Hearing the word dental insurance audit and your practice's name in the same sentence is not warmly welcomed. At some point or another, you may find your dental practice the focus of an audit. Preparation is your primary weapon against audits. This is your guide to understanding dental audits, how you can prepare for them, what to do if you receive an audit letter, utilizing the services of a reputable dental attorney, and how to prevent receiving one in the first place!
What is the Purpose of Dental Insurance Audits?
When dental professionals work with dental insurance carriers, they agree to contractual obligations to adhere to local, state, and federal regulations. The purpose of dental insurance audits is to:
- Make sure the treatments administered to patients are necessary;
- The treatments claimed on insurance were actually performed;
- Treatments performed were done so correctly; or
- All treatments and procedures were billed correctly
Audits are a way of check and balances to make sure providers are not taking advantage of insurance carriers by committing fraud. If providers were to take advantage, it would eventually cause detriment to insurance carriers and ruin the benefit of insurance for those who are using it correctly.
The Consequences of a Compliance Audit
Typically auditors will evaluate between 25 and 75 patient files. If everything checks out, you do not owe money and nothing further happens. However, if auditors find procedures that were billed incorrectly or that the procedures filed are not actually covered, then you may end up owing the insurance carrier money.
In worst-case scenarios, auditors uncover consistent issues with incorrect billing practices and claiming uncovered procedures to the point that a fraud investigation is warranted. This, in turn, could lead to a criminal investigation, which could financially ruin your business and your reputation. Most of the time criminal investigations are conducted in cases where auditors suspect that dental claims filed weren't actually performed.
Reasons You May Receive an Audit Letter
If you receive an audit letter, take a deep breath. It doesn't mean you've done anything wrong. Chances are that you haven't. You may have received a letter due to a couple of instances. First, insurance carriers have a lot of information on providers and countless ways to organize and analyze this data. They look for trends and then focus on providers who fall outside of the norm. For instance, if your dental group provided a particular procedure twice as much as other dental groups in your area, it may throw a red flag.
The second instance is if your billing procedures fall outside of the norm as compared to other dental groups in your area. Lastly, if a patient complaint is filed with the state insurance, commissioner or other state or federal agencies. This could also make your practice the target of an audit. It still doesn't mean that there aren't valid reasons for why the provider falls outside of the norm, but it is likely that they will audit these dental insurance providers to ensure obligations are met.
What to Do If You are Summoned to a Compliance Audit
First of all, it is important to cooperate. If you signed a contract to which you agreed to random audits you have no choice. Even if you aren't obligated contractually, it is still advisable to be cooperative. Auditors are just doing their job and you don't have anything to hide. The harder you fight the audit, the deeper insurance carriers will want to dig and for good reason. In the event that you do receive an audit letter, it is a good idea to immediately send in a narrative that fully explains the procedure or concerns in full. Send along supporting documents as well. Doing so may satisfactorily explain these concerns and prevent a full-blown audit.
Steps You Can Take to Be Prepared in the Event of an Audit
Your practice should always take the approach of it is a matter of when not if you get audited. The best thing you can do is to make sure you stay on top of documentation and that patient files are well organized and easy to get to. Often times, you are given 30 days to submit the required information for further review. Make sure your documentation includes the following:
How was the Issue Diagnosed?
Make sure notes include the steps taken to identify the dental issue. This includes any x-rays taken.
Why was the Treatment Necessary?
Most insurance carriers do not cover elective cosmetic procedures. Make sure there is documentation as to why each dental procedure is medically necessary.
Proof of Billing
Keep accurate financial records. Make sure you show in the documentation how the procedure was billed.
If you follow these steps up-front with every single case, when you receive an audit letter, you will be better prepared.
How to Prevent Receiving an Audit Letter
Although there is no way to guarantee that you will never be audited, there are things you can do to minimize your chances. First of all, keep careful and thorough documentation. This helps when it comes to filing patient claims. Unclear or missing information will throw up red flags. Secondly, make sure if there are multiple dentists practicing in your group, that each claim is filed under the appropriate dentist. Filing all procedures under one dentist will incorrectly skew the data and make your practice an outlier when analyzing dental insurance provider information.
The Most Trusted Law Firm for Dentists in California
If you are the target of an audit, the last thing you want is to end up in litigation. The matter could stay tied up in court for quite some time and cost you a great deal of money. You should do everything in your power to settle the matter outside of court. Our experienced team of dental lawyers understands an audit can be stressful for your practice. If you have any questions regarding an audit letter, how to prevent receiving an audit letter, or settling an audit matter outside of court please contact our office at 925-999-8200 or visit our website for more information!