Medicaid & Medicare Audits for Dentists

Like all health care providers and medical facilities that bill Medicaid and Medicare for reimbursement, dentists and dental practices are subject to constant scrutiny. Federal authorities including the U.S. Department of Justice (DOJ) and the Centers for Medicare and Medicaid Services (CMS) routinely investigate dentists suspected of overbilling these government programs, and private contractors working with CMS audit dental practices’ billing records on a regular basis.

However, while Medicaid and Medicare audits may be the new norm, dentists and practice managers cannot afford to take these audits lightly. CMS’s audit contractors, the Office of the Medicaid Inspector General (OMIG), and certain other authorities have been endowed with broad authority to dig deep into dental practices’ billing records, and they can impose significant financial penalties when an audit reveals improper billings. In addition to facing recoupments and denial of outstanding claims, dentists can also face prepayment review of future Medicaid and Medicare reimbursements. This can delay payments by as much as six months (assuming reimbursement requests are not prospectively denied), which can have obvious detrimental consequences for practices that rely on federal program funds for their financial well being.

Dental Practice Auditors: CMS’s “Fee-For-Service” Contractors and Government Authorities

If your dental practice is being audited, it will be important for you to learn as much as you can about the audit process as quickly as possible. This starts with understanding (i) who the auditors are, and (ii) what you can expect once your audit begins.

Medicare audits are performed by private government contractors. These contractors operate under CMS’s “fee-for-service” program, which means that their compensation is tied to the amounts they recover on CMS’s behalf. As a result, while the overarching goal of the fee-for-service program is to ensure accuracy and transparency in the Medicare billing system, audit contractors heavily emphasize uncovering overbillings, and only a very small percentage of audits result in dentists and other providers receiving additional compensation for under-billed services and supplies.

While CMS’s fee-for-service program involves several different types of audit contractors, those that are primarily responsible for auditing dental practices for Medicare compliance include:

• Medicare Administrative Contractors (MACs)
• Recovery Audit Contractors (RACs)
• Zone Integrity Program Contractors (ZPICs)

On the Medicaid side, audits are typically conducted by ZPIC and the OMIG. Various state-level authorities including Medicaid Fraud Control Units (MFCUs) may be directly or indirectly involved in these audits as well. While all dentists are susceptible to facing Medicaid audits, due to their high volume of Medicaid claims, pediatric dentists are among those at the greatest risk for being targeted by a ZPIC or the OMIG.

Once you discover that your dental practice is being audited, you need to act quickly in order to mitigate the risk of a flawed adverse determination. This means:

• preparing your personnel to respond to auditors’ requests appropriately,
• conducting an internal assessment to identify any potential issues (which you may need to address proactively), and
• engaging legal counsel to intervene and challenge the auditors’ faulty methodologies and conclusions.

Despite the volume and frequency of audits conducted, mistakes are common, and dental practitioners must take control of the audit process in order to avoid unjustified liability and prepayment review.

Conducting an Internal Assessment: Identifying Potential Sources of Exposure

When defending against a Medicaid or Medicare audit, it is important to know what the auditors will find before they find it. This includes not only legitimate billing errors that require correction but apparent issues that may lead to flawed determinations of liability. By anticipating the auditors’ assumptions and mistakes, you can address them tactfully and proactively an approach that is greatly preferable to challenging a flawed determination through the audit appeals process.

In broad terms, Medicaid and Medicare auditors are looking for evidence of billing fraud. This includes intentional and unintentional overbilling resulting from a wide range of factors. As you examine your practice’s billing records, keep an eye out for the types of issues that are likely to raise red flags for auditors.

• Lack of Evidence of Medical Necessity Medicaid and Medicare reimbursements are only available for services and supplies that are deemed medically necessary. While you may know what your patients need, if your documentation practices are lacking, this could be a major issue during the audit process.
• Lack of Service Delivery Another common allegation in dental audits that is surprising to many dentists is the allegation that billed services were not actually provided. Once again, thorough documentation is key, and practitioners, unfortunately, need to be prepared to prove that they served their patients as represented.
• Non-Qualifying Services, Equipment, or Supplies Not all dental services, equipment, and supplies are eligible for Medicaid and Medicare reimbursement. Do your records prove that all billings from the last several years were eligible for Medicaid or Medicare reimbursement?
• Coding and Billing Errors Some of the most common issues with Medicaid and Medicare billings are the result of simple human error. Coding and billing errors, while unintentional, still justify recoupments during the audit process. However, before you rely on a MAC, RAC, or ZPIC to tell you whether you have coded and billed your dental services properly, it is imperative that you have a clear understanding of the rules that were in place at the time your practice billed Medicaid or Medicare.
• Double-Billing Private Insurance and Government Benefit Programs Double-billing is a frequent focus of Medicaid and Medicare audits as well. This includes billing a private insurer and Medicaid or Medicare for the same service, billing both Medicaid and Medicare, and submitting multiple bills to the same government benefit program.
• Illegal Compensation Structures The Anti-Kickback Statute prohibits the use of Medicaid and Medicare funds to provide compensation for referrals. However, the statute and its enabling regulations are extraordinarily complex, and auditors often do not have a clear understanding of the provisions that provide for lawful forms of remuneration.

Additionally, all types of Medicaid and Medicare auditors rely heavily on data analytics to conduct their audits, and certain “anomalies” can trigger claims for recoupments as well. However, dental practices will often have legitimate explanations for having unique billing records. If this becomes an issue during your audit, it will be critical to communicate effectively with the auditors in order to demonstrate that this particular line of inquiry is unwarranted. The types of issues falling into this area often include:

• Having a high average payment amount on a per-patient basis
• Billing an unusually-large quantity of services or supplies on a per-patient basis
• Seeking reimbursement for particular services or supplies at a higher-than-average rate

Defense Strategies: Tips for Avoiding an Unfavorable Audit of Your Dental Practice

Once you know what to expect during your audit, and the types of issues that are likely to come up, you can begin to formulate a defense strategy that is tailored specifically to the unique facts and circumstances at hand. At The Criminal Defense Firm, we represent dentists and dental practices nationwide in Medicaid and Medicare audits, and we have consistently been successful in protecting our clients with a variety of defense strategies.

• Challenging an Auditor’s Assumptions, Methodologies, and Conclusions When facing a Medicaid or Medicare audit, it is important not to substitute the auditor’s judgment for your own. Auditors routinely make mistakes, and you need to be prepared to clear up any misunderstandings and call out the auditor’s errors in order to protect yourself from unwarranted consequences.
• Using the Law to Your Advantage Did the Medicare billing regulations change after you submitted a reimbursement request (such that the request was lawful at the time it was submitted)? Does your compensation structure with a supplier or marketing syndicate qualify for a safe harbor under the Anti-Kickback Statute? These are the types of questions that are likely to come up during your audit, and you need to be prepared to use the law to your advantage.
• Affirmatively Demonstrating Compliance While there are advantages to limiting the information you voluntarily provide to auditors in many circumstances, in some cases, the most efficient way to defend your practice may be to affirmatively demonstrate your compliance. Our attorneys can help you decide what information to disclose as well as when and how to disclose it.
• Preserving Issues for Appeal In some cases, there is simply nothing that dentists and practice managers can do to convince auditors that their determinations are flawed. If it appears that your audit will not be resolved in your favor, there may come a point at which your defense strategy needs to focus on overturning the audit contractor’s or OMIG’s determination on appeal.

In any case, the best way to secure a favorable outcome is to intervene in the audit as soon as possible. Our attorneys are available to help, and we can get started immediately once you call to schedule your free initial consultation.

Contact The Criminal Defense Firm about Your Dental Audit

If you are being audited, you do not have time to waste. Put our decades of experience on your side. To speak with the health care fraud defense team at The Criminal Defense Firm, please call (888) 452-2503 or contact us online now.

Brian J. Kuester

Brian Kuester offers his extensive experience to counsel companies and individuals under civil or criminal government investigation. When resolution requires litigation, clients choose Mr. Kuester’s proven court and litigation experience.