Physician Practice Audit Targets Now Become Hospital and Health System Compliance Risks

In 2013, 22% of the federal budget was spent on Medicare and Medicaid. The Medicare Trust Fund is forecast to be depleted in 2030. More than 12% of Medicare fee-for-service payments in 2014 were made in error. These factors have led Congress to apply more pressure to reduce improper payments. Although hospitals were the initial targets because of their higher reimbursement, recent efforts have shifted to physician billing. Hospitals and health systems continue to acquire physician practices, making them liable for the billing activities of physicians. And for physicians who remain independent, the cost and effort required to respond to audits and denials can be financially devastating, further demonstrating the importance of prevention. This article addresses some of the common audit targets and mistakes made by physicians and provides strategies for physician practices and health systems to respond to and, ultimately, avoid these denials.