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Conducting a Gap Analysis / Mock Audit: An Essential Compliance Tool for Your Practice

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Health Care Providers Should Conduct a GAP Analysis / Mock Audit of Their Claims. (November 15, 2011): Understandably, health care providers have grown weary of government audits, malpractice issues, peer reviews and private payor assessments.  In an effort to reduce their potential liability, many providers are now regularly utilizing Gap Analyses Mock Audits to test their preparedness for audit.  In doing so, they have been able to identify and correct potential problems before they result in more serious problems.  The purpose of this brief article is to discuss the process of conducting a preliminary or mock audit of your medical records, documentation, coding and / or billing practices so that remedial measures can be taken if deficits are identified.


I.     “How Much is Enough” When You Are Implementing an Effective Compliance Program?

Drafting and implementing an effective compliance plan, conducting a GAP Analysis and training your staff on compliance issues are essential steps toward the peace of mind compliance can bring. But the question remains — how do you know when you’ve done enough?

In the end, the answer is that you can never do enough to completely eliminate all the risks, but you can minimize those risks and limit your possible exposure through the implementation of, and adherance to, an effective compliance plan. Mock audits can be used as a way of “testing” your compliance initiatives.

II.     How is a Gap Analysis or Mock Audit Conducted?

In a mock audit, an individual or team acts as a government agency or contractor (such as a ZPIC, RAC or MAC), and visits the practice or facility unannounced.  The mock auditor would then pull a random set of records to conduct a documentation analysis (often including both medical records and business arrangement records). Once the records are pulled, an analysis of the relevant findings is completed. These results would then be discussed with practice management so that the relevant strengths and potential areas of concern can be addressed.

III.     What is the Goal of a Gap Analysis or Mock Audit?

The goal is to test both your staff’s reaction to the exercise, as well as their understanding of what may be expected in a real audit. Moreover, the documentation analysis may be invaluable, revealing weak points in the facility’s documentation activities.  You may also learn that some of your forms (such as your Encounter Form) are defective. Finally, you will likely learn more about the various training needs of your staff.  A mock audit may also ferret out problems that management didn’t know or didn’t realize existed.  You may learn that a business arrangement or relationship is questionable or that your staff has been relying on the wrong LCD or other guidance when documenting and billing for services.  Fundamental problems such as illegibility and missing signatures may also be identified.  In any event, the results of a mock audit can be used by the practice to bolster and support its compliance initiatives.

IV.     Sound Like a Good Idea?  So, what’s the First Step?

Sound like a good idea?  Before you embark on a mock audit, you should contact your attorney and discuss any privilege issues which may exist.  As a final point, keep in mind that should you identify an overpayment, it must be returned to the government within 60 days of identification and reconciliation.  Otherwise, the overpayment could constitute a violation of the False Claims Act.

Healthcare AttorneyRobert W. Liles, Esq., serves as Managing Partner at Liles Parker, Attorneys & Counselors at Law.  Robert and other attorneys at Liles Parker are experienced at conducting “gap analyses” and “mock audits” of physician practices, home health agencies, hospice agencies and other non-hospital provider entities.  Should you have any questions about conducting a mock audit or would like to learn more about having Liles Parker attorneys assist your practice, please call us for a free consultation.  Robert can be reached at:  1 (800) 475-1906.

Areas of Practice

September 19, 2018 by  
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Health Care Law

Liles Parker attorneys have the litigation experience, health care regulatory knowledge, and counseling skills necessary to efficiently resolve health care issues at the lowest possible level, before they escalate into a more significant problem

Dental Law

Liles Parker attorneys have the vast litigation experience, and counseling skills to effectively address dental law issues. We regularly represent dental practices in relation to coding and billing issues; dental compliance matters; Federal, state, and/or private payor audits and reviews; OHSA requirements and training; and State Board of Dental Examiner Investigations.

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False Claims Act

One of the government’s most powerful enforcement tools, the False Claims Act (FCA), is primarily targeted at health care providers. In fact, over 80% of the recoveries derived by the FCA are from the health care industry. Liles Parker has the knowledge and talent to effectively represent you in a matter involved the FCA. Call today for a free consultation.

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Regulatory Compliance Issues and Guidance

January 26, 2021 by  
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Regulatory Compliance is Essential for Your Practice to Stay Out of Trouble!In July 1965, President Lyndon Johnson signed legislation enacting Medicare and Medicaid into law.[1] In doing so, he ushered in a new era of Federal health benefits, the size and corresponding expense of which never could have been anticipated at the time of passage. Over the last fifty years, the various laws, regulations and policies governing the Medicare program have become extraordinarily complex. Today, regulatory compliance is more important than ever.

In March 2010, Congress passed comprehensive health care reform measures intended to make health care more accessible, address a wide variety of insurance company practices, improve the quality of care provided and reduce the likelihood of health care fraud, waste and abuse. [2] Referred to as the Affordable Care Act (ACA), these provisions represent the most sweeping health care coverage legislation since the original passage of Medicare and Medicaid, nearly 50 years ago.  Today, the coverage and payment rules associated with Medicare, Medicaid and other government health plans are extraordinarily complex.  These changes have made regulatory compliance even more challenging.  Need help?  Liles Parker attorneys are well-situated to guide you and your health care practice through the ever-changing regulatory mandates affecting your company. 

Regulatory Compliance Issues Handled by Liles Parker Attorneys:

Eight Elements of a Payable Claim

“Gap” Analyses of Health Care Practices

Compliance Program Development and Implementation

Compliance Training for Clinical and Administrative Staff

“Mock” Audits of Claims and Services

Business Practice Analysis and Issuance of Formal Opinion Letters

Independent Review Organization (IRO) Services


NATIONWIDE REPRESENTATION   Call: 1 (800) 475-1906.

Liles Parker attorneys have decades of health law regulatory compliance experience.  We understand your business.  Our health lawyers have undertaken additional training and education to obtain recognition as  Certified Professional Coders (CPCs), Certified Medical Reimbursement Specialists (CMRSs) and / or Certified Medical Compliance Officers (CMCOs).   Do you need health law assistance and advice?  Please call us for a free consultation:  1 (800) 475-1906.

[1] Medicare and Medicaid were passed as part of Titles XVIII and XIX of the Social Security Act.

[2] The Patient Protection and Affordable Care Act (Pub. L. 111-148) was enacted on March 23, 2010. It was subsequently amended by the Health Care and Education Reconciliation Act of 2010. These two pieces of legislation, collectively referred to as the “Affordable Care Act,” constitute the most sweeping change to our health care system in decades.

Regulatory & Compliance Related Services

December 9, 2020 by  
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The OIG Identifies Substantial SNF Medicare Overpayments

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OIG has Identified significant SNF Medicare overpayments.(November 18, 2012): A recent report issued by the Department of Health and Human Services, Office of Inspector General (OIG), OEI-02-09-00200 (Report),  found substantial errors in payments made by Medicare to skilled nursing facilities (SNFs) for FY 2009.  The Report also found substantial errors in SNF reporting on the Minimum Data Set (MDS) forms.  Specifically, the OIG found that 25% of the claims reviewed were paid in error.  Of these claims, HHS-OIG found that 20% were the result of upcoded RUGs, 2.5% were the result of downcoded RUGs, and approximately 2% of the claims did not meet coverage requirements.  According to the OIG’s Report, this was projected to account for $1.5 billion in improper payments, or 5.6% of all Medicare payments to SNFs in that year.

OIG found that approximately 50% of the allegedly upcoded claims involved billing at the ultrahigh therapy RUG level.  For 57% of these claims, HHS-OIG found that SNFs reported providing more therapy on the MDS than was indicated in the medical record, while it found that 25% of these claims involved facilities providing more therapy than was appropriate for the resident’s/patient’s condition.

Additionally, the Report found that 47% of the claims had errors on the MDS.  30% of these claims involved misreporting the amount of therapy.  Reviewers also found instances where SNFs provided more therapy during the look-back period than other periods.  The Report also concluded that 17% of the alleged misreporting of information on the MDS involved special care, with most of those claims involving intravenous medication.  Finally, 7% of the claims involved findings of misreporting of Activities of Daily Living (“ADLs”).

I.  Recommendations by the OIG to Address SNF Medicare Overpayments:

Based on the findings, the OIG recommended that CMS take the following actions:

  • Instruct its contractors to increase the amount of medical reviews of SNF claims;
  • Increase the use of its Fraud Prevention System to identify SNFs that are billing at high paying RUGs, with specific emphasis on claims for ultrahigh therapy and high ADL levels;
  • Instruct MACs and RACs to monitor closely the use of “end of therapy” and “change of therapy” assessments through analyses of claims data;
  • Change how Medicare pays for therapy;
  • Instruct surveyors to focus more heavily on monitoring the accuracy of the MDS’; and
  • Follow up on SNFs that had errors in the sample.

CMS agreed with each of these findings.

II.  What SNF Providers Should Expect and What Actions Should They Take:

SNF providers have already seen a significant increase in the scrutiny and denial of claims by MACs, RACs, and ZPICs.  This has been especially significant for SNFs that have significant sub-acute programs, and that therefore have a disproportionate number of ultrahigh RUG cases. SNFs can expect increased scrutiny in this area, as well as an increasing number of in-person visits by ZPIC auditors.  Additionally, facilities can expect increased emphasis on the accuracy of their MDS’s from state surveys and federal look behind surveys.

SNFs should ensure that their compliance programs monitor the accuracy of claims and MDS’s through periodic audits in order to identify and catch potential issues early on, and take corrective action where they find issues.  As part of this activity, they should re-emphasize the importance of ensuring that the medical records are complete and support the care that is claimed.  Additionally, mock surveys should pay particular attention to the accuracy of MDS’s.  While we all know that therapists, nurses, and aides are tremendously busy simply providing care, the documentation must support that care.

We have all heard the saying, “if it wasn’t documented, it wasn’t done.”  That statement will take on increased importance as a result of OIG’s report.

SNFs should also be prepared to act quickly in the face of post-payment audits.  Facilities can delay recoupment by identifying and filing appeals of denials with which they disagree within specified time limits for the first two levels of review – redetermination and reconsideration.  It is also critical that they utilize counsel who are experienced in the area, and where statistical extrapolations are utilized, that they challenge the extrapolation where they suspect errors. Finally, there may be a number of legal arguments, including certain waivers under the Social Security Act, that counsel may raise. Likewise, staff should be trained in survey management and the conduct of IDRs.

Finally, facilities should ensure that their employees understand how to address instances where reviewers such as ZPIC auditors make in-person visits.  SNFs have seen an “uptick” in ZPIC auditors coming to their facilities – this activity is only likely to increase as a result of OIG’s Report and tremendous budget pressures on the federal government.

Liles Parker attorneys have substantial experience in handling Medicare and Medicaid post payment denials in audits, compliance plans and issues, and survey management.

Healthcare LawyerAnyone seeking more information or having a problem in this area should contact Michael Cook at (202) 298-8750.  Michael has more than 30 years’ experience in representing SNFs and also served at the beginning of his career as an attorney with the federal regulators of the Medicare and Medicaid programs.

100 Involved in Health Care Fraud Arrests

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Update (May 3): In total, 107 individuals were charged yesterday in connection with a health care fraud scheme comprising $452 million in false billing. 91 of the accused have been arrested and are in custody.

Health Care Fraud Arrests

(May 2, 2012): News outlets are reporting that approximately 100 people have been arrested and charged with one or more health care fraud schemes involving false billings to Medicare, Medicaid, and other federal health care programs. These health care fraud schemes allegedly resulted in approximately $450 million in fraudulent billings, one of, if not the largest, such busts in the history of federal health care programs. The report goes on to state that arrests were made in seven major metropolitan areas as a  result of an investigation over several months into these issues. CBS is reporting that over 50 of the individuals arrested were in Miami, Florida. Other arrests were made in Los Angeles, Houston, Detroit, Chicago, Tampa Bay, and Baton Rouge. In Baton Rouge, authorities are saying that these arrests were not just the result of several months of investigation, but a capped a six year long process to uncover fraudulent activities. Many of those arrested were allegedly involved in schemes related to the provision of mental health services or home health services.

I. Law Abiding Providers Should Take Note:

Health care providers in the cities where these health care fraud busts occurred should be wary. While HHS-OIG and DOJ have allegedly rooted out criminals from the Medicare program, these events cast a bad light on all providers in these regions. It has been our observation that after a large health care fraud bust such as this, the Zone Program Integrity Contractor (ZPIC) or Recovery Audit Contractor (RAC) for each region enhances their auditing efforts of similar providers. The ZPICs in these regions include SafeGuard Services (Los Angeles, Miami and Tampa), AdvanceMed Corporation (Baton Rouge) and Health Integrity (Houston). All of the ZPICs are capable, aggressive, and will critically audit a provider’s claims for both technical deficiencies and lack of medical necessity issues.

II.  It is Essential That You Develop and Implement an Effective Compliance Program:

Despite the federal government taking health care fraud wrongdoers off of the streets, ZPICs and RACs will likely step up enforcement efforts for other providers. It is therefore imperative that you establish and follow an effective compliance plan in your practice or facility as soon as possible. You should conduct a gap analysis to review your documentation practices, business operations, and relationships with referral sources, suppliers, and other providers. These issues are too important at this point to ignore. Moreover, if you have received a letter from a ZPIC or RAC, it is not something to fool around with or ignore. These entities will often review a sample of claims, deny many or all of those claims, and then extrapolate those findings onto a one or two year universe. This results in alleged overpayments to providers, sometimes in the millions of dollars. If you have received one of these letters, call us today to learn more about the process and your rights and responsibilities.

Liles Parker is a full-service law firm with offices in Washington, DC, Baton Rouge, Houston, and San Antonio. We provide nationwide representation of health care providers in a variety of administrative and other matters, including administrative appeals of ZPIC, RAC, MAC, MIC and Medicaid RAC overpayment determinations. In addition, we provide compliance plan drafting and implementation, compliance training for office staff, and mock audits. For more information, call us today at 1 (800) 475-1906 for a free consultation.

OMHA Changes ALJ Hearing Case System

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(March 2, 2012):  Likely recognizing the enormous disparity in Administrative Law Judge (ALJ) hearing workloads for its various Field Offices, the Office of Medicare Hearings and Appeals (OMHA) recently switched to a Central Docketing System for all pending and new appeals. Under this new system, all ALJ hearing requests will be sent to OMHA’s Central Office in Cleveland, OH. Each ALJ appeal will subsequently be assigned to one of the Field Offices – Irvine,  CA, Miami, FL or Arlington, VA – or to ALJs in the Central Office. Despite assigning appeals to different offices, OMHA is not breaking these appeals into their component parts – individual claims –  so “big box” cases will still be handled during one ALJ hearing.

OMHA While each appeal will likely be assigned to an office randomly, OMHA will likely base these assignments on current workloads at each of its offices. Therefore, a provider in Texas, Oklahoma  or Louisiana, who would previously have always gone before an ALJ in the Miami Field Office, may end up at an ALJ hearing in any of OMHA’s four offices. While this may be disconcerting at first, the typical ALJ hearing is conducted by phone or video-teleconference nowadays, meaning that the ALJ’s location doesn’t substantially affect how a case is handled. While it may be more difficult to ascertain the procedural habits of a single ALJ (such as in what order to present information or how formal each ALJ hearing session is), an experienced health lawyer will still be able to ably represent your interests since appeals and hearings are generally handled in the same fashion,

In any event, regardless of whether the assigned ALJ is in Cleveland, OH, Arlington, VA, or in one of the other Field Offices, you should seriously consider retaining qualified legal counsel.  In recent years, representatives of the Zone Program Integrity Contractor (ZPIC), the Medicare Administrative Contractor (MAC) and / or the Qualified Independent Contractor (QIC) are frequently choosing to participate in ALJ hearings, arguing why the claims at issue should not be paid (and effectively supporting the results of their earlier ZPIC audit).  Although the proceeding is technically “non-adversarial,” ALJ hearings can become quite contentious.  An experienced lawyer can assist you in understanding the process so that you may more effectively present your arguments in support of payment.  As new rules and administrative guidance comes out regarding the Medicare post-payment audit appeals process, check back with us for more information.

Healthcare LawyerLiles Parker is a full service health law firm with several offices around the country. Representing providers in all stages of Medicare post-payment appeals, including ALJ hearings, our attorneys are well-versed in the administrative appeals process and capable of aggressively handling your case. In addition, we conduct compliance program advising and implementation, as well as mock audits, staff training and health care business transactions. Please call Robert W. Liles at 1 (800) 475-1906 for a complimentary consultation today.

Georgia Prepayment Reviews are Being Conducted by AdvanceMed

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Georgia Prepayment Reviews are Being Conducted by AdvanceMed

(February 29, 2012): In the past few weeks, AdvanceMed Corporation, the Zone Program Integrity Contractor (ZPIC) for Regions II and V (covering the Northwestern and Southeastern portions of the United States, respectively), appears to have significantly expanded the number of Georgia prepayment reviews it is conducting.  More specifically, AdvanceMed appears to be focusing on hospices, psychiatric services and pain management, practice areas where problems has been identified by the government in the past.  From calls we have received, it does not appear that only metropolitan area providers are under scrutiny.  Rather, Georgia prepayment reviews appear to be occurring throughout the entirety of the State.  To be clear, the government’s increasing use of prepayment review is not surprising — it is consistent with their overall efforts to prevent improper coding and billing practices from occurring in the first place.  The Centers for Medicare & Medicaid Services (CMS) are understandably frustrated with old, tired enforcement tactics which relied on “Pay and Chase” strategies.

I.  As Georgia Prepayment Reviews Move Forward, What Steps Can You Take to Avoid this Initiative?

In most cases, health care providers are targeted and placed on prepayment review because of:  (1) data mining has identified the provider as an “outlier,” or (2) a complaint has been filed against the provider.  The best preventative measure you can take is to design and implement an effective Compliance Plan.  As a first step, you should conduct a “GAP Analysis” to determine whether your operations, coding and billing practices fully meet applicable laws, regulations and guidelines.  If not, remedial action must be taken to put the organization back on the right path.  During this process, you will likely learn how your coding and billing practices compare to those of your peers.  Should you find that your practices result in the organization appearing to be an “outlier,” it is essential that you determine how and why your practices differ from those of similarly situated providers.  You may or may not be doing wrong.  If you are handling claims incorrectly, fix them and return any monies owed to the contractor.  If you believe that your practices are compliant, that’s fine — but you better be prepared to respond to an audit.

II.  Don’t Wait to be Audited – Review Your Practices Now!

Notably, when AdvanceMed places a health care provider on prepayment review, the claims being scrutinized are likely associated with services performed in the last week or two.  This means that providers currently have the opportunity to assess and potentially correct their documentation practices if deficiencies are identified. We recommend that all Georgia providers examine their medical records and critically determine whether they actually meet the relevant criteria for reimbursement.  Pull applicable Local Coverage Determination (LCD) rules and carefully review the medical necessity, coverage and documentation requirements set out in the contractor’s guidance.  Are your documentation, coding and billing practices compliant?

III.  How Should a Georgia Provider Respond if They Have Already Been Placed on Prepayment Review?

The prepayment review process can be long, complex and challenging.  Moreover, the lack of a quick payment turnaround can be devastating on a small practice’s cash flow, and similarly inhibit larger entities from effectively navigating the revenue cycle. This problem is only exacerbated by the fact that AdvanceMed, as a ZPIC, is not obligated to return a decision on prepayment review claims to a provider within a specified time frame. Unlike Medicare Administrative Contractors (MACs), who, according to the Medicare Program Integrity Manual  (PIM) Chapter 3, Section F, must make and issue a decision within 60 days of receiving a medical record for prepayment review, ZPICs are not under the same duty to quickly make decisions on claims. The PIM is entirely silent on what the time frame is for ZPICs to conduct prepayment review and issue notification to the concerned provider. This may result in ZPICs, such as AdvanceMed, taking an inordinate amount of time to complete their prepayment review of your claims.

During this ongoing effort by AdvanceMed, Georgia providers should expect that prepayment review will take 90 – 180 days on average from when AdvanceMed receives the relevant medical records. Moreover, based on average denial rates we have seen in the past, providers should expect that 60 – 75 percent of their claims may be denied by AdvanceMed (although it is not uncommon for us to see denial rates at or approaching 100 percent). Upon denial of these claims, providers then have the right to take these claims through the Medicare administrative appeals process. As some of you may know, this is also a long process which usually culminates in a hearing before an Administrative Law Judge (ALJ). Regardless of your experience in this area, it is important to remember that qualified counsel can greatly assist you in developing and presenting arguments and evidence to the ALJ, as well as ensuring that all supporting documentation is included in the medical record. As AdvanceMed continues its prepayment review initiative in Georgia (and possibly expands this effort into surrounding states), providers should take a second look at their documentation and make sure it passes muster. The time to do this is now, not when AdvanceMed is knocking at your door.

Healthcare LawyerLiles Parker is a full service law firm with attorneys experienced in representing providers in Medicare postpayment audits and counseling providers on prepayment review strategy. Moreover, our firm is skilled at conducting mock audits, compliance reviews and internal audits and investigations to ensure compliance with applicable laws and regulations. For a free  consultation about your case, please feel free to call us at 1 (800) 475-1906.