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What to Do When a Letter from Connolly Healthcare or AdvanceMed Arrives

Because almost all physicians will be involved with a Medicare audit at some point in their careers, it is important for physicians and practice managers to know how to prepare for these audits and to respond to records requests by Medicare contractors. There are two primary types of Medicare contractors currently conducting audits of physician practices in Tennessee - RACs and ZPICs. This article provides recommendations on how to respond to a contractor’s request for medical records.

Following the creation of the Medicare Integrity Program in 1996, the Centers for Medicare & Medicaid Services (“CMS”) began contracting with outside organizations to assist with cost containment measures related to Medicare services. As a result, an alphabet soup of private contractors such as MACs, PSCs, ZPICs, MICs, QIOs and RACs have been commissioned to “find and prevent waste, fraud and abuse in Medicare.” In March of 2010, President Obama announced that new efforts will be undertaken to “crack down on waste and fraud in Medicare, Medicaid, and other government programs through the expanded use of payment recapture audits.”

Furthermore, the Administration noted that, “these auditors can be compensated based on the amount of improper payments they identify and are reclaimed – providing a powerful incentive to find every error.”

The Medicare Recovery Audit Contractor (“RAC”) for Tennessee is Connolly Healthcare. Although the RAC program expansion has been a gradual process over the last couple of years, it is now in full swing in Tennessee. Connolly has already begun auditing Part B providers in West Tennessee. The Medicare Zone Program Integrity Contractor (“ZPIC”) in Tennessee is AdvanceMed Corporation. ZPICs are focusing their efforts on practices and services that pose the greatest risk to the Medicare program.
When you receive a request for medical records from Connolly or AdvanceMed, it is important to take the request seriously and to have a protocol in place for responding to such requests. Below are 12 steps to help you through the process:

Step 1: Act quickly and make your response a high priority, even if only a small number of records are requested. Medical records requests are a serious matter. This IS a big deal!

Step 2: Pull the requested medical records and associated billing records.

Step 3: Review the records to identify potential problems. Remember, the record request was not generated at random. The contractor is looking for some specific error.

Step 4: Do your research. Review applicable billing and documentation requirements, including CPT code requirements, NCDs, LCDs, program transmittals, and contractor policies and provider manuals. If the problem is not easily identifiable, consult with your coders, nurses, and/or doctors, or contact a professional to assist you.

Step 5: Make sure the notes are clear and legible. If you think someone else might have trouble reading your documentation, create and submit a transcribed copy along with the original documents. If the documentation includes non-standard abbreviations, provide a legend for abbreviations with your records.

Step 6: Ensure the documentation is complete prior to mailing. Although it is important to act quickly and meet all deadlines, you don’t want to rush the process and carelessly forget to include relevant documents. Contractors will question any documentation that is provided at a later date to supplement the record.

Step 7: Supply the requested records, but be sure to clarify in writing that there may be additional records relating to the patient not in your possession, such as hospital records.

Step 8: DO NOT SIGN STATEMENTS CERTIFYING THE COMPLETENESS OF THE RECORDS! It is very important that you do not certify the completeness of the records until you are absolutely certain that all documents have been provided, including any documentation not in your possession.

Step 9: Retain a copy of all documents provided to the audit contractor.

Step 10: If you discovered a potential problem when reviewing the requested records, contact a consultant or healthcare attorney to conduct an internal review of other claims similarly submitted over the past three years, which is the length of time CMS can go back and review claims without alleging fraud. This will help you estimate your potential repayment obligation and plan financially to prepare to make repayment. We recommend that internal reviews and compliance audits be conducted at the direction of legal counsel so that the audit, its findings and any associated legal advice are protected by the attorney-client privilege. If internal audits are conducted by the practice or by a hired consultant without the direction of legal counsel, then the audit and its findings may be obtained by the government in an investigation or “discovered” by a third party in litigation.

Step 11: Be prepared to receive a subsequent demand letter saying that you owe a large sum of money back to Medicare. No matter how good you think your documentation is, it is likely that the contractor will initially determine that there has been some amount of overpayment. Remember, you will have an opportunity to appeal.

Step 12: When you receive the demand letter, contact a healthcare attorney who has experience in appealing Medicare denials to assist you in the appeals process. Also, immediately contact your medical malpractice insurer to find out whether your policy covers any of the costs associated with an appeal. Most medical malpractice insurers pay physicians’ attorney’s fees up to a policy-specified dollar amount to appeal.

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