure rate
because of the
- Auditors apply the high failure rate to all
reimbursement paid to your over multiple years.
This is referred to as "Extrapolation". Interest and penalties are
This is an actual
audit finding showing penalty calculation. Extrapolation:
% of Records Failed 91%
Total Reimbursement 2010 –
2015 $127,569 (Only $17,000 was identified. Rest is Extrapolation.)
Failed % of Total
Total Due by
What do the auditors
One of the easiest things for auditors to find is the recording of Chief Complaint,
Patient History, Medications and ROS
Most technicians simply pull
forward from previous.
There are specific rules for information pulled forward. Most
technicians are not familiar with these rules.
This results in auditors classifying the records as "Cloning" and
- Most EHR systems exam verification
is not correct. Auditors
typically find these "verified" exams non-compliant
Practices that failed an
Unfortunately, we actually spend more time helping practices
that failed an insurance audit!
This is only a few of the cases of failed audits we are currently or
previously worked on appeals.
Practice Size Penalty
Two doctor $1,500,000
One doctor $650,000
Two doctor $1,090,000
One doctor $195,000
One doctor $270,000
One doctor $210,000
One doctor $75,000
One doctor $156,000
One doctor $220,000
One doctor $195,000
Every week we
hear from multiple practices that asked for help because they failed an
You need to protect your practice!