Who cares about Post Payment Audits?

A non-compliant practice owner risks license, significant monetary penalties, and imprisonment.
The institutional risks of noncompliance have grown since 1995 from relatively non-adversarial audits and occasional return of payments to formal investigations, prosecution under the False Claims Act, and whistleblower action.
No business insurance offers coverage against post payment audit risk

Growing frequency of audits
Growing severity of penalties. The personal risks of noncompliance have changed from money return to exclusion from government programs and loss of practice license. Administrators can be barred from working in the healthcare industry and clinicians, managers, corporate directors, even outside consultants can be jailed for healthcare fraud and abuse.
If you fight, you might reduce the damages by 50%-75%
If you do not fight, in addition to paying all damages, you also go on record for easy mark, provoking a repeat audit later.

What are Post Payment Audits?

Post Payment audits are about Money:

A tactic utilized by government and private insurance carriers to extract money previously paid to doctors
A comprehensive investigation of claims previously paid by a carrier to find an overpayment or fraud

Anybody that received payments from payers, regardless of in-network or out-of-network.

Selection is based on

The insurer reviews a limited sample (e.g., 20) of patient files and determines % of deficient files within the sample (e.g., 25%)
The deficiency percentage is applied too of the reimbursement paid by the insurer in the past 6 years (e.g., 25% deficiency x $1,000,000 receipts for 6 years = $250,000)

In the State of New Jersey (N.J.S.A. 2C:21-4.2): "...making or causing to be made a false, fictitious, fraudlent, or misleading statement of material fact in, or omitting a material fact from, or causing a material fact to be omitted from, any record, bill, claim or other document, in writing, electronically, or in any other form, that a person attempts to submit, submits, causes to be submitted for payment, or reimbursement for health care services."
On the federal level (18 U.S.C. # 1347: "Whoever knowingly and willfully executes, or attempts to execute, a scheme or artifice to-

Defraud any health care benefit program
Obtain, by means of false or fraudulent pretenses, representations, or promises, any of the money or property owned by, or under the custody or control of, any health care benefit program, in connection with the delivery of or payment for health care benefits, items, or services,..."

Ghost billing (i.e., billing for service that was not rendered)
Intentional unbundling of services
Billing for a pattern of medically unnecessary services
Upcoding
Cluster billing
Falsifying patient records
Routine waiver of copayments and deductibles
Improper delegation of services
Illegal practice structure
Billing for treatment rendered to family members and/or employees as a condition of continued coverage

In-network: you have a contractual duty to cooperate.
Out-of-network: no contract to govern the audit, but risk of carrier offsetting or blocking other claims

Check your participating provider agreement for a limited look back audit periods
Otherwise, the statute of limtations for a contract claims is 6 years
Legislation is pending to limit look back period down to 18 months.

Claim Offset: Offset future reimbursements on a particular patient until past overpayment on that patient is paid in full.
Claim Block: Offset future reimbursements on all patients until past overpayment is paid in full.

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