This blog is Part 2 of our series, Protect Your Practice.
When a health care provider becomes the subject of an audit by an insurer, it is critical that the provider respond promptly and with caution to protect their practice. Regardless of how the audit begins (whether it is a random check or an investigation of an identified concern), the consequences of an audit or investigation by an insurer can be serious and far reaching.
There are a few important differences between an audit by an insurer and an investigation by a professional regulator (for more on regulatory investigations, please see Part 1). Insurance companies do not have statutory powers of investigation, but they control who they are willing to do business with. Insurance companies are corporate entities who have no obligation to accept or approve insurance claims related to care from a health care provider. If insurers have concerns about a provider's practices, they may choose to "delist" the provider, which means that the provider is removed from the insurer's roster of health care providers.
Once a provider is delisted, the insurers will not approve claims from that provider, which can have a significant impact on the provider's ability to provide services to patients who rely on their private insurance to pay for their services. This outcome can also damage a provider's professional reputation, disrupt practice operations, and even trigger further scrutiny from regulatory colleges. While insurers typically initiate delisting due to suspected fraud or billing irregularities, their audit and decision making processes are not always transparent, and providers may have limited opportunities to respond or reassure the insurer before their names are added to a delisted provider registry. Sometimes, the actions of one provider or administrator can lead to a whole practice being delisted.
Unlike regulatory bodies, insurers have no clear requirement to provide procedural fairness or transparency to those they investigate, or to reconsider their decision after it is made. Once providers are delisted, it is more likely than not that they will stay delisted. In this respect, insurance investigations can lead to more permanent outcomes than investigations by regulators.
Delisting is a diagnosis that few providers can afford. Prevention and early intervention can have a huge impact on the outcome of an insurance audit. The following are our tips for navigating an insurance audit:
- Preventative Compliance: All health care providers can benefit from ensuring that their billing and record keeping practices comply with legal and professional requirements. Having good administrative practices can also help make the audit process run smoothly. If a problem is identified in the course of a routine self-review of billing or record keeping practices, contact legal counsel to discuss whether a pre-emptive report to an insurer is advisable.
- Preserve All Communications: Keep a detailed log of all correspondence with the insurer, including emails, letters, and phone calls. This log should include the dates, times, and content of any verbal interactions with the insurer.
- Insurance: Check in with your professional liability insurer, as some insurers provide funding or access to legal counsel to assist with responding to investigations.
- Seek Legal Counsel Immediately: Engage a lawyer experienced in health law and insurance disputes as soon as you are notified of an insurance audit or investigation. Early legal advice can help you avoid missteps that may worsen your situation. Do not provide statements or attend interviews with insurance investigators without consulting legal counsel. Even informal conversations can be used against you later.
- Be Proactive, Not Defensive: Cooperate professionally, but cautiously. Demonstrating a willingness to provide requested information and to clarify or correct errors (if any) can sometimes mitigate the outcome, especially in cases of administrative oversight rather than intentional fraud.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
