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Comparative Billing Reports and the Risk of a Future Audit

The Centers for Medicare and Medicaid Services (“CMS”) are using Comparative Billing Reports as a tool to educate providers about their individual billing practices. Comparative Billing Reports (“CBRs”) show individual providers how their billing patterns for various codes and procedures compare to the state average and the national average for providers within the same field (e.g. physical therapists and chiropractors). These comparative studies are designed to help providers review their coding and billing practices and utilization patterns, and take proactive compliance measures. CMS has stated that “the CBR is not intended to be punitive or sent as an indication of fraud. Rather it is intended to be a proactive statement that will help the provider identify potential errors in their billing practice.”

CMS awarded Safeguard Services, LLC the contract for producing the CBRs and has recommended that CBRs be sent out to certain provider types that have been identified as a vulnerability in the Medicare Program. As of now, the provider types that have been identified to receive CBRs are physical therapists, chiropractors, ambulance, hospice, podiatry, and sleep studies. A maximum of 5,000 providers will be selected to receive CBRs in each provider class.

CBR data analysis involves the same data-mining tools used by Medicare audit contractors to identify candidates for audit. If you have received a CBR or are a possible candidate to receive a CBR in the future, CMS may consider you a statistical outlier in comparison to your peers, subjecting you to an increased risk of audits. It is important to review the information provided, ensure the data reported is accurate and integrate any necessary compliance measures. CBRs are to be used as a tool for providers to look at their individual billing patterns in comparison to peers in their specialty, identify any potential errors and take proactive compliance efforts. Upon receiving a CBR, it is vital that providers evaluate the information and design a proper compliance plan to address any vulnerabilities and prepare for or defend against potential future audits. If you are a recipient of a CBR or are among the provider types that have been identified to receive CBRs (i.e. physical therapists, chiropractors, ambulance, hospice, podiatry, and sleep studies), please contact a Wachler & Associates attorney at 248-544-0888 to discuss evaluating the CBR analysis and development of an appropriate compliance plan that will reduce audit risks.