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Routine self-audits: A guide for providers

Keep your practice compliant and avoid financial risk with these tips

As a healthcare provider, it is important that your recordkeeping and claims submission processes are accurate and compliant with applicable regulations. One of the best ways to ensure this is by conducting routine self-audits of your medical records and your claims, prior to submission.

Routine self-auditing is a proactive step that helps ensure compliance, improves the quality of care, and protects your organization from financial risk. This article explains why self-auditing is crucial and provides guidance to help you get started.

Why conduct routine self-audits?

Magellan encourages providers to conduct routine self-audits to help identify and correct errors in your documentation and billing processes before they lead to overpayments or claim denials. A provider may also be required to complete a self-audit in response to findings from an investigation, audit, analysis of your claims, or to comply with regulatory and contractual requirements. This includes services rendered under Medicare, Medicaid, SCHIP and other federally funded healthcare programs.

Self-disclosure reporting of potential fraud, waste, and abuse (FWA)

Per the Magellan National Provider Handbook (PDF), Section 4: The Quality Partnership, Fraud, Waste, Abuse and Overpayment:

“Providers can disclose self-discovered evidence of potential fraud, waste, abuse, and overpayments to federal and state regulatory agencies, and also can self-disclose information to Magellan. Self-disclosure gives providers the opportunity to avoid the costs and disruptions associated with a government-directed investigation and civil or administrative litigation.”

Review additional information regarding provider self-disclosure protocols on the OIG.HHS.gov website. States may also have specific self-disclosure protocols as posted on their Office of Inspector General websites or on other applicable state regulatory agency sites.

Creating a claims auditing policy

We recommend that you develop a Claims Auditing Policy that includes (at a minimum):

1. Frequency of audits: Are your audits monthly, quarterly or annual?
2. Number or percentage of records reviewed: Do you review a certain percentage or all records from a certain period?
3. Sample selection: Will you select a random sample, specific focus areas, etc.?
4. Audit type: Are audits conducted prospectively (before claims are submitted) or retrospectively (afterward)?
5. Indicators measured: What indicators will the audit check (correct use of modifiers, proper documentation, etc.)?
6. Corrective action procedure: What steps will you take to correct claims error findings?

Types of provider self-audits

There are three main types of provider self-audits, whether provider-initiated or requested by Magellan. Here’s a quick look at each:

• Option 1 - 100 Percent Claim Review
• Option 2 - Provider-Developed Audit Work Plan – For when a 100 percent claim review is not feasible
• Option 3 - Statistically Valid Random Sample (SVRS).

When Magellan requests a provider conduct a self-audit, the audit plan must be submitted to Magellan for pre-approval.

Reporting your audit findings

After completing a self-audit, it’s important to compile a comprehensive report. At a minimum, your report should include the self-audit mechanism utilized (Option 1, 2, or 3), the audit’s scope, and any corrective actions taken.

In most cases, you can submit reports directly to SIU@MagellanHealth.com. For the Pennsylvania HealthChoices program, see exception.

For more information

• You can review Magellan's policy on self-disclosure reporting and conducting routine self-audits in Section 4 of Magellan's National Provider Network Handbook (PDF), including:
• Cooperating with Magellan's audits and investigations.
• What to expect during a FWA or overpayment audit or investigation.

• If you have additional questions regarding our audit/investigation processes, contact the SIU via email (SIU@MagellanHealth.com) or via our hotline 1-800-755-0850 (you can remain anonymous).