There are many types of Medicare audits, conducted by many types of Medicare contractors: Medicare Administrative Contractors (MACs), Recovery Audit Contractors (RACs), Unified Program Integrity Contractors (UPICs), the Supplemental Medical Review Contractor (SMRC), and others. Sometimes, where a Medicare audit results in a relatively small overpayment demand, a healthcare provider may consider simply paying it and moving on. However, there are several reasons why Medicare audits should be appealed, regardless of the dollar amount at issue, that providers should consider.
First and foremost, the audit results and overpayment determinations issued by Medicare contractors are often erroneous. This may be because the contractor either misunderstands Medicare requirements, misapplies them to a provider’s records, or misapprehends the medical documentation in the first place.
Second, a provider who does not appeal a Medicare audit result may unwittingly signal to the contractors a tacit admission that the audit findings were correct, and that the provider is non-compliant in some way. This may expose the provider to additional, larger audits on the same issues. Further, some contractors are paid a percentage of the overpayments they demand from providers and may have an incentive to conduct further audits. On the other hand, appealing an audit signals that the provider believes it is following Medicare requirements and are entitled to payment.