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Academy of Dental Management Consultants Corner: Why auditing is important and how it can impact your dental practice


In recent years, insurance carriers and state Medicaid programs have turned up the heat on dentists. Payors are watching dentists carefully to identify and stop fraud, and recoup overpayments made to providers. Often, insurance and government audits results in repayments.

What’s more is the Affordable Care Act authorized the use of Recovery Audit Contractors (RACs) to identify and recoup overpayments; RACs are paid 12-18% of what they recover. Providers in some Midwestern states have had the displeasure of participating in involuntary RAC audits, many of which resulted in large structured settlements. A message from the Midwest to the rest of the country, “RACs are coming and it won’t be pretty. Clean up your mistakes!”

The U.S. Office of Inspector General (OIG) and other government agencies have stated they expect healthcare providers to police themselves. Regulatory agencies can, have, and will continue to closely monitor dentists for fraud and overpayment issues. Sadly, some agencies have even declared war on dentists. The government's ROI is about $14 for every dollar spent to identify and recover fraud often found in the form of providers’ mistakes.

Medicare, Medicaid/ CHIP providers are required to have a Healthcare Compliance Program (HCP), which involves more than just OSHA and HIPAA. Insurance carriers also require dentists to comply with all state and federal laws, even though they have no specific guidance like the OIG. Considering the push back against dentists, all providers need to implement HCPs as they are a recognized set of guidelines to help providers protect their good names.

The government expects an effective Compliance Program to have seven specific elements. In this article, I am going to review only one element: Internal auditing and monitoring.

Internal auditing and monitoring consists of several sub-elements. First, every practice needs to monitor all credentials (including BLS) to prevent any lapse in licensure by any personnel. Practice during a lapse is akin to the unlicensed practice of dentistry, a criminal violation. Claims submitted during a lapse amount to false claims.

Second, practices that accept government money (including, but not limited to Medicare, Medicaid, CHIP, Tricare, government employee dental plans, and government retiree dental plans) need to continuously check employees and contractors against state and federal exclusion lists. Claims submitted to government programs while an excluded person is on staff can effectively “taint” claims the excluded person is directly or indirectly associated with. Providers in this situation may incur liability for the submission of false claims for which they could face triple repayments and penalties up to $11,000 per claim.

Dental practices need to implement chart audit processes. Prospective and retrospective audits are two common audit processes. Both should be used. It can be helpful to supplement internal audit processes with outside auditors to give you perspective of best practices and cue you in to information auditors look for.

Daily prospective (pre-bill) audits help identify and minimizes billing errors by ensuring accuracy of claims before they are submitted. This step alone can help compliance programs pay for themselves. Periodic retrospective audits involve the detailed review of clinical and billing records for compliance with state and federal recordkeeping and billing requirements. Some items to check include verifying the quality and quantity of radiographs, consent for treatment, proper coding, clinical notes to support each claim that was billed, and medical necessity.

My mantra is: “If It Is Not Written, It Did Not Happen!” Record audits must be documented. In the face of a fraud allegation, this documentation can help your defense attorney make his or her case.

Be well. Do good. Audit often.

Editor's Note: For more information on the Academy of Dental Management Consultants, please click here.

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