Each year, the Office of Inspector General (OIG) releases its annual Work Plan for the fiscal year, which details new and ongoing reviews that will be conducted in federal programs such as Medicare.
Since I am apparently sadistic enough to be a certified professional medical auditor, one question chiropractors love to ask me is, "How can I fly under the insurance radar?" Unfortunately, my candid response typically disappoints: You cannot avoid the radar. What you can do is ensure you are in strict compliance so as to avoid raising red flags. That process starts by understanding the chiropractic-relevant audit targets designated by OIG for 2012.
The Audit Question You Should Be Asking
With all of the tools available to insurance payers, like it or not, they pretty much know your every move. With the push of a button, they can extract data on your billing patterns and determine how much care you render, how much you've been paid, how often you bill a certain code and many other details about your practice. Another click on the mouse and they can compare you to your chiropractic peers in their network, in your state or to the profession at large.
Basically, if you seek any payment from a third-party payer, the probability of flying completely "under the radar" is pretty slim. Therefore, what most chiropractors should ask is this: "What services, procedures or patterns would cause me to become an audit target? The difference is that while the "radar" can spot or track any or all movements, audits are triggered when those patterns are unusual compared to the norm. So, if you want to steer clear of audits, strategy number-one is to act like everyone else and don't do anything too dramatically different that would cause you to be labeled an outlier – because outliers get audited.
Guilty by Association?
While this answer may satisfy and protect some chiropractors, unfortunately another problem has emerged: What happens when you become an audit target based on your profession or your procedures? The bad news is you can't do much about the profession you are in except encourage your fellow colleagues to improve their game. Certainly, this is much-needed in chiropractic. Sadly, as things stand in 2012, we are an audit target and most of us may be guilty by association.
Unlike your investment portfolio disclosures, apparently the auditors feel that our past performance guarantees future results. They are banking on the fact that previous OIG reports, comparative billing reports and other data mining tools have revealed that we commit a great deal of errors when it comes to billing, coding and documenting our services.
While global change for that may come in time, chiropractors also need to be acutely aware of audit targets based on certain procedures. In other words, things you may do in your office that – whether you perform, bill, code or document them correctly or not – will increase the likelihood that you are audited. For these items, we need to take extra caution to make sure we are in complete compliance because essentially, the flag has already been raised.
The "Official" Audit List – the OIG Work Plan
This brings us back to the OIG Work Plan for Fiscal Year 2012 and a little bit of good news. In its work plan, the OIG spells out what areas it will be investigating. So, if one of these applies to you, make sure you are doing things right, because the auditors are likely to be coming your way.
Fortunately, not everything on the OIG target list applies to chiropractors. Some targets are new (and labeled as such), while others are ongoing areas the OIG will continue to monitor. Unfortunately, while this is the "official" audit target list from OIG for federal entities such as Medicare, private payers have access to the list as well, so their audit procedures may also be based on these same targets. The applicable items are summarized as follows so you can be better prepared and reduce your audit risk:
- Chiropractors: Part B Payments for Services (New): The OIG plans to review Medicare Part B payments for chiropractic services to determine whether such payments were in accordance with Medicare requirements. Prior OIG work identified inappropriate payments for chiropractic services furnished during CY 2006. Medicare chiropractors' services include only treatment by means of manual manipulation of the spine. (42 CFR § 440.60) Chiropractic maintenance therapy is not considered to be medically reasonable or necessary and is therefore not payable. (CMS Medicare Benefit Policy Manual, Pub. 100-02, ch. 15, § 30.5B)
- Physicians and Other Suppliers: High Cumulative Part B Payments (New): The OIG will review payment systems controls that identify high cumulative Medicare Part B payments to physicians and suppliers. The OIG will determine whether payment system controls are in place to identify such payments and assess the effectiveness of those controls. Medicare Part B services must be reasonable and necessary [Social Security Act, § 1862(a)(1)(A)], adequately documented [§ 1833(e)] and provided consistent with federal regulations (42 CFR, § 410). A high cumulative payment is an unusually high payment made to an individual physician or supplier, or on behalf of an individual beneficiary, over a specified period. Prior OIG work has shown that unusually high Medicare payments may indicate incorrect billing or fraud and abuse.
- Compliance With Assignment Rules: If you accept assignment with Medicare (i.e., you accept what Medicare allows as payment for a service), the OIG wants to know if you are adhering to the allowable and not collecting more than the patient's deductible and co-insurance.
- Evaluation and Management Services: Trends in Coding of Claims: When performing exams or billing E/M codes, do you simply pick a code and hope your documentation was up to the task, or do you review your documentation and choose the code that reflects what was there? The OIG (like every payer) wants to know and has identified this as an audit target.
- Medicare Enrollment and Monitoring for Suppliers of Durable Medical Equipment, Prosthetics, Orthotics and Supplies: While relatively few chiropractors have gone through the process of becoming a DME supplier for Medicare, DME billing is under scrutiny. Any chiropractor who bills DME to Medicare may be considered guilty by association (DME billing has come under intense scrutiny lately) and subject to audits. The OIG will review Medicare contractors' processes for enrolling and monitoring suppliers of durable medical equipment, prosthetics, orthotics and supplies (DMEPOS) to identify applicants who pose fraud risks to Medicare, and the extent to which applicants omitted ownership information on enrollment applications.
Medicare Supplier Acquisition Costs for Back Orthoses: The OIG will compare supplier acquisition costs to the Medicare reimbursement amount for the back orthosis procedure code L0631. Medicare beneficiaries receive their L0631 back orthoses from suppliers that bill Medicare for reimbursement. Back orthoses are covered by Social Security Act § 1832(a)(2), and are supplied by Medicare DMEPOS suppliers who purchase back orthoses from wholesalers or directly from orthotics manufacturers. For 2011, the median Medicare reimbursement amount for a L0631 back brace was $929. OIG has encountered suppliers who can purchase these back orthoses for prices significantly lower than Medicare reimbursement rates. Internet retail prices for this type of orthoses are also significantly lower.
Frequency of Replacement of Supplies for Durable Medical Equipment: The OIG will review the compliance of suppliers of DMEPOS with Medicare requirements for frequently replaced DME supplies to determine whether payments for such supplies met Medicare requirements. Preliminary OIG work showed that suppliers automatically shipped DME supplies when no physician order for refills was in effect. Certainly this consistency results in increased revenues, but payers don't like paying for things that aren't necessary. The OIG will select a sample of claims for frequently replaced supplies. For DME supplies and accessories used on a periodic basis, the order or Certificate of Medical Necessity must specify the type of supplies needed and the frequency with which they must be replaced, used or consumed. (CMS Medicare Program Integrity Manual, Pub. 100-08, ch. 5, §§ 2.3 and 5.9.)
Knowledge Is Power
This is obviously not an exhaustive list of every possible audit target aimed at DCs, but a list of the OIG Work Plan targets for 2012 that may be applicable to chiropractors. Other procedures we may utilize could also cause "red flags" because of our frequency of use, but because they are not reimbursed in Medicare, they don't make the above list. Chiropractors, please take this seriously; take precautions to protect yourself.
It is said that learning in the "school of hard knocks" is effective and long-lasting. Unfortunately, it's also quite painful and not generally profitable. I hope you take strides to learn from these resources and our own profession's past mistakes so you can continue taking care of your patients and getting paid for the good work you do.
To learn even more about reducing your audit exposure, e-mail
, noting that you read this article, and I will be happy to provide you with a list and brief explanation of seven additional audit targets that are not on the OIG work plan, but that every chiropractor should know.
Dr. Tom Necela maintains a private practice in Washington state. He is also the founder of The Strategic Chiropractor, a consulting firm for chiropractors. Dr. Necela can be contacted with questions or comments via his Web site, www.strategicdc.com.