What Happens When You Receive an ADR from a CMS Auditor?

If you have received an additional documentation request (ADR) from your CMS auditor (i.e., a MAC, RAC, UPIC, or SMRC), you might be wondering what happens next. At this stage, the short answer is, “It’s up to you.”

If you respond to the ADR letter and provide documentation to support Medicare billing compliance, this should be all it takes to resolve the inquiry and move on. However, if you don’t provide all necessary documentation, if you can’t provide all necessary documentation, or if you simply ignore the ADR, you could face serious additional consequences.

So, what should you do?

Responding to an ADR requires an informed and cautious approach. When responding to ADRs, healthcare providers need to be confident that their CMS ADR response is mitigating their risk rather than increasing their risk of facing additional scrutiny. In many cases, the issuance of an ADR can be a precursor to a comprehensive Medicare audit contractor review, and these medical reviews can lead to payment denials, recoupments, and other penalties.

Responding to an ADR from a CMS Auditor: 3 Possible Scenarios

To see what can happen when you receive an ADR from a CMS auditor, let’s look at three possible scenarios:

1. You Timely Submit Additional Documentation that Confirms Medicare Compliance

We’ll look at the best-case scenario first. Let’s say you received a CMS ADR; and, upon reviewing your business’s or practice’s Medicare billing records, you determine that these records substantiate the billings identified in the ADR. You submit the relevant records to your CMS auditor in a timely manner, being careful to only provide the records that are necessary.

In this scenario, your response to the ADR should be the end of the inquiry. If you are able to affirmatively demonstrate Medicare billing compliance upon request, you should not be at risk of facing additional consequences.

2. You Fail to Submit (or Choose Not to Submit) a Timely Response

Now, let’s look at the opposite end of the spectrum. Rather than submitting a timely and complete response that confirms Medicare billing compliance, you choose to ignore the ADR. Maybe you don’t have time to deal with it, or maybe you assume that the auditor won’t follow up if you ignore it.

This can prove to be a very costly mistake. Under the Medicare billing regulations, if a Medicare-participating provider fails to respond to an ADR, the auditor that issued the ADR has the authority to either deny the Medicare claims in question (in the case of a prepayment review) or seek recoupments for the claims in question (in the case of a post-payment review). From the auditor’s perspective, failing to respond to an ADR is likely to raise additional compliance concerns as well. As a result, not only could you face immediate financial consequences as a result of failing to respond to the ADR, but you could face additional scrutiny (and additional consequences) as well.

3. Your Response Raises Additional Concerns About Non-Compliance

The third possibility is that you submit a timely response to your ADR, but your response raises additional concerns about non-compliance. This could be the case if:

• Your response to the ADR is incomplete; 
• The documents you submit confirm the prior submission of non-compliant billings; or, 
• The documents you submit are unclear or inconclusive.

Here too, you can expect to face additional scrutiny from the Medicare auditor that issued the ADR. CMS’s Medicare contractors are tasked with uncovering billing fraud and holding participating providers accountable when they submit “fraudulent” reimbursement requests to Medicare (in this context, “fraudulent” billings can be either intentional or inadvertent). As a result, if a provider’s response to an ADR raises additional compliance concerns, additional scrutiny (potentially in the form of an invasive Medicare audit) could be forthcoming.

Mitigating Risk When Responding to a CMS ADR

With these potential outcomes in mind, how can (and should) you mitigate your business’s or practice’s risk when responding to a CMS ADR?

As with all Medicare compliance matters, responding appropriately to a CMS ADR requires a clear understanding of your business’s or practice’s obligations and risks. With this in mind, the preliminary steps involved in responding to an ADR should generally include:

• Carefully Review the ADR in Detail – The first step is to carefully review the ADR letter in detail. In particular, you should make sure that you know: (i) which of your business’s or practice’s Medicare billings are under review; (ii) what documents are being requested; (iii) when you need to respond; and, (iv) how you need to submit the documents requested by your MAC, RAC, UPIC, or SMRC. 
• Locate and Preserve All Relevant Medicare Billing Records – Once you know what documents the auditor is requesting, the next step is to locate and preserve the relevant medical record documentation. You should work quickly to identify all relevant Medicare billing records, and then you should take the necessary steps to ensure that they are not deleted or destroyed inadvertently or as a matter of course. 
• Conduct a Medicare Billing Compliance Assessment – When facing scrutiny from a Medicare audit contractor, it is imperative to have a clear understanding of the current state of your business’s or practice’s Medicare billing compliance. With this in mind, after locating and preserving all relevant Medicare billing records, you should conduct a compliance assessment to determine the level of risk involved in responding to the ADR. 
• Determine if You Have Grounds to Challenge the ADR – In parallel with taking the steps necessary to submit a timely response to your ADR, you should determine if you have grounds to challenge the ADR as well. CMS contractors can (and do) overreach; and, if you are not legally required to provide the documents requested, then challenging the ADR might be your best option. 
• Communicate with the CMS Auditor as Warranted – With that said, in many cases, the best option will be to communicate proactively with your CMS auditor regarding any questions or concerns. While not always the case, a proactive and cooperative approach will often help facilitate a favorable and (relatively) efficient process and resolution. Along with providing assistance with the other steps discussed above, experienced Medicare compliance counsel should be able to assist with deciding whether to engage with your Medicare auditor; and, if engaging makes sense, your counsel should be able to engage effectively on your behalf. 

Once you have taken these preliminary steps, then responding to your ADR from a CMS auditor should generally involve:

• Prepare to Submit Responsive Documents in Compliance with the ADR – Depending on the scope of the ADR, assembling the responsive documents and preparing to submit them in accordance with the requirements outlined in the request could be an onerous process. With this in mind, it is important to begin this process as soon as possible. This is true even if you plan to challenge the ADR or attempt to work out a resolution with your MAC, RAC, UPIC, or SMRC. 
• Make Informed Decisions About How to Address Any Documents of Concern – If any of the Medicare billing records requested in the ADR raise concerns about non-compliance, you will need to make informed decisions about how to address these documents prior to submission. While providers cannot simply withhold documents they don’t wish to disclose, providing documents that clearly demonstrate non-compliance can also be very risky. 
• Respond to the ADR (One Way or Another) Before the Deadline – Regardless of how you choose to respond to the ADR, you should submit a response before the deadline. If you intend to attempt to work out a resolution that does not involve full compliance with the ADR, you should begin this process (with the advice and representation of your Medicare compliance counsel) promptly. 
• Prepare for the Possibility of Facing Additional Scrutiny (if Warranted) – If your business or practice is not in full compliance with the Medicare billing rules and regulations, you may need to prepare for the possibility of facing additional scrutiny. If this is the case, relying on the advice and representation of your Medicare compliance counsel will be essential here as well. 
• Update Your Practice’s Medicare Billing Compliance Program (if Necessary) – Finally, if any compliance failures reflect deficiencies in your business’s or practice’s Medicare billing policies, you should work with your counsel to update the program as necessary to ensure compliance. Depending on the circumstances, this may involve bringing your compliance program up to date with the current Medicare billing rules and regulations, overhauling your internal billing procedures, or a variety of other steps. 

To be clear, these are not all of the steps involved in responding effectively to an ADR from a CMS auditor, and different circumstances call for different approaches. Ultimately, you will need to make informed decisions based on the specific circumstances at hand, and this means that you will need to engage experienced Medicare compliance counsel promptly.

Speak with a Medicare Compliance Lawyer at Oberheiden P.C.

Have you received an additional document request (ADR) from a MAC, RAC, UPIC, or SMRC? If so, we invite you to get in touch. To speak with a Medicare compliance lawyer at Oberheiden P.C. in confidence, please call 888-680-1745 or request a complimentary consultation online today.