According to a March 15 Physicians Practice article by Philippa Kennealy, MD and Philip Garrett Panitz, Esq., the Internal Revenue Service (IRS)’s audit enforcement is increasing among physicians based on the perception they make easy targets as a result of poor record-keeping practices.
“Most physicians in medical practice have received some training in reducing their malpractice risk, but little or nothing is taught about how to minimize the risk or impact of a tax audit on your psyche and your practice, the article states.
There are ways for emergency physicians to reduce audit risks in their group practices, among them being your Emergency Medicine coding, billing and collections process. Is it in the right hands? In today’s volatile healthcare landscape, experts who have the experience and understand all the nuances and intricacies of Emergency Medicine revenue cycle management are unquestionably the better choice.
It goes without saying that how your revenue cycle management operates is directly related to your chances of being audited. Placing your Emergency Medicine revenue cycle management in the hands of experts in Emergency Medicine medical coding, billing and collections is among the most important business decisions you will make. Not only do industry specialists, such as revMD.com, manage all documentation, claims and compliance, they understand medical billing nuances and Emergency Medicine physician groups’ unique needs that virtually eliminate documentation errors.
The following are steps your practice can take to reduce your chances of an audit (as reported in Physicians Practice)
Tax Planning
Recently, many physicians have received letters from the IRS informing them that they are being audited. This notification is frequently accompanied by a laundry list of document requests that goes on for three pages. After overcoming the initial stage of panic, most physicians go to their CPA, who assists them in putting together the documentation requested.
Some potential audit issues can be avoided with more dialogue between the CPA and the physician during the initial return preparation stage. Many CPAs unfortunately take information from their doctor clients and put it on a tax return without enough “questioning.” CPAs frequently complain that physicians do not make the time to meet and thoroughly discuss the material provided, or that the physician has dumped all their records on the CPA just before tax filing is due. “Being too busy” is sometimes just a disguised excuse for procrastination.
Red Flags for Tax Audits
One of the areas that the IRS is focusing on is deductions related to business travel for physicians. It is the belief of the IRS that doctors routinely over-deduct for education-related travel; staying at hotels that are beyond the level and price point of the hotel where a seminar is provided is just one example.
Another hot button item is the notorious lack of doctors’ record keeping, resulting in office expense estimating (“guesstimating” as the IRS would call it). A good business manager who works hand-in-hand with physicians can assist in this initial organization phase and nip that problem in the bud.
If an audit is not going well, the CPA will typically recommend bringing in a tax attorney to interface with the IRS. Tax attorneys litigate cases with the IRS in the United States Tax Court, and typically can obtain settlements with the IRS that may save the physician a tremendous amount of money. However, the authors are of the opinion that the entire audit can be avoided or handled very smoothly without any repercussions if the physician had taken some preliminary steps.
Now is it only the IRS that can come knocking. One of the authors’ clients, a busy family physician with both a private practice and a large nursing home practice, was confronted several years ago with the prospect of a Medicare audit evaluating potential over-coding. This soul-destroying experience involved hundreds of hours of copying and submitting medical records, hiring both an attorney and a coding expert to help defend her case, and a lingering terror of coding too high, such that her resultant under-coding was costing her practice thousands of dollars. She was a good doctor, she was a good person, yet she was a disorganized, stretched-too-thin and ill-prepared business owner. Sound familiar?
IRS Examining Improper Medicare Payments
In 2010, President Obama set three goals for reducing improper Medicare payments, to be achieved by this year:
1. Reduce overall payment errors by $50 billion
2. Cut the Medicare fee-for-service error rate in half
3. Recover $2 billion in improper payments
To begin achieving these goals, CMS focused particularly on number three: improper payments. It’s important to recognize that while all falsified claims are improper payments, not all improper payments are falsified claims. In fact, most are due to ignorance — errors in documentation and not intentional fraud.
Rarely has there been a time more important than now for the unique nature of Emergency’s Medicine’s medical coding and billing to be managed with special expertise. It’s an exacting science that requires in-depth, insider industry expertise of the myriad of new Emergency Medicine revenue cycle management regulations that only an independent third party Emergency Medicine medical coding, billing and compliance specialist with decades of expertise can provide to ensure nothing falls through the cracks and revenues are optimized.
revMD.com is the clear alternative in Emergency Medicine revenue cycle management because we stay abreast of changing Emergency Medicine coding and collections regulations. revMD excels in practice-based Emergency Medicine revenue cycle management because our response time and real time reporting mechanisms offer the same convenience as a billing and collections department “down the hall” with in-house levels of control.
revMD.com offers superior results in Emergency Medicine medical coding, billing and collections for splint/cast applications, bedside ultrasounds, critical care in the ED and critical care procedures, and observation status in the ED. For many years, we’ve successfully managed both non-physician and supervising physician billing Emergency Medicine’s revenue cycle management.
revMD.com is the results-proven alternative for healthcare revenue cycle management, with a niche specialization in Emergency Medicine medical coding and billing that generates unprecedented results and builds profitable medical practices. Leveraging a history of industry wide success spanning 25 years, revMD.com partners with medical practices throughout the U.S. to optimize revenue for hospital based and practice based physicians. For more information, visit www.revmd.com.