surgical business and lead to bankruptcy, but also lead to criminal
charges.
Under suspicion
Fraud and overbilling are serious concerns for CMS and carriers (see
"Hospital Improperly Unbundled Orthopedic Surgery Claims"). If
they've targeted you for an audit, the payer will calculate the "error rate"
based on medical necessity of the sample size you provided and will
extrapolate that rate over the months or years of payments. Don't
believe that past payments are endorsements of proper billing or docu-
mentation. Nor should you believe that a change in billing practice will
be sufficient going forward. Once a center is audited, the payer is going
to want its money back for work that your center had performed
months or years ago. You could even find yourself working just to repay
the debt (that you dispute) while you're waiting for your day in court.
Both insurers and CMS will use computers for any indication that
your center is a billing outlier. They know what a facility like yours
should bill, which codes are typically used and have reams of data
from across the industry to guide their investigation. If they see some-
thing about your billing practices that differs from the statistical norm,
it is likely that your center could face an audit.
When they ask for those sample records, contact your attorney immedi-
ately. You should also contact your carrier, which might cover legal fees
in defending these cases. The earlier you take action, the better.
In my experience, single providers are often hit with an overpayment
demand well into the 6 figures. In the case of a surgical center, it
ranges into the millions. These cases are typically very difficult to
defend and usually will take years to resolve. They can be a black
cloud that hangs over your facility.
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