Brian Hickman

While many health care providers are aware of Medicare’s Recovery Audit Contractor (RAC) program, few have been preparing for the Medicaid Integrity Program (MIP) to be audited by independent Medicaid Integrity Contractors (MICs). The Deficit Reduction Act of 2005 (DRA) created the MIP and directed the Centers for Medicare & Medicaid Services (CMS) to enter into contracts to review Medicaid provider actions, audit claims, identify overpayments and educate providers and others with respect to Medicaid payment integrity and quality of care.

What are MICs?

MICs are entities with which CMS has contracted to perform audits of Medicaid providers. The overall goal of audits is to identify overpayments and ultimately decrease payment of inappropriate Medicaid claims. CMS expects to roll this program out nationwide by the end of 2009.

Who Will the MICs Audit?

MICs will focus on fee-for-service providers, e.g., hospitals, long-term care facilities, home health agencies, pharmacies, physicians, etc., and managed care entities. MICs will use data mining and other techniques to identify potential billing errors related to duplicate payment, payment of noncovered services, unbundling of services and other errors.

Once a provider is selected for an audit, the MIC will send a notification letter to the provider requesting medical records. The provider will then have an opportunity to meet with the MIC during an entrance conference. After the audit is completed, the MIC will issue a report with its findings. The provider will then have 30 days to respond and submit additional information. After this process, any appeals will be handled in accordance with applicable state appeals processes.

What Should I Do?

Proper preparation for MIC audits and appropriate response, if audited, is critical. Now more than ever, providers need an effective compliance plan to help ensure appropriate coverage decisions, proper assessment of patients, appropriate care delivery, proper supporting documentation and accurate billing. Providers should consider conducting routine “self audits” to identify potential risk areas or consider external assistance in this area. In addition, since Medicaid reimbursement plans differ by state, providers will need to contact their respective state associations, legal counsel and others to determine areas of emphasis for MIC audits in their state.

If you receive a notification letter, we recommend you contact legal counsel for assistance with responding to requests, guidance for participating in the entrance conference and assistance with the appeals process, if necessary.

If you have further questions regarding the MIC program, effective compliance plans or related issues, contact your BKD Health Care Group advisor.