Craig S Steinberg, O.D., Esq. Optometric & Healthcare Law

What Are the Different Kinds of VSP Audits?

VSP undertakes two distinct kinds of audits. The first, the more common audit, is referred to as their "Quality Control" audit. In this audit you are typically asked to send in a number of randomly selected records, and the VSP Quality Control unit reviews them and returns to you a report of the audit results, sometimes including a "corrective action plan" identifying things you need to do better or where you are deviating from VSP rules. These random audits should be expected from time to time, on average about once every three years. Being selected for a quality control audit does not mean that VSP suspects you are doing anything incorrectly.

The second kind of VSP audit is what I refer to as a "Targeted Audit." This audit is performed by the VSP Special Investigations Unit (SIU). A VSP SIU investigator will show up at your office, unannounced, and ask for on average 30-50 records. These are not randomly selected records. Instead, they will be related to one or more areas (VSP refers to them as lines of business) where VSP has determined that you are likely or potentially violating VSP rules and/or may be committing fraud. You or a staff member may be asked to sign a statement assuring that you have provided VSP with all records related to each patient in the audit (e.g. financial records, computer records, records of ancillary tests, etc.). These audits are generally performed, not to determine IF you are violating VSP rules, but to prove that you ARE violating them.
 

What Is Likely to Trigger a 'Targeted Audit' of My Office?

It appears VSP has identified a number of activities which are "red flags" that you may be over-billing VSP or otherwise not complying with VSP rules. Among them are:
 

• Billing for Medically/Visually Necessary Contact Lenses (NCL) at a rate higher than other practitioners in your area, or at a rate higher than you traditionally have.
• Billing for Primary EyeCare (PEC) and supplemental tests or procedures (such as photos, punctal plugs, etc.) at a rate higher than other practitioners in your area, or at a rate higher than you traditionally have billed in the past, or using a high number of any particular diagnosis code, especially Glaucoma Suspect and the Dry Eye related codes. VSP understands what the frequency of these conditions is in the public, and if you bill it more frequently than normal, you're likely to be audited.
• Billing for both PEC services and standard (routine) exams on or near the same date of service. 
• Billing with some frequency for contact lens services for young children. 
• My experience and opinion is that doctors of an Asian decent are more likely to be scrutinized for auditing than other doctors. In particular, VSP looks for the improper use of VSP benefits for family members, and for billing VSP for plano sunglasses, two practices that violate VSP rules and it appears to me to occur or be requested relatively more commonly in the Asian patient population. 
• Billing two-pair in lieu of bifocals with a higher frequency than normal for your community.

There are, of course, any number of triggers for an audit. In some cases a routine quality control audit can lead to a targeted audit. In others, patient complaints or information from a disgruntled employee can trigger a targeted audit.
 

What Should I Do If An Auditor Shows Up at My Office?

First, before that happens, you should make your staff is aware that audits do happen from time to time and they should expect it. It is a routine process that most plans engage in, and so the staff should not be surprised or defensive. They should be polite and cooperative with the auditor. If you are not at the office, someone should call you to let you know that the auditor is there, and you should come down and meet the auditor and be available to direct the staff to find and produce the records.

During the actual audit, the single most important thing you can do is find and produce ALL of the records related to each patient they are asking for. Don't try and defend yourself with the auditor, just get the records. One of the most common problems is the failure of the staff (or doctor) to provide all relevant information. What is relevant information? Everything you have on a patient that relates to the services and materials provided. For instance, if you record the date contact lenses are dispensed to patients in a document apart from patient records, that document should be provided so that the auditor can see that there is a record of the contacts being dispensed. If you have a separate file for your Interpretation and Reports, that should be produced. If you use paper records, but computer financial records, provide both. At the conclusion of the audit you or your staff person will be asked to sign a document that verifies that you've provided all documents, including invoices, electronic files, financial records, etc., for each patient. It does not look good for you to later be arguing that you had the information they concluded you didn't have, you just didn't know you needed to give it to them. Do not try and guess what information they want. Give them everything for each patient they are auditing. That is the most important thing you can do. If you maintain electronic data, such as JPG photos or scans, print those or advise the auditor of their existence and ask how he wants them produced.

If there are any records you can not find, ask the auditor for permission to provide them via fax within 24 or 48 hours, and put that in writing if he or she gives permission. But really do your best to find every record. Double check names to be sure you've filed the record under the same name VSP has given you. Often that's a problem, as you may have it filed under a maiden name, or hyphenated name, etc.

Ask for a copy or keep a copy of the list of patients that were audited, and after the auditor leaves gather for yourself all records that were audited and everything that was provided to VSP. This will help you to contest the audit if errors are made by the auditor.
 

How Do I Make a Profit If I'm Always Afraid I'll Trigger a VSP Audit?

Supplemental tests, however, are different than the 992xx evaluation and management codes. Supplemental tests must be justified by clinical findings and/or patient complaints noted in the chart, but they can be billed the same day as a "routine" (920xx) exam if the medical indication is found during the course of the exam. Again, take the red eye patient that is also due for an annual exam. You CAN choose to perform the annual (920x4) exam and forego billing for the red eye office visit (992x3), but take an anterior segment photo and bill PEC for that. So, here are your options on that red eye patient that is also due for their annual exam:

1. Routine exam (92014) today with refractive diagnosis, plus anterior segment photo today for Dx of conjunctivitis.
2. Medical exam (99213) today plus anterior segment photo today, both with a Dx of conjunctivitis.
3. Medical exam (99213) today plus anterior segment photo today, both with a Dx of conjunctivitis, with annual (92014) exam later that week.
4. Routine exam (92014) today with refractive diagnosis, anterior segment photo today for Dx of conjunctivitis, schedule the patient for a follow-up check on the red eye, and bill that visit when it occurs as a 99213 with diagnosis of conjunctivitis.

Options 1 and 2 generate less overall revenue than do options 3 and 4, each of which pays you for both an annual exam AND an office visit, which is perfectly appropriate and legal if they are on different days.

Here is another example, which comes up regularly. Patient is due for their annual exam. Chief complaint is, "need new CL Rx." You do the exam, and note IOP of 25 and c/d of .6 in this African American 56 yo male. You conclude he is a glaucoma suspect and needs a workup for COAG, which may mean gonioscopy, photos, and threshold fields. You can NOT bill this visit as a 992xx medical exam, because the reason for the visit was of a "routine" nature having nothing to do with glaucoma. So, you have two choices. Bill the exam as 92014 with a refractive diagnosis, and perform and bill the supplemental tests with a glaucoma suspect diagnosis, or, bill the exam today as 92014 (a routine/annual exam), and schedule the patient to return for a glaucoma workup in a few days. At that second visit you'll indicate the reason for the visit is a glaucoma workup, and, so long as you document the elements of an office visit, you can bill a 99214 E&M code and the supplemental tests all with a diagnosis of glaucoma suspect. In this way, you have generated one office visit greater revenue. (Remember, you must generate interpretation and report documents for the supplemental tests.) In my experience, most patients are willing to return to the office on another day for supplemental tests if it is explained to them in the correct way.
 

What Kinds of Supplemental Tests and Procedures Does VSP PEC Cover?

Here is a partial list of the supplemental procedures which VSP PEC covers, and whether or not an I&R (interpretation and report) is required. Note that EACH of these has identified diagnosis for which they may be performed, and most have special conditions or rules, so you MUST consult the VSP manual to ensure you are doing them at the right time, right frequency, and billing them properly.
 

Again, it is imperative that you review VSP's rules on these supplemental tests and procedures. The VSP manual is there to help you. Go the the VSP manuals and select the Primary Eye Care Plan section. Scroll down. Each of these tests is listed, along with the frequency with which they can be performed, and the ICD-9-CM Diagnosis Code which must be (can be) used. This is an opportunity for you to practice better optometry and be paid for your services. Look at the diagnosis codes and perform those medically indicated tests that are appropriate. Here is the key: be sure the diagnosis code matches with the procedure performed, and that the clinical indications and findings in your exam record are consistent with both the diagnosis and the procedure or test. If you are billing for macular degeneration, your chart probably should not indicate that the macula is normal! If your clinical findings do not reflect evidence of macular degeneration (e.g. in the area of your chart where you record retinal findings or internal examination) VSP will determine and conclude that your diagnosis is not supported by your findings.
 

What Exactly is an "Interpretation and Report?"

VSP has published the following specific guidelines of what it expects in your "interpretation and report" and these can be found in the VSP on-line manual in the section on supplemental testing. Generally, VSP requires that you record three things:
 

Record SOMETHING in these three areas and you should be in full compliance with VSP rules. Remember that this should be a separate document, or at least a separately identifiable area in your record, and not a part of the patient's regular chart or medical record. Here is an example of a proper I&R. Assume the patient had visual fields as a glaucoma suspect:

Threshold fields (92083) performed to r/o COAG; suspect due to large c/d, IOP 21, and FHx of COAG. Impression - fields normal, no change since 2010. Return 6 mo to check IOP and nerves, 12 mo to repeat fields.

As you can see, you don't have to write a lot. You just have to cover the essential points: what did you do, why did you do it, what did you find, what are you going to do as a result.

Also remember that, if you are also billing an exam at the time the supplemental tests are being performed, your regular record/chart should reflect what examination you have done. You cannot bill for an exam (e.g. 99213) solely because the patient was there for, say, fields. You must also examine the patient and note what was done in your record.
 

What Can I Do to Increase the Chances I'll Survive a VSP Audit?

More than anything else -- follow VSP's rules and procedures. This, of course, starts with knowing VSP's rules and procedures. You should, at least 2-3 times a year, go to the VSP website and review the VSP manual. Pay particular attention to VSP's rules for documentation and their Primary Eye Care and Supplemental Test sections if you bill for these. Here are the steps to finding the VSP documentation you should review:

• Go to http://www.vsp.com
• Select the Doctors and Optometry Students link
• On the left, select the Eyefinity link (or just go direct to https://secureb.eyefinity.com/welcome/)
• Log in as an Eyecare Professional with your User ID and Password
• On the right side, select the VSPonline option
• On the left side, select Manuals
• Select VSP
• Pay particular attention to the sections: Plans and Coverages, Eye Exams, and Dispensing and Patient Options

The number one problem that will lead to a poor audit outcome is poor or missing documentation and/or a failure to document clinical findings. That bears repeating: if you don't adequately document everything you do, you are likely to have a poor outcome from any audit. That means document fully, and accurately. Your chief complaint must be consistent with the billing, your diagnosis, assessment and plan must be consistent with the clinical findings, your contact lens services (fitting, follow up, etc.) must be recorded, the clinical basis for your diagnosis must be written, and all financial records must match with the patient's chart.

If you are billing for contact lens services, for example, your records must indicate a Contact Lens fitting occurred and reflect the data from the fitting, that lenses were dispensed (what and when), and that they were evaluated. Merely writing a contact lens prescription on the chart may not be sufficient to meet VSP's documentation requirements to demonstrate that you actually did a CL fitting and dispensing.

Similarly, where an "interpretation and report" is required for a supplemental test being billed under Primary Eye Care (PEC) (e.g. photos, fields, etc.), you must have that I&R and it must be a separate document (it cannot be on the patient's regular chart). If you are billing for PEC visits or tests, your chart must reflect examination findings that support the diagnosis. For instance, if your ophthalmoscopy or fundus findings say "WNL" and you bill PEC for "macular degeneration" your billing will be deemed unsupported. If you bill a 92083 threshold fields, you should have a diagnosis code and findings in the chart that are consistent with a reason for threshold fields. Remember the rule: it isn't only what you do, it is also what you documented you did, that will determine if you are entitled to payment.

Pay particular attention to what you write as the patient's "Chief Complaint" or "Reason for Today's Visit." That will dictate whether you must bill the exam as a "routine" visit with a 92xxx code, or whether you can choose to bill it as an Evaluation and Management, 99xxx, code and preserve the patient's eligibility for a "routine" exam down the road. I advise doctors to NOT use staff to enter or record on the record what the patient's chief complaint is, and to complete your history and even your exam before putting the chief complaint into writing on the patient's record. Often, during the course of the history and exam, you learn that the patient's REAL complaint or problem is not what was said at the beginning of the exam, or what they said was only part of the story. Most doctors do not go back and update the "chief complaint." Wait until you know everything before you record why the patient is in today. It has an important impact on how and what you can bill for the visit.

VSP does not cover both a standard (routine/annual) exam and PEC performed on the same day. If you are billing for both for, say, a glaucoma patient that also needs his or her glasses checked, you must either have the patient back another day or bill for one and not the other. What you can NOT do is change the date of service by a day and then bill both in order to save the patient the inconvenience of having to come back.

One of the common "gotcha's" is the staff putting "post-it" notes on a patient chart. It is common to see in an audit a note or sticky that makes reference to using benefits for a family member, for instance. All notes and post-its being used internally by the office should be removed from your chart. Otherwise, they are a part of the medical record.

When billing for two-pair in lieu of bifocals, you must document every year why two pair is required. The mere fact that an 80 year old has one leg and been wearing two pair for 15 years is insufficient. You must actually write on the chart, every year, that the patient can't wear bifocals as a result of having one leg and difficulty walking in bifocals. Remember, with VSP the adage of "form over substance" rings true!

Critical to all audits is being able to FIND each chart requested and to provide VSP with ALL DOCUMENTS related to the visit being audited. Charts you cannot find in an unannounced audit are considered over-billed. You can't necessarily fax them to VSP the next day and get credit for the record! It is also critical that you provide VSP with ALL the records you have related to a patient visit, including separate documents such as billing records, welcome to the office and patient history forms, lab and CL invoices, and the like. If you don't provide it to VSP, they will assume it does not exist. You can't produce it after-the-fact. Many of my clients tell me after they get their poor audit outcome that they had X but didn't know VSP wanted it, and they blame VSP for not asking for it. But VSP cannot ask for what they don't know exists. You know you have it. Give it to them. Better to give them information they don't need than the other way around!
 

Are Electronic Health Records (EMR/EHR) Acceptable?

Yes, electronic records are perfectly acceptable. But, there are some caveats. First, VSP does not accept "default" or automatically entered exam values. You are expected to enter the actual exam results. More importantly, default values for the examination are increasingly causing problems during audits. Doctors MUST be sure the "default" values are consistent with the examination findings and the diagnosis. For instance, many EMR programs have default values for the anterior segment that include a notation that the cornea is clear and without staining, and the conjunctiva is clear and white or quiet. If you then diagnose ocular allergy, or conjunctivitis, or even dry eye, the auditor may question the diagnosis in light of the exam record. If you are going to bill for anything other than a "routine" 92xxx code, be sure your exam record is fully consistent with your diagnosis, assessment, and plan.

Also, remember that, if you are audited, you must provide the auditor with ALL of the electronic records for a patient. Often there are relevant records beyond the basic exam, but, unlike the case with a paper file, the auditor will not know they are there unless you print them out. Examples are contact lens fitting forms, financial data, photos and test results, and interpretation and reports. You can not provide the auditor with too much information, only too little! 
 

What Will Happen After I am Audited by a VSP SIU Officer?

A number of weeks after the audit you will receive a letter indicating the results of the audit. In most cases that letter will either (a) give you notice that VSP is terminating your Network Provider Agreement (e.g. kicking you off the panel); (b) ordering that you pay restitution for over-billing; or (c) both. Instead of terminating your VSP membership, VSP may instead offer you a "Consent Decree" together with a "Corrective Action Plan." The Corrective Action Plan is ordinarily just an agreement that you not continue doing the things that the audit alleges you were doing. The Consent Decree is more burdensome. It will put you on probation for a period of time. During that probation period, if you are determined by VSP, in its sole discretion, to have violated any VSP rule, they can or will terminate you from the panel, and they do not have to give you a hearing before doing so. In addition, they can audit you at any time, and you agree to pay all costs and fees related to that audit (typically in the $4000-$6000 range).

The letter will also explain your rights to an appeal of VSP's findings under their "Fair Hearing Plan." This says, in effect, you have 30 days to appeal, and explains the procedure for requesting an appeal and the fair hearing procedure itself. If there is an order that you pay restitution VSP will immediately begin withholding all funds VSP owes you and applying it to the restitution. (Note: this may not be legal under California law.)
 

How Does VSP Determine the Restitution I May Be Required to Pay?

VSP uses a statistical method (of uncertain legal validity) to determine restitution demands. The audit results will determine that you have been over-paid a percentage of what you should have been paid. For instance, if you billed $10,000 in the audit sample, and VSP determined you should have been paid $4,000 (and you were over-paid $6,000), VSP will conclude you were overpaid 60%. They will then determine the total billings by you for similar patients to those subject to the audit (e.g. all PEC, or all MNCL) for the past three years and multiple that total by the overpayment percentage to determine a total restitution amount. They will also add in about $4500-$6500 for the "audit costs." This will be the total you are being required to repay VSP. This number is commonly in excess of $100,000, and often FAR in excess of that amount.
 

What Can I Do if I Disagree With the Audit Results?

Pursuant to VSP's "Fair Hearing Procedure" and the applicable law, if you do not agree with any part of the audit you have the right to appeal and receiving an administrative peer-review hearing before VSP's Quality Control Panel. This is a group of three VSP doctors selected by VSP. They will review a sample of some of the records in the audit which the VSP SIU will show them. You will be given an opportunity to present your own records and evidence in support of your argument, and to ask questions of the VSP auditor. If, after the hearing, the VSP panel determines that, based on the examples that the SIU shows them, after taking into account whatever defenses or arguments you made to them, that the initial SIU determination was reasonable or appropriate, they will support and uphold the VSP decision. They have the authority, however, to alter VSP's initial ruling. They can revise the restitution, reverse a decision terminating you from the VSP panel, and can fashion a number of other remedies depending on the facts of each case. But, be forewarned, it is not easy to convince the VSP Panel to over-rule the initial VSP decision. There is a significant bias in favor of the initial VSP decision, and the burden is clearly on you to convince the panel that VSP was wrong. Do not think that, just because the panel is made up of doctors like you, they will agree with your point of view or be sympathetic to your argument. Sometimes they are; More often they are not.

If you lose the hearing, all is not lost. You have additional options, including seeking an arbitration before an arbitrator who is not a VSP doctor. VSP has established a number of rules applicable to the arbitration, some of which are, in my opinion, questionable in terms of ensuring a fair arbitration. In some circumstances you may also be able to file a legal action in Court to challenge the VSP hearing results. Which option is best will vary from case to case, and is something that should be decided with experience legal counsel.

VSP gives you 30 days from receipt of their audit results to request a hearing and appeal the decision, and 30 days after receiving the hearing results to request arbitration. Assuming you are not satisfied with the audit or hearing outcome, you should, promptly after receiving the results (within a couple of days), speak with an attorney that is knowledgeable about optometry, VSP, and VSP administrative hearings to discuss your options going forward.

Remember, any adverse VSP action CAN BE and typically is reported to the National Practitioner Data Bank (NPDB) and will be on your permanent record. All other plans you participate on will get notice of the VSP adverse action. VSP may also report some outcomes to your Board of Optometry, which can lead to disciplinary action against your license. For these reasons, it is best to work with an attorney whenever you are facing an adverse decision by any third party payer.
 

How Can a Lawyer Help Me if I am Audited or if I Want to Appeal an Audit?

An attorney knowledgeable about optometry can be invaluable in defending an audit. First, lawyers are highly skilled at organizing and presenting evidence and arguments, which will make your hearing presentation far more compelling and give you the best chance of convincing the hearing panel that the SIU's audit result is not correct. In addition, you have a number of legal rights under California law, and an attorney will ensure that you are able to exercise those rights. Importantly, because the hearing is an "administrative hearing" and you must "exhaust" all administrative remedies before you can sue VSP, and you often cannot present new evidence in a lawsuit that was not offered in the administrative procedure, it is essential that a complete record of the evidence, events, and arguments be created at the hearing. Your attorney will ensure that you are protected. Finally, an attorney knowledgeable about the process and VSP can often help negotiate a resolution of your matter.

Finally, the process of addressing and appealing a VSP audit is stressful. Your attorney will take a lot of that stress off of your shoulders. The results will be that you'll have the best chance of making your case to the hearing panel, and the best chance of surviving the audit.

If you wish to appeal the results of a VSP audit, I'd encourage you to contact me before doing anything else.

Can You Help Me Know If I am at Risk Before I'm Audited by VSP?

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