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Tip of the Week for Physicians facing RAC or Medical Audits: Recovery Audit Contractor (RAC) and Private Payer Audits: Ten Things Physicians Can Do to Protect Their Medical Practices


     The pressure on both governmental and private payers to reduce the cost of healthcare and the often mistaken, but real, public perception of rampant Medicare and Medicaid fraud have caused both public and private payers to increase audits of all medical providers, including physicians.  For example, the Recovery Audit Contractors (“RAC”) audit program was implemented by Congress to identify and collect Medicare overpayments and was subsequently expanded to encompass Medicaid audits.  Private payers similarly use audits to attempt to identify and collect alleged overpayments. 

     Although these audits can be burdensome to a physician practice and may sometimes result in large demands for repayment, there are several things that physicians can do to protect themselves from adverse outcomes from medical audits.  Therefore, Whatley Kallas, LLP has compiled a “top ten” list of tips for physicians practices facing RAC or medical audits.  We will be highlighting one tip a week for ten weeks beginning August 16, 2013.  Click here for a link to the entire top ten list..


RAC contractors and private payers use software programs to compare physicians with others in their specialty to identify physicians who may be over-utilizing certain CPT® codes, such as the more intensive level Evaluation and Management codes (CPT 99214 and 99215).  Physicians should use one of the readily available commercial products or information available on CMS’ website ( to determine if their billing is out of line with others in their specialty, thereby putting them at risk of an audit.  Physicians should also review Medicare’s Comprehensive Error Rate Testing (CERT) report to determine if they are billing codes commonly found to have been improperly paid by Medicare and ensure that they are properly using and documenting these codes.  Physicians who do not conduct such an analysis are doing themselves a grave disservice.  Not only are such reviews a standard component of an effective fraud and abuse compliance program, but they also serve to show physicians how they are being viewed by payers.  The results of a benchmarking analysis can therefore provide physicians with information critical to tailoring a defense to an audit or a repayment demand.  Of particular importance, physicians should understand the proper benchmark for their practice – the more sub-specialized the practice, the more aberrant the physician’s coding may appear when compared with other physicians, even within his or her specialty.  For example, a trauma surgeon’s billing and coding will vary dramatically from that of a general surgeon, but a payer’s audit software may compare all surgeons regardless of sub-specialty.  Physicians armed with such knowledge before an audit or demand for repayment are better equipped to effectively respond when faced with an audit.