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The Health Care Authority (HCA) conducts different types of state and federal audits, in addition to reviews to assure appropriate disbursement of Washington State's Apple Health (Medicaid) funds.

Types of state audits

  • Desk Audits and Reviews
  • Onsite Audits
  • Data mining
  • Algorithms
  • Site Visits

Types of federal audits or reviews

  • CMS Medicaid Integrity Contractor (MIC) audits
  • CMS Payment Error Rate Measurement (PERM) reviews
  • Health and Human Services (HHS) Office of Inspector General (OIG) audits
  • Medicaid Recovery Audit Contractor (RAC) audits

Common audit findings

Non-Covered Services

  • Lack of orders
  • Personal Care items (slippers, shampoo, etc.)
  • Take-home drugs
  • Billing for radiology contrast material when patient does not meet medical guidelines for separate billing of contrast material
  • Purchase of crutches
  • Callback charge
  • Billing for more than one initial charge code per day

Non-verified (Undocumented) Services

  • Pharmacy and I.V. therapy undocumented. (i.e. physician order, time and initials of nurse administering medication, medication units)
  • Start and stop times for services not indicated in medical records
  • Chargemaster errors resulting in overpayment or incorrect coding
  • Medical/surgical supplies: usage not documented; length of time item used; billing beyond time used
  • Overbilling of time for surgery, recovery room, anesthesia, and observation room; medical documentation does not support time billed
  • Emergency record documentation missing or incomplete/insufficient to substantiate billed service
  • Incorrect billing of radiology contrast material (details in Physician-Related Services Billing Guide)

Duplicate Services

  • Overlapping room charges, i.e. emergency room and/or observation room overlapping with inpatient room accommodation charges

Inappropriate Level of Care and Non-medically necessary

  • Outpatient services billed as inpatient
  • Higher levels of care billed when documentation supports lower levels of care
  • Non-medically necessary services
  • Incorrect coding and/or Diagnosis Related Group (DRG) assignment

State initiatives

Payment Review Program: Is nationally recognized for its progressive and innovative approach, sophisticated technology and data mining techniques used to ferret out Medicaid fraud, waste and abuse and to recover overpayments.

Provider Audit and Review Units: The Health Care Authority audit staff conducts onsite and desk audits and reviews Medicaid and medical assistance provider billings to ensure that payments comply with federal and state regulations, and that potential fraud, waste and abuse are identified and referred for further investigation.

Medical Audits and Reviews: Medical audit staff conducts provider post-payment audits to identify providers who are out of compliance. Medical auditors also conduct pharmacy third party liability desk reviews to ensure that Medicaid is not paying for prescription drugs that should be covered by another insurer.

Hospital Audits and Reviews: The hospital audit team has experience in hospital billing practices and conducts post-payment audits on inpatient and outpatient hospital claims to identify abusive billing practices and noncompliance with applicable program rules and regulations.

Pre-payment and Post-payment Clinical Reviews: Licensed registered nurses and registered health information professionals/coders conduct clinical data analysis of inpatient hospital claims, pre-payment and post-payment, to identify atypical practices.

ProviderOne: This payment system provides more robust automation and pre-payment edits and audits.

Triage and Referral: With the implementation of ProviderOne, the Surveillance and Utilization Review Section staff are able to use new technology to monitor the claims processing system and look for patterns of potential fraud and abuse. The tool called "Impact Surveillance and Utilization Review". It uses Medicaid payment data to generate statistical peer group comparisons of Medicaid providers to identify abnormal behavior patterns. The ISUR also responds to constituent referrals for suspected cases of fraud and waste, and it produces provider activity spike detection, which alerts auditors to changes in providers' billing practices earlier than other reports.

Provider Self Review: A voluntary web-based Provider Self Review Program was implemented as part of the second generation fraud and abuse detection system. It invites providers to review claims identified as potentially improper. After providers complete their on-line review they submit the information to the Health Care Authority to review a random sample of their documentation. The Health Care Authority then generates an overpayment notice to the provider for any improperly billed claims.

Authority to conduct program integrity activities

The HCA is governed by laws that provide direction for the HCA’s program integrity activities in regard to Washington Apple Health providers and the recovery of improper payments.

How to know if you are being audited or reviewed

Methods used to select claims for program integrity activities