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A proactive and targeted approach to billing audits

Sheva Sanders (sheva.sanders@stinson.com) is a Partner and Jessica Wheeler (jessica.wheeler@stinson.com) is an Attorney in the Minneapolis office of Stinson LLP. Habib Ilahi (habib.ilahi@stinson.com) is a Partner in the firm’s Washington, DC, office.

Incorrect billing to government programs, such as Medicare and Medicaid, can result in substantial liability under the federal False Claims Act (FCA).[1] Any person found to violate the FCA is liable for treble damages plus a civil penalty between $5,000 and $10,000, adjusted for inflation, per claim, and each line item submitted to the government may constitute a separate claim. Appropriate use of billing audits can help you avoid the submission—or allow the timely correction—of incorrect and, at least potentially, false claims. However, in our experience, many companies conduct billing audits only as a response to a crisis. A more proactive approach would be beneficial, allowing healthcare companies to identify and correct errors prior to being called to task. Even where unsuccessful in identifying errors, the existence of such a program may be useful to demonstrate a commitment to compliance, which could result in lower penalties in the event of a prosecution for an FCA violation.[2] What is more, when they do conduct audits, many healthcare companies fail to audit effectively. Below we provide guidance on how to build an audit program into your compliance efforts.

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