How to Respond to a Medical Records Audit

By Paul Cirel

Published in Vital Signs, publication of the Massachusetts Medical Society
September 2007 issue

It’s no secret that payers -- including Medicare, private insurance companies, and HMOs -- have substantially increased their oversight of physician practices, leading to a growing number of medical records audits. From the targeted physician’s perspective, such audits begin with a request for patient records. That request may be for a random sample of patient records, or it may identify specific procedural or diagnostic codes. The request may be for certain patients’ complete medical files or for specific dates of service. Responding carefully to such requests can help you sidestep significant downstream hassles.

While some audits truly are random, most are planned in advance. The prudent provider should assume that there is some common denominator among the records that are selected or a pattern to the billing or other practices that the auditing agency considers suspect.

Not responding to an audit is not an option. Failure to respond is likely to result in a withholding of future payments, disenrollment/debarment from the provider network, or in the case of Medicare, a subpoena for the requested records (and probably additional records, as well).

Completeness Is Key
The first task in responding is to ensure that the records are complete. Each medical record should be compared to its corresponding billing record. Before sending any records in response to an audit request, use the following questions as a checklist for completeness:

Is there a note for each visit?
If a lab test or x-ray was ordered, is the report in the chart?
If a consult was billed, is there a report to the referring physician?
If a referral was made, is there an entry documenting it? 
Two notes of caution when compiling records in response to an audit: first, never fabricate or alter a missing or wanting entry or document. Nothing will lead more quickly to a fraud prosecution than producing records that have been tampered with. If records are incomplete, include a cover letter that provides the missing information. If such an addendum is necessary, seek the advice and/or assistance of legal counsel.

Second, the current trend in audit requests is for particular dates of service rather than complete medical files. Such requests can be traps for the unwary. This is not a situation where less is best, and here’s why:

Medical records -- and a physician’s knowledge of his or her patient -- are cumulative by nature. Isolated date-of-service entries are often inadequate to reflect the complexity of both the patient’s medical history and the physician’s medical decision-making. Since those are two key components in determining the appropriate evaluation and management (E/M) service level to be billed, if you don’t provide sufficient documentation to support those decisions, the auditor may down-code -- or disallow -- the level of service billed. “Recoupments” add up fast, especially when auditors use the sample as a basis to extrapolate a larger overpayment.

In addition, isolated service date information may not include related test results, x-ray reports, or consultations (each of which often contributes to the E/M coding decision). Include all this collateral information with your response to the original request. Although most insurers have post-audit appeals procedures, the after-the-fact submission of additional materials may be viewed with a jaundiced eye.

Lastly, unless the auditors specifically request it, do not submit original records. For your records, be sure to make at least one complete copy of the records you submit, and number the pages.

– Paul Cirel, partner Dwyer & Collora