Pre-payment and Post-payment Audits

The American Academy of Family Physicians (AAFP) believes indiscriminate use of pre-payment and post-payment audits is a significant business disruption and administrative burden for the physician office and creates an inappropriate culture of mistrust. Many audits are promulgated by health plans that compare physicians to peers. The notion a primary care physician’s billing practices can be adequately “compared” to those of their peers presumes patient panels are similar and all nuances of a patient visit can be accounted for during the visit. However, patient panels can vary due to multiple factors, including, but not limited to, geographic region, age, sex, income, education level, physical environment, mental health, etc. Further, the complexity of care, scope, and breadth of care involved in primary care visits is difficult to measure, much less compare across physicians.

If a physician’s office is subjected to pre-payment or post-payment audits, those audits should align with the following principles:

1. Pre-payment and post-payment audits should be infrequent, highly selective, supported by analysis showing definite abuse of the code in question, and demonstrate clear reasoning why the problem cannot be addressed by less onerous mechanisms.
2. The AAFP recommends focused medical review of outliers (based on reviews of patterns of services, using an independent medical peer review process, where physicians practicing in the same specialty review their peers) as preferable to broad pre-payment or post-payment audits.
3. Health plans should send physician practices written communication when the practices are identified as an outlier, including a description of the data used and the reasons why.
4. Health plans should provide network physicians and their practice managers with visibility into, and an understanding of the health plan’s audit criteria.
5. If a health plan downcodes an evaluation and management service, there should be a remark code and clear communication on the remittance advice indicating such, and the health plan should send notification to the physician’s practice.  
6. Health plans should equip physicians with a clear understanding of the changes or improvements necessary to no longer be considered an outlier.
7. Health plans should provide physicians with an easy-to-use appeals process, make determinations on appeals in a timely manner, and communication appeals determinations in writing.
8. Health plans should provide access to certified billing and coding experts on staff whom practices can contact directly with questions about the health plan’s determination on a claim, reasons for denial, etc.
9. Health plans should only request documentation for visits that will be reviewed.

 (2014 COD) (September 2024 COD)