How Attorneys Challenge Improper Audits & Healthcare Fraud Claims

How Attorneys Challenge Improper Audits & Healthcare Fraud Claims

Being audited or accused of healthcare fraud can be stressful for any medical practice. However, attorneys have several strategies to challenge audits and fraud allegations they believe are unfounded or improper. This article provides an overview of common defenses and approaches attorneys use.

Understanding Audits

Healthcare audits examine coding, billing, medical necessity and other issues to identify potential overpayments or fraud. Common auditors include Medicare contractors, Medicaid integrity contractors, recovery audit contractors (RACs) and commercial insurers.

Audits typically begin with a letter requesting records. The auditor reviews documentation and identifies perceived problems. You then receive a findings letter detailing suspected overpayments or other issues.

At this point, your attorney can help craft an effective response and challenge audit findings. Defending audits requires understanding billing rules, payer policies and your legal rights.

Attorney Strategies for Responding to Audit Findings

Verify Audit Calculations

Your attorney will verify the auditor’s overpayment calculations and extrapolation methodologies. Errors here can significantly reduce extrapolated overpayments.

For example, a RAC found 20 coding errors out of 200 claims sampled. The RAC used this 10% error rate to extrapolate overpayments for 20,000 total claims, calculating a $100,000 overpayment. However, your attorney discovers the RAC actually found 19 errors — reducing the error rate below 10%. This cuts the extrapolated overpayment in half to around $50,000.

Challenge Audit Sample Validity

Attorneys also evaluate whether the audit sample was random and representative. For instance, a RAC may review only claims above a certain dollar amount, biasing the sample toward higher-paying codes. Your attorney can argue this skewed the error rate.

In some cases, an invalid sampling methodology can invalidate the entire extrapolated overpayment calculation.

Dispute Medical Necessity Findings

When auditors allege services weren’t medically necessary, attorneys review the relevant documentation and payer policies. Oftentimes, reasonable differences in clinical judgment account for the perceived lack of necessity.

By citing documentation and having an independent physician review the records, attorneys build arguments services were reasonable and necessary given the patient’s circumstances. Presenting supportive medical literature also helps dispute these cases.

Allege Coding/Billing Rules Were Followed

Similarly, attorneys fight coding and billing errors by demonstrating the services furnished aligned with payer rules and documentation guidelines.

Highlighting where policies were followed, where rules are vague or where the auditor misinterpreted guidelines can undermine allegations. Your attorney may also leverage coding experts to validate your billing methodology.

Seek Settlement Through Negotiation

Settlement often saves legal expenses and eliminates further uncertainty. Skilled attorneys negotiate with auditors and payers to reduce overpayments and penalties below initial demands.

An experienced attorney can discern an auditor’s bottom line for settling. Reasonable settlements may reach 60-70% below initial audit findings.

Appeal Audit Determinations Administratively

If defending the audit with documentation and arguments fails to produce satisfactory results through settlement or dismissal of findings, administrative appeals are options before litigation.

For Medicare audits, attorneys can request redetermination from the same MAC that conducted the audit, followed by reconsideration from a different MAC. Subsequent levels of appeal include hearings before an Administrative Law Judge and reviews by the Medicare Appeals Council.

At each stage, attorneys can submit briefs refuting the MAC’s evidence and legal basis for alleged overpayments. Oral arguments also occur at ALJ hearings.

Attorneys Challenge Healthcare Fraud Allegations

Beyond post-payment audits, the government also investigates and prosecutes providers for healthcare fraud. Common allegations include billing for services not performed, falsifying diagnoses to justify care and paying kickbacks for referrals.

If found liable, providers face stiff fines, exclusion from federal healthcare programs and even imprisonment. However, experienced attorneys can often successfully defend providers against fraud allegations they believe are misguided or unfounded.

Common Attorney Strategies for Fighting Healthcare Fraud Charges

Conduct an Independent Investigation

Upon learning a client is under investigation, attorneys immediately start investigating the allegations’ merits. This involves reviewing the records in question, interviewing staff who furnished the care and analyzing relevant billing data.

The independent probe either validates concern certain activities may be fraudulent or provides evidence countering the accusations. Findings guide the attorney’s defense strategy and response to investigators.

Negotiate Settlement Agreements

Rather than risk harsh penalties with a failed defense, attorneys commonly negotiate settlement agreements admitting limited liability in exchange for reduced fines and avoidance of exclusion.

Though not an admission of guilt, these agreements let providers resolve the fraud investigation and continue participating in federal healthcare programs. Settlement terms vary based on the nature of allegations and strength of evidence but may include integrity training, monitoring and repayment of overpayments.

Self-Disclosure of Overpayments

If an internal investigation reveals actual overpayments, self-disclosure to the payer can garner cooperation credit and mitigate penalties. Admitting errors and promptly returning any overpayments demonstrates the provider’s good faith compliance efforts.

Attorneys handle self-disclosure logistics while advocating for the most favorable settlement possible. Depending on facts, some overpayments may qualify for self-disclosure protocols limiting fines and exclusion risk.

Litigation & Trial

In cases with strong evidence refuting accusations and reasonable settlement offers unavailable, litigation may be necessary. Attorneys defend clients against fraud charges in court by contesting unfounded assumptions and unreliable methodologies underlying the prosecution’s overpayment calculations and damage estimates.

Effective trial attorneys highlight where the relator misinterpreted medical policies, clinical nuances of care delivery and the client’s actual billing protocols. Just poking holes in the prosecution’s theory of fraud may raise enough doubt for acquittal.

Attorneys also seek to exclude prejudicial evidence and witness testimony lacking scientific rigor from trial proceedings. Convincing a judge to prohibit questionable audit samples, unqualified expert opinions and speculative extrapolation models makes defeating spurious fraud allegations much easier.

Hopefully this overview of attorney strategies for challenging audits and fraud investigations provides a helpful starting point for medical practices seeking legal advocacy when facing allegations of improper billing. Reach out for more information on retaining counsel to dispute unfavorable audit determinations or defend against false claims. The right attorney makes all the difference in achieving fair and just resolutions.