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How to Survive an Audiology Audit: Protection Through Documentation

Shaw, Gina

doi: 10.1097/01.HJ.0000442739.26852.16
Cover Story


A Missouri audiologist pleads guilty to fraudulently billing Medicare for hearing devices and services that were not provided to patients. Two months later, she is sentenced to five years’ probation and ordered to pay $30,000 in restitution.

In California, an elderly audiologist is sentenced to six months in prison, as well as 15 months of home confinement and $100,000 in restitution, for false Medicare claims for audiology services. The claims included many routine tests performed without a referring physician's order.

These two cases made headlines because the audiologists involved actually faced criminal penalties and prison time for false Medicare billing. But over the past five years—since the Centers for Medicare & Medicaid Services implemented its permanent national Recovery Audit Program, designed to identify and recoup Medicare improper payments—many more practicing audiologists have faced the prospect of an audit of their Medicare claims.



“Audiology doesn't have the Medicare billing numbers compared with some other healthcare professions—we're just not a big-ticket item—but that doesn't mean we're not vulnerable to audits,” said Paul Pessis, AuD, owner and founder of North Shore Audio–Vestibular Lab in Illinois and past president of the American Academy of Audiology (AAA).

A review of recent quarterly reports from the Recovery Audit Program reveals that cardiovascular procedures and minor surgery billed as inpatient procedures are consistently the top two healthcare categories in terms of money collected by the audit program. Durable medical equipment also tends to garner a lot of auditor attention.

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Neither the AAA nor the Academy of Doctors of Audiology (ADA) had current figures for the total number of audiologists or audiology practices audited in recent years. Kathy Landau Goodman, AuD, is the owner of one such practice.

In the approximately 30 years since she opened the first of her five locations, Dr. Landau Goodman of Main Line Audiology Consultants in the Philadelphia area has undergone two Medicare audits—one in 1990, prior to the launch of the current Recovery Audit Program, and one in 2005, when that program was in its pilot phase.

“During both audits, they looked at a three-year period,” she said. “The first audit was focused on our nursing home work, and we ultimately had over 90 claims rejected and had to give back $65,000.”

Dr. Landau Goodman's practice serves about 50 retirement communities, assisted living facilities, and nursing homes.

The second audit was a random audit of private offices and involved a smaller group of claims—about 30 or so.

“The auditors actually sent letters out to the referring physicians and asked why they had referred their patients to us,” Dr. Landau Goodman said.

“If the physician replied that it was for getting hearing aids or mentioned the word screening, and didn't write anything about a diagnostic reason, those claims were rejected.

“We were very careful and had physician referrals on every single patient, but if the doctor didn't mention a diagnostic need in their response, we didn't get paid. What mattered to the auditors was the reason for the physician's referral as stated in the letter, not the outcome.”

One patient had fluid in his ears and a significant conductive component to his hearing loss.

“He had a middle ear problem and needed tubes—a condition that was medically treatable,” Dr. Landau Goodman said. “But we were rejected because his doctor said he sent him to us because he needed hearing aids.

“I fought it, and I lost.”

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There are a few billing patterns and practices that could place your practice at higher risk for an audit, said experts interviewed for this article.



  • Repetition of codes: “If you're always billing the same code on the majority of your practice, that might raise an eyebrow,” Dr. Pessis said. “That doesn't mean you're doing something wrong; it just means that you've garnered the attention of the algorithms Medicare implements.
  • “If you specialize, you might have a lot of repeat codes. If you have documentation to back it up, you're fine.”
  • Unusual coding pairs: “Look at your CPT and ICD-9 coding pairs,” Dr. Pessis said. “If they are heavily weighted toward sensorineural hearing loss, Medicare might do an audit just to see if all those sensorineural hearing losses are legitimate and that you weren't doing the testing for purposes of hearing aid selection.”
  • Nursing home patients: If a nursing home or other facility where an audiologist provides services is being audited, the audiology provider may be audited as well, Dr. Landau Goodman said. That was the case for her practice in 1990.
  • “If you take a contract with a nursing home, and you're evaluating everyone in that nursing home without a specific MD referral and then billing Medicare, that's going to trigger an audit, and you're going to lose,” said Barry Freeman, PhD, president and CEO of Audiology Consultants.
  • Frequent special testing: Audiologists who consistently bill Medicare for special tests that are not part of a standard comprehensive evaluation are more likely to be audited, said Brant Christensen, AuD, owner of Brant Audiology Associates in Wyoming.
  • “They understand that tympanometry and reflexes are part of the basic evaluation that every patient needs, but if you're consistently billing for acoustic reflex decay for every patient, that can flag an audit.”
  • Unbundled codes: Medicare used to permit certain procedures to be billed separately. Now—not just for audiology, but across healthcare services—there are “bundled” codes that encompass the typical procedures a provider would perform in a single day for, say, vestibular testing.
  • “You must use that single new code, or they will kick the claim out and potentially audit you,” Dr. Freeman said.
  • For example, when providers bill 92550 (tympanometry and reflex threshold measurements), they may not also bill 92567 (impedance testing) or 92568 (acoustic reflex threshold testing) on the same day; 92550 now encompasses those codes.
  • Enticement of referrals: Audiologists may wish to perform annual testing of patients with hearing loss in order to monitor for potential progression. However, such routine hearing tests provided when a patient has not reported any change in symptom history is excluded from Medicare coverage.
  • “Some practices will tell their patients to call an internist or ENT to get a referral for an annual exam in order to meet the medical necessity requirement,” Dr. Pessis said. “That's considered ‘enticing’ a referral.”
  • A substantial percentage of patients coming in annually with a physician referral letter may set off alarm bells with the Medicare algorithms.
  • While these are some of the common triggers for an audit, any audiologist who bills Medicare, no matter where the practice is located or what the practice patterns are, may end up being audited.
  • “I used to be affiliated with a university in Florida, and there were inappropriate billing issues identified in one of the health clinics on campus—not ours,” Dr. Freeman said.
  • “Medicare put us all on a five-year compliance watch, where every clinic on campus that was billing Medicare went through routine audits once or twice a year.”
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Don't wait until the letter from the Recovery Audit Contractor (RAC) arrives to prepare for the possibility of an audit. The best protection is comprehensive documentation, Dr. Freeman said.

“Audiology is no different than any other healthcare profession. The area where they fall down most is documentation, or lack of it. I don't think you have many audiologists out there doing anything intentionally fraudulent, but it's so critical to document what you're doing.”

Since audiologists cannot bill Medicare without a prior order from a physician, documentation of this part of the process is absolutely critical for every audiologist's charting.

The commonly used SOAP note (subjective, objective, assessment, and plan) is a convenient documentation tool to help ensure that nothing is missed.

“Within the ‘subjective’ part of SOAP is where I would substantiate the medical necessity and the physician referral,” Dr. Pessis said.

“For example, ‘Dr. Jones referred Mary Smith with a complaint of …’ and that complaint would not be ‘needs hearing aid.’ It might be ringing in the ears, dizziness; even hearing loss is considered medical necessity.

“If you go on to recommend a hearing aid, that's OK as long as the initial referral for evaluation was for a more investigative reason.

“Your SOAP note also has to substantiate why you perform the procedures you perform, and the diagnosis should bear those out.

“If your practice thinks it's important to perform a complete test battery on every patient, that's fine, but you can only bill Medicare for the components of testing for which you can document medical necessity.”

There are a number of compliance classes specific to audiology that encompass Medicare billing and auditing, including the third-party payer boot camp program through Audiology Online given by Kim Cavitt, AuD, owner of Chicago-based Audiology Resources, and the Insurance Billing Academy program created by Dr. Pessis and available at Educated Patients. In addition to Medicare, these programs also cover other third-party payers, which can conduct audits as well.

Compliance training is important not only for audiologists, but also for other staff members, Dr. Freeman said.

“Everyone in your office should go through training at least annually, and every new person should receive it as part of your on-boarding process.”

Regular chart review—a practice's own internal audits—can further help ensure that all documentation is complete, physician referral letters and audiogram results are in place, and everything is signed and dated.

“If your physician referral letter isn't dated, it will fail an audit,” Dr. Landau Goodman said.

If a practice is audited and claims are denied, that is not necessarily the end of the story. There is the possibility of an appeal.

Dr. Landau Goodman appealed both of her audits—the second one with the support of the AAA. Although some denials were upheld, the judge overturned other denials.

“For all of those claims that were first-time tests for diagnostic purposes, even if the patient was ultimately fitted with a hearing aid, we were able to document medical necessity,” she said. “The claims were upheld.”

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The American Speech–Language–Hearing Association (ASHA) and the Academy of Doctors of Audiology (ADA) have a number of online resources to help audiology practices improve documentation and avoid, or prepare for, an audit.

The Centers for Medicare & Medicaid Services also has a dedicated section about audiology services and reimbursement on its website:

© 2014 by Lippincott Williams & Wilkins, Inc.