Doctors wary of Medicare audit plan's incentives

The AMA says it will work with state medical associations to make sure the Medicare pilot program is fair.

By David Glendinning, AMNews staff. April 4, 2005.

Washington -- Physicians in three states are worried that a new type of Medicare audit will amount to a federally sanctioned form of "bounty hunting."

Starting in May, the Centers for Medicare & Medicaid Services will hire recovery audit contractors to scour Medicare claims in California, Florida and New York to make sure the government is paying appropriately for services. Although the participating firms will be responsible for finding both overpayments and underpayments, the contractors will be paid based only on how much overpayment they recoup from physicians and others.

If the pilot program is successful, it might be expanded to other states.

The project's setup is sure to produce questionable audits of Medicare claims in cases in which the judgment of whether an overpayment has taken place could go either way, said Troy Tippett, MD, a neurosurgeon in Pensacola, Fla., and president-elect of the Florida Medical Assn.

"There is no question when you pay someone to find something and you're not going to pay them if they don't find anything, those borderline claims will more likely go into the error category," Dr. Tippett said.

The American Medical Association plans to stay vigilant in making sure that the physician community is not persecuted by auditing companies intent on maximizing their profits.

"Due to overzealous audits of physicians' Medicare claims in the past, the AMA is devoting substantial resources to ensure that the Medicare demonstration project is implemented fairly and properly, with adequate safeguards," said AMA Chair J. James Rohack, MD. "CMS has agreed to meet with the AMA and state medical societies of California, New York and Florida to ensure that the program moves forward in a balanced manner."