3 Myths About Medicare Audits

Ralph Wuebker, MD, chief medical officer for Executive Health Resources, shared three myths on Medicare audits during a presentation at the Healthcare Financial Management Association's Annual National Institute in Las Vegas earlier this week.

Myth #1: There's no audits right now. In January, the Office of Medicare Hearings and Appeals suspended the assignment of audit appeal requests to administrative law judges for two years due to a backlog of appeals. As of January, the wait time from appeal to hearing was 16 months, according to a RACMonitor report.

The suspension of appeals does not mean that audits themselves have been suspended. "That's absolutely not correct," said Dr. Wuebker.

Myth #2: Medical necessity doesn't matter. Adherence to CMS' two-midnight rule has been the basis for many audits, and many believe that compliance for the rule is primarily concerned with time — that is, if the patient stayed for two midnights, there is no risk of audit. However, Dr. Weubker warned that medical necessity is also critical, and CMS isn't going to approve inpatient status that isn't medically necessary, even if it spanned two midnights. "That can't be the spirit of the law," he said.

Myth #3: All denials should be appealed. Because such a backlog of appeals exists, hospitals must calculate the "time value of money" for different types of appeals, based on the type of case, he added. For example, is $5,000 reimbursement today (assuming the case is rebilled and not appealed) more or less valuable than $10,000 two years down the road?

According to Dr. Weubker, hospitals should closely examine any high-risk claims, including 0-1 night inpatient cases and 2+ midnight observations to ensure proper documentation. Additionally, he recommended hospitals bring in additional resources to help appeal claims, rather than relying solely on attending physicians, who would prefer to spend their time on direct patient care.

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