Behavioral healthcare providers need to tighten clinical documentation for new RADV audits

Behavior health providers doing business with Medicare Advantage need to shore up their clinical documentation with greater diagnosis specificity and accurate documentation as they face a new type of audit.

The Centers for Medicare and Medicaid Services (CMS) finalized the new Risk-Adjusted Data Validation Audit in a final rule issued in January, 2023.  

Any time a healthcare provider does business with Medicare as the payer, the organization’s medical and billing records are subject to many types of audits by many different Medicare contractors. They’re all looking for the same thing: improper payments, fraud, waste, abuse, and program integrity violations.

The new Risk-Adjusted Data Validation (RADV) Audit is no different. It is the way CMS looks for improper payments and overpayments to Medicare Advantage Organizations (MAOs.)

Providers offering mental health services, substance abuse treatment, and other types of behavioral healthcare are subject to the new audit because Medicare is embracing behavioral health, covering a range of mental health and substance abuse disorders. Many Medicare Advantage plans now offer enhanced coverage of mental health services.

How the RADV audit works

CMS pays Medicare Advantage Organizations (MAOs) a monthly amount for each beneficiary enrolled in an MA plan. Then it uses medical records and diagnoses to determine how much providers should have been paid. A payment adjustment is made for the difference.

RADV audits are conducted after the final risk adjustment data submission deadline for the MA contract year.

This type of audit specifically looks to recoup overpayments from providers whose medical records do not support the medical diagnoses submitted for risk adjustment payment.

During the audit, CMS reviews the medical records of MAO enrollees to confirm the diagnosis codes submitted by the plans for risk adjustment purposes.  The goal is to ensure the integrity and accuracy of risk-adjusted payment by verifying the diagnosis codes submitted for payment.

This means an RADV audit is going to look very closely at your organization’s clinical documentation.

There are six stages in the RADV audit process:

Stage 1: Sampling and medical record request

Stage 2: Medical record review (MRR)

Stage 3: MRR findings and contract-level payment adjustments

Stage 4: Documentation dispute

Stage 5: Post documentation dispute payment adjustments

Stage 6: Appeals

Shore up clinical documentation

Medical records examined during the audit usually include physician’s orders, patient history, consultation reports, progress notes, discharge summary, and other pertinent medical information.  

The audit will look closely at the primary diagnosis reported, as well as diagnosis codes for conditions and comorbidities that may impact treatment.

In addition, historical codes may be needed to report any conditions affecting current care or treatment.

Getting the coding right is essential. Accurate and specific ICD-10 coding that meets all current coding conventions will be necessary, and some physicians or other practitioners may need to understand how the nuances of ICD-10 coding can greatly impact payment. Many diagnosis codes are not specific enough to be accepted by Medicare.

In addition to accurate coding and diagnoses, an important piece of the medical record is the face-to-face encounter. CMS has stringent demands for documentation of the face-to-face. Omissions such as a missing date of service, physician signature, or missing credentials can invalidate it.  

SimiTree can help

If your behavioral health practice is targeted for an audit of any kind, by the government or commercial insurance, SimiTree has the full resources and expertise to help with any part of the process, including appeals. 

But we recommend proactive action before an audit occurs. Our certified team of healthcare compliance experts is made up of former auditors and surveyors who fully understand Medicare’s review methodology. We have experience across all healthcare settings and we’ll help you implement safeguards to mitigate risk.

We carefully review clinical documentation and billing practices to identify any gaps in care or coding, and work with you to implement processes, procedures, and policies for full compliance.

Reach out to us today to insulate your organization against audit vulnerabilities.

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What providers need to know about the new HIPAA Risk Analysis.  

J’non Griffin serves as Senior Vice President for the Compliance as well as Coding divisions at SimiTree. With a healthcare career that spans three decades, she has a track record of helping many provider types implement effective compliance programs. She has worked with organizations nationwide  to develop compliant emergency preparedness and operation plans, implement fully compliant plans of care ,and meet regulatory demands. As an AHIMA ambassador, Griffin was instrumental in preparing the coding community for the launch of ICD-10.