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Provider Audits

The Provider Audit Program consists of a variety of investigative steps and procedures, designed to detect misbilling, excessive servicing or utilization, or other forms of abuse of the Plans by physicians and dentists. The audit procedure is a verification of services to ensure that the payment made was appropriate according to the rates and rules of the Medical Care Plan (MCP) Payment Schedule.

Determining Who Gets Audited

With millions of claims submitted by about 1000 providers every year, the Medical Care Plan (MCP) cannot audit each and every provider claim. Instead, Medical Care Plan (MCP) must depend on factors which identify potential audit candidates.

Most provider audits arise from monitoring of practice profiles, targeted fee codes and beneficiary verifications. Some audits also arise from voluntary information provided by concerned citizens.

Practice Profiles

Medical Care Plan (MCP)'s computer system tracks statistical information on all providers and these statistics are used to compare a provider's billing patterns to those of his/her peers. Through statistical analysis, Medical Care Plan (MCP) is able to determine unusual or aberrant patterns of practice which should be audited.

Targeted Fee Codes

The Medical Care Plan (MCP) Payment Schedule assigns a fee code to each service which a provider can offer to a patient. The provider must reference these fee codes when submitting claims for the services.

Statistical reports are generated on a regular basis to determine if certain fee codes are being used incorrectly. The reports identify those providers who may be misinterpreting the fee code or billing it incorrectly. These providers are then selected for audit.

Beneficiary Verifications

Medical Care Plan (MCP) regularly asks beneficiaries to verify that the services which were paid on their behalf were actually provided. Approximately 430 letters are sent out every two weeks. The service to be verified is randomly selected from all services processed in the pay period.

The confirmation letter contains various questions specific to the service which has been billed by the provider. While the primary purpose is to verify that a service was actually provided, it also ensures that the service was billed using the correct fee code and paid at the correct rate. Discrepancies between the beneficiary's response and Medical Care Plan (MCP)'s records are noted for follow-up and potential audit of the provider's billing.

Voluntary Information

Occasionally, concerned citizens will alert Medical Care Plan (MCP) to a situation which is a possible abuse of the Plans. Medical Care Plan (MCP) has a responsibility to ensure that any concerns about improper use of the Plans are addressed and that any abusive situation is corrected. When alerted to such a situation, a review of the provider's profile and billing practices is conducted and may be followed-up by an audit. In these circumstances, the name and address of the complainant, as well as details of the alleged abuse will normally be required. All related information will be treated as highly confidential.

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Types of Provider Audits

When the need for an audit is identified, two types of audits into providers' activities may be conducted: preliminary audits and comprehensive audits.

Preliminary Audits

A small sample of records is randomly selected and the provider is requested to submit photocopies of the patient records for review by a Medical Claims Auditor. A written assessment of the records is produced.

If the findings of the Preliminary Audit indicate correct billing or only minor errors, the audit will be terminated. If there is an indication of misbilling, or if additional information is required, a Comprehensive Audit may be initiated.

Comprehensive Audits

Comprehensive Audits are normally initiated based on the results of a Preliminary Audit, but in some cases the Preliminary Audit step may be bypassed. In a Comprehensive Audit, a randomly selected statistically valid sample is chosen from the most current two years of a provider's claim history. The sample size is determined by statistical formula. The provider is requested to submit photocopies of the patient records for review by a Medical Claims Auditor. A written assessment of the records is produced.

If the findings of the Comprehensive Audit indicate correct billing or only minor errors, the audit will be terminated. If there is indication of misbilling on the part of the provider, action may be taken to recover payments from the provider through a detailed recovery process, in accordance with Medical Care Plan (MCP)'s Payment Recovery Policy.

For cases involving new audit areas, complex or grossly aberrant billing patterns or practices, potential fraud or large recoveries, the file will be thoroughly reviewed by Audit Department management and medical/dental staff to ensure the accuracy of the review and to carefully plan the progress of the audit.

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Recovery Process

Once Medical Care Plan (MCP) has determined that a recovery should be made against a provider for misbilling, proceedings will be initiated to recover payments. For detailed information on the audit recovery process, please contact Medical Care Plan (MCP)'s Audit Department.

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Beneficiary Audits

Beneficiaries, while having a right to receive insured services from providers, may not make substantial, unnecessary use of medical services.

Where Medical Care Plan (MCP) suspects that a beneficiary is making substantial, unnecessary use of services, a Utilization Audit may be conducted into the beneficiary's use to determine the nature and the cost of any abuse. Each suspected case of abuse is decided on its own merits, in consideration of the individual circumstances and the beneficiary's medical history. A chronically ill beneficiary who validly requires numerous services for treatment of a serious illness will not be audited.

The Newfoundland and Labrador Medical Care Insurance Act allows Medical Care Plan (MCP) to assess a beneficiary for abuse of services, and to recover the cost of those services through court action. Medical Care Plan (MCP) may also require a beneficiary to enter into a contract to restrict the beneficiary to receiving services from only one physician.

If Medical Care Plan (MCP) determines that a physician is encouraging a beneficiary to over utilize the Medical Care Plan, an audit into that physician's practice may be conducted.

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