As upsetting as it may be to receive a notice that you are being audited, there is equal (or perhaps greater) frustration when the payer demands repayment for services you feel were correctly reimbursed, properly documented and rendered according to standards of medical necessity.

In those cases, an appeal of your chiropractic audit is absolutely necessary for several big reasons:

  • If your side of the equation is right, there is no need to send money back
  • If you fail to appeal, you welcome additional audits (if you just cut the check once, why not ask you for money again and get more?!)
  • Payers make MANY mistakes when auditing chiropractic services (and therefore may not deserve any or all of your money back)

Common Mistakes Payers Make

There are many effective ways to appeal a demand for overpayment, but today we are going to focus on appeals that target errors the PAYER has made in their audit process.

Over the past decade of doing chiropractic audit defense work, I have unfortunately discovered that more than 90% of all chiropractic audits contain some serious and significant errors made by payers which leads to massively incorrect overpayment demands in many cases.

Here are five common areas of mistake you need to be aware of in audits. All would merit an appeal:

Challenging a statistical sampling and extrapolation: Put simply, extrapolation is the process by which a payer looks at a small sample of your records and makes a determination for the entire audit population based on their findings. In other words, the payer may review 10 records and accuse you of a 90% error rate (you billed, coded or documented 9 of those records incorrectly). The extrapolation them comes when they apply that 90% error rate to the 1458 patients you have seen in the last 18 months (or whatever the legal limit is in your state or contract). As you can imagine, the math of overpayment demands can come up with some very large numbers when extrapolation is used.

There are two big problems we’ve found when payers use this: first, the payers almost always use extrapolation in inappropriate circumstances. There are rare occasions        that extrapolation can be legitimately used by payers use it with wild abandon. Secondly, payers all too frequently use bad or creative math. You can quickly grab a statistician or someone with expertise in this area, show them the formula (if you can find one) that the payer used and then sit back and watch smoke pour out your expert’s ears. The math is often statistically irrelevant or utilizes a bizarrely complicated formula that makes putting a rocket into space like a kindergarten exercise.

Failure to Adhere to Lack of Notice or Appeal Guidelines – many times a payer will fail to give adequate appeal notice (as written in your provider contract) or they will actually contradict their own appeals process and move straight to offsetting your checks. Yes, that means they take your money back (out of your future checks) before you have a chance to fight back. This is a direct violation of your provider rights and even if you are not a contracted provider, every payer has an appeals process they adhere to – and it probably violates that.

Improperly Offsetting Future Checks – closely related to the above audit error is the methods that a payer chooses to offset your checks. An overwhelming majority of the time a payer decides to offset your checks, they fail to research if they have made underpayments to you (they forget to audit themselves) and/or if they have outstanding dates of service that are yet to be reimbursed (again, they don’t check for that). So in the process of taking money out of your future checks, they fail to notice the money that they may owe you and therefore actually take more back than they should.

Enough! For Now…

I’m sure your blood is boiling here just with these three audit mistakes. The simple solution? Appeal all of them – and make sure that you are not being negatively affected by sloppy auditing.

And when your blood pressure recovers, we’ll discuss two more audit mistakes commonly made as well as some strategies on how to handle those as well in Part 2 of this article.

Until next time, keep fighting the good fight and don’t give up too easily!