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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
  • Managed care audit/oversight

Types of federal audits or reviews

  • CMS Unified Program Integrity Contractor (UPIC) 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

Noncovered 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

Nonverified (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 Nonmedically necessary

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

Areas of Program Integrity

The Health Care Authority program integrity staff conduct audits, reviews, and oversight of its Managed Care Organizations (MCOs), 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.

  • Our 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.
  • Through Medical Audits and Reviews, the Medical audit staff conduct provider postpayment 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.
  • Through Hospital Audits and Reviews, the hospital audit staff has experience in hospital billing practices and conducts postpayment audits on inpatient and outpatient hospital claims to identify abusive billing practices and noncompliance with applicable program rules and regulations.
  • Through Prepayment and Postpayment Clinical Reviews, our Licensed registered nurses and registered health information professionals/coders conduct clinical data analysis of inpatient hospital claims, prepayment and postpayment, to identify atypical practices.
  • Our Surveillance and Utilization Review Section (SURS) staff, are able to use new technology to monitor the claims processing system and look for patterns of potential fraud and abuse. It uses Medicaid payment data to generate statistical peer group comparisons of Medicaid providers to identify abnormal patterns.

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