Oberman Law Firm

OBERMAN LAW FIRM

Add Your Heading Text Here

Dental Practice Audits

Dental audits were rare at one time. Now, however, with insurance companies and third party payers auditing more routinely, it is much more likely that a dental practice will fall victim to an audit. Most dental practices that are contracted with dental plans are audited at least once during the course of their practice. Many of these dentists are left wondering why audits are becoming a more routine exercise of third party payers. The answer: alarming statistics. The Federal Bureau of Investigation estimates that ten percent (10%) of the money expended on health care is due to fraudulent activity. Insurance companies estimate that fraudulent health care billing represents up to $10 billion each year.

In addition, Medicare fraud is becoming more rampant. The United States General Accounting Office estimated that out of every $7 spent on Medicare, $1 is lost to Medicare fraud. Fraud is adding enormous costs to the nation’s health care system. As more and more fraudulent health care charges rack up for insurance companies to pay, insurance companies are becoming serious about auditing health care practices. With a thorough understanding of the audit process, dentists will be better prepared for what appears to be inevitable. Discussing their business with a certified accountant company like Eide Bailly can help stand them in better stead.

After receiving notice of an impending audit, dentists often wonder why their practice has been targeted. Generally, the audits conducted by dental plans and third-party payers are a method of showing state regulators that the patients are receiving quality care. A third-party payer is an organization other than the patient (which would be the first party) or health care provider (also known as the second party) involved in the financing of health care services. The audits are typically meant to check the status of a dental plan and are not meant to be a check on the specific dental practice. The selection process third parties undertake to audit a given dental practice varies. Third parties may randomly pick dental practices on the basis of how likely the practice is to have discrepancies once audited. The third party’s goal is to recoup lost dollars, and so this strategy is chosen to allow a third party to obtain the largest return.

A dental practice is most likely to be audited after submitting atypical claims online. Each claim submitted is analyzed by a third-party payer. The auditors flag abnormal or atypical charges, as these may suggest provider abuse. Additionally, third parties track information on practice charges by analyzing the average cost per claim, the average cost per person, and how often certain treatments are performed. With this information, the third parties target specific dental practices for an audit.

Auditors typically share common goals. By conducting audits, third party payers are attempting to prevent abuse of the payment system. By performing audits on practices, dentists are forced to understand the importance of keeping records and submitting only honest and accurate claims. Also, dentists are more likely to keep accurate records and submit truthful claims when they know an audit may be lurking than if they assume their dental practice will never fall victim to an audit. A second goal ties in with the first, and that is to help dentists understand and follow the third party payer’s guidelines. Finally, the auditors are trying to find instances of overpayments to dental practitioners for claims the dental practice has submitted.

Many dentists want to know what to expect if their practice gets hit with an audit. First, the dentist will most likely be notified of the impending audit by a letter, however the third party payer may make initial contact with the dental practice by telephone. When a telephone call takes place, a day and time for the audit will be arranged, and the dentist should ascertain what type of audit will be conducted. It is also advisable to ask why the audit is being performed. The answer may be that it was simply a random selection, but a dental practitioner should make certain that it was not because of a claim submission that the third party payer flagged as abnormal.

When auditing the dental practice, the insurance plan will most likely send representatives to the dental practice to ensure that billing claims match documentation in patient files. Auditors will analyze whether amounts paid to the practice were for an actual member of their insurance plan, whether the services rendered were actually provided according to treatment plans, and whether the services provided by the dentists were in accord with federal law.

Additionally, auditors may analyze patient files. Auditors may be interested in reviewing patient medical histories, dental histories, documentation of oral examinations, treatment notes, diagnosis, procedures completed, the outcome of each procedure, and follow-up care. It is also possible that documentation supporting submitted claims will be requested during an audit. Problems encountered during audits are most likely to be caused by improper documentation of records rather than by fraudulent billings. The dentist is typically without recourse if the records in the patient file do not match up with the claims billed. To avoid mistakes like this, many practices will often outsource medical billing to a professional company, like Precision Medical Billing, that can manage bills and repayments for them.

Various state laws and the HIPAA (Health Insurance Portability and Accountability Act) Privacy Rule permit third party payers to access and review the health records of their own members. However, third party payers are no longer permitted to access the records of patients who are not enrolled in their plans like they were in the past. Therefore, third party payers are no longer able to compare their enrollees’ records and charges with those of patients not enrolled under their plans.

Aside from auditing the patient files, the third party payer may also access the quality of the facility, the maintenance of the equipment, the level of difficulty patients on their plan encounter in obtaining appointment times, and the level of compliance with federal regulations during the course of the audit. It is prudent that the dentist remains with the auditor at all times. It is worth the time to clear the calendar on the day of the audit and to stay with the auditor as patient and billing records are reviewed. Also, the staff of the dental practice should be prepared for the audit, and the dentist should discuss the procedures to be followed prior to the day it is conducted.

Since dental audits are becoming a routine part of doing business, dentists must protect their practice by preparing their office for an audit. To prevent audit problems, dentists should make themselves aware of terms of any third party contracts, keep the plan manuals in a safe place so the dentist can refer back to them, ensure each procedure performed matches the procedure billed, and ensure that all patient records are organized and contain all relevant information on each patient. Also, when claims are filed online, ensure that the correct price is sent to the third party insurer. With a more thorough understanding of third party audits and the third party payer’s motivation for conducting them, dentists will be more likely to avoid costly mistakes.

Author(s)

Stuart J. Oberman, Esq.
President & CEO | Website | + posts

Stuart J. Oberman is the founder and President of Oberman Law Firm. Mr. Oberman graduated from Urbana University and received his law degree from John Marshall Law School. Mr. Oberman has been practicing law for over 28 years, and before going into private practice, Mr. Oberman was in-house counsel for a Fortune 500 Company.
Read More =>

administrator
Stuart J. Oberman is the founder and President of Oberman Law Firm. Mr. Oberman graduated from Urbana University and received his law degree from John Marshall Law School. Mr. Oberman has been practicing law for over 28 years, and before going into private practice, Mr. Oberman was in-house counsel for a Fortune 500 Company. <strong><a href="https://obermanlaw.com/people/stuart-j-oberman/"><span style="color: #0059b8;">Read More =></span></a></strong>

YOU MAY ALSO LIKE

Leave a Reply

Your email address will not be published.