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Taming the Medicare Audit Beast: Three Ways to Improve Your Pharmacy’s Outlook

By Deborah Roberts  
   August 28, 2017

Pharmacies are best positioned for a Medicare audit when they take a proactive approach to documentation and claims on the front-end. Solutions exist to ensure documentation templates are updated to reflect the latest Medicare requirements and identify potential issues before a claim is submitted.

There are few things that rock a pharmacy manager’s world like a Medicare Part B Audit, and the likelihood that an audit request will be received is increasingly high.

Efforts by the Centers for Medicare and Medicaid Services to address “fraud, waste and abuse” has resulted in the introduction of numerous Medicare contractor programs. From a variety of audits, including Medical Review and RAC to CERT and ZPIC, resource-strapped pharmacies must now navigate complex processes and stringent Medicare requirements.

It’s a mammoth undertaking, and the reality is that internal management strategies often fall short of readiness and compliance. The resources required to successfully maintain up-to-date documentation practices as well as respond timely to audit requests are simply a non-starter for many pharmacies.

While some pharmacies choose a hybrid approach that leverages both in-house and external expertise, the best strategy is characterized by engaging a strong partner for end-to-end management of audit responses. The right framework of technology and expertise can improve the outlook on Medicare Audits in the following ways.

1) Improve front-end processes

Pharmacies are best positioned for a Medicare audit when they take a proactive approach to documentation and claims on the front-end. Solutions exist to ensure documentation templates are updated to reflect the latest Medicare requirements and identify potential issues before a claim is submitted.

For instance, small details such as the legibility of physician signatures can warrant a denial. When a pharmacy is leveraging the expertise of a strong partner, there is proactive management of signatures and other details on the front-end to ensure compliance. Without this framework, pharmacies might otherwise have to hire staff to address the nuances of ever-changing Medicare requirements and implement formal education programs.

2) Timely and appropriate response

Pharmacies often struggle with responding in a timely manner to audits due to difficulties identifying if a request has been received. Consider a large pharmacy chain with corporate and accounting offices across the United States, for instance, and the challenge that presents to correctly identifying and managing a request for audit.

Also, because Medicare audits are usually complex and resource intensive, some pharmacies choose to ignore requests, which may potentially allow earned dollars to go back to the payer. The rationale for that decision often rests with the belief that it will cost more to take the time to work an audit than to lose the money.

This practice is not prudent for a number of reasons. First, pharmacies want to keep a solid record of compliance to reduce the potential for future audits—and response is part of that equation. Second, pharmacies might be allowing earned dollars to be recouped by the payer when there are legitimate reasons to retain that money

When the right technology and partner are engaged, pharmacies can streamline processes to enable prompt identification of audit requests and timely responses.

3) Ongoing Quality Improvement

When audit management activity is automated and centralized, greater opportunities exist to identify areas for improvement. Pharmacies can leverage data from robust analytics platforms and expert analysis, and thereby improve feedback and education for the pharmacy.

Audits are inevitable in today’s healthcare climate. In preparation, pharmacies should consider following these key partner strategies to improve front-end processes, enable timely response to audits and provide the visibility needed to improve performance going forward.

Deborah Roberts is Change Healthcare’s Manager Recovery and Audit, CMS Compliance.

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Change Healthcare’s Manager Recovery and Audit, CMS Compliance.

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