On August 15, 2018, the Michigan Department of Health and Human Services (MDHHS) announced the initiation of post-payment claims audits to identify and recover overpayments made to Medicaid providers. These audits will be overseen by the MDHHS Office of Inspector General (OIG) and will be conducted by AdvanceMed, the Midwestern Unified Program Integrity Contractor (UPIC) for the federal Centers for Medicare & Medicaid Services (CMS).

The audits will come in two forms: automated and complex. Automated audits will not require review of clinical records, while complex ones will. AdvanceMed may not request more than 150 records per request, or 500 in a three-month period by billing NPI. Providers will not be reimbursed for the cost of producing requested records. In addition to record reviews, AdvanceMed may conduct interviews of providers and beneficiaries, and on-site visits.

Paid claims with a date of service beginning 10/01/2014 or later are eligible for review. For now, only fee-for-service claims are included in these audits, but all provider types may be audited. AdvanceMed may use statistical sampling and extrapolation on a case-by-case basis to determine the amount of the overpayments. Interestingly, AdvanceMed will not identify or act upon underpayments.

Providers will have several opportunities to object to AdvanceMed findings. In a complex audit, AdvanceMed will issue draft findings after review of the requested medical records. Providers will be able to submit rebuttal documentation within 30 days of receiving the draft findings. Once a final recovery notice is issued in either an automated or complex case, providers will have another 30 days to request either an internal conference or an administrative hearing. If a provider elects an internal conference, the provider will have 30 days from the report of the conference findings to request an administrative hearing. If the provider submits a timely request for an administrative hearing or an internal conference, no recovery of the identified claim will occur until the appeal is resolved.

MDHHS notes: “All correspondence regarding these post-payment audits will be sent to the correspondence address that is listed in the Community Health Automated Medicaid Processing System (CHAMPS). Therefore, providers should ensure their correspondence address in CHAMPS is accurate.”

The alphabet soup of government auditing entities is being served up to Medicaid providers. In addition to potential repayment risk, these audits have a distinct program integrity flavor and may be gateways to fraud and abuse investigations with civil and criminal consequences. Medicaid providers would be wise to review both their paid claims and their billing processes to spot and fix any vulnerabilities.