MAC Audits

Last Updated on: 18th April 2025, 11:47 pm

MEDICARE MAC AUDITS — THE FEDERAL SPOTLIGHT YOU CAN’T IGNORE

If you think a Medicare Administrative Contractor audit is “routine paperwork,” you’re wrong. It’s a federally backed investigation into your billing integrity, and it can bankrupt a clinic that handles everything else flawlessly.

AS SEEN BY CMS — WHAT A MAC AUDIT REALLY IS

Medicare Administrative Contractors (CMS.gov/Medicare) process $400‑plus billion in claims annually. Congress gave them authority under 42 U.S.C. § 1395y to audit any provider, at any time, with no advance warning. When a MAC flags your claims, you face:

• Document requests (ADR letters) with a 30‑day turnaround.
• Payment suspension on the reviewed National Provider Identifier.
• Immediate recoupment if the MAC issues an overpayment decision.

Ignore an ADR, and CMS can initiate Office of Inspector General referral. That opens the door to Civil Monetary Penalties up to $100,000 per false claim and possible False Claims Act liability—triple damages and attorney fees.

CALL‑OUT: FAILURE TO RESPOND MEANS AUTOMATIC PAYBACK + INTEREST.

HOW A MAC AUDIT STARTS — STEP BY STEP

The trigger list is public. CMS publishes it every quarter. Still, most providers act surprised when a letter hits their inbox. Typical triggers include:

1. Billing a high volume of Evaluation & Management 99214 codes compared to peers.
2. Outlier use of modifier‑25 or modifier‑59.
3. Frequent Part B telehealth claims above the state median.
4. Past CERT error rates exceeding 15 %.

Once flagged, the MAC will pull anywhere from 1 to 40 claims per cycle. It reviews medical necessity, signature compliance, and correct coding. Recoupment can span six years of look‑back, because § 1862(a)(1)(A) bars payments lacking medical necessity. Miss that nuance, and you hemorrhage revenue fast.

LEGAL BACKBONE OF MAC AUTHORITY

Providers complain the audit feels “unfair.” Tough. The law is explicit:

• 42 C.F.R. § 405.940 — grants MACs power to reopen a claim within four years “for good cause.”
• 42 C.F.R. § 405.920 — permits pre‑payment review without paying you a dime until the audit clears.
• 42 C.F.R. § 405.980 — sets the appeals clock: redetermination (120 days), reconsideration (180 days), ALJ (60 days), Council review, then federal court.

Skip any deadline, and the previous level’s decision becomes final. No second shot.

HEADLINE: CMS CAN DEMAND 100 PERCENT OF THE OVERPAYMENT + 11 % INTEREST.

PENALTIES — NUMBERS YOU CAN’T NEGLECT

If the MAC determines overpayments, expect:

MAC VS RAC VS UPIC — KNOW YOUR ENEMY

Bottom line: RACs chase money; UPICs chase fraud; MACs straddle both. Treat each with a tailored defense plan.

FIVE DEFENSE LEVERS THAT ACTUALLY WORK

1. Immediate Hold‑Harmless Review. Freeze disputed codes, reroute them to an internal compliance gate. That stops new exposure.

2. Parallel Reconstruction. Create a replica claim file—every progress note, every lab, every consent form. Present it in the MAC’s requested order. You make the auditor’s job easy, you cut error risk.

3. Targeted Clinical Rebuttal. Attack medical‑necessity denials with peer‑reviewed literature and, if needed, sworn affidavits from independent specialists. CMS rules permit “credible medical opinion” as valid evidence.

4. Statutory Appeal Blitz. File redetermination within 30 days to halt recoupment (42 C.F.R. § 405.379(d)). Miss that date, and the MAC starts auto‑offset. Money gone.

5. Parallel OIG Risk Mitigation. Flag any systemic issue, disclose corrections in a Provider Self‑Disclosure Protocol if necessary. Voluntary disclosure can slash penalties by up to 50 % and discourage criminal escalation.

NEWS‑FLASH: APPEAL SUCCESS RATES JUMP FROM 12 % TO 49 % WHEN PROVIDERS SUBMIT CLINICAL EXPERT REPORTS.

CRITICAL GAPS WE SEE EVERY DAY

Gap #1 — Zero Audit Readiness. You wait for the letter, then panic. That’s amateur hour. Build a 30‑minute drill: retrieve records, assign counsel, draft cover letter. Anything slower loses leverage.

Gap #2 — Poor Documentation Culture. Nurses copy‑paste vitals, physicians sign days later, templates stay half‑filled. MACs notice instantly. Incomplete notes = automatic denial.

Gap #3 — Magical Thinking About Appeals. Providers assume an ALJ will “make it right.” Reality: ALJ backlog is 3‑plus years. Cashflow dies long before your hearing unless you halt recoupment now.

Gap #4 — DIY Defense. You think an in‑house biller can handle complex CFR arguments. She can’t. Judges expect citations, statistical sampling challenges, rebuttal exhibits. Bring experienced federal counsel or bleed out.

SYSTEMIC ACTION PLAN — WHAT WE EXPECT YOU TO IMPLEMENT

1. Quarterly Self‑Audit. Sample five claims per provider, per high‑risk CPT cluster. Benchmark error rates against CMS Comprehensive Error Rate Testing data.
2. Real‑Time Compliance Dashboard. Tie your EHR to analytics that flag over‑threshold use of key modifiers. We recommend setting alerts at 150 % of state average.
3. 30‑Day Appeal Protocol. Pre‑draft redetermination templates. Include space for attorney affidavit, medical literature, and corrected claims.
4. Escrow Reserve Strategy. Park at least 10 % of monthly Medicare revenue in a reserve account. If recoupment hits, you pay staff and vendors while counsel fights.
5. Provider Education Loop. Monthly one‑hour coding webinars, mandatory sign‑in. Keep the slide deck ready for auditors; it proves proactive compliance.

ONE‑LINE TRUTH: IF YOU DON’T FUND COMPLIANCE, YOU FUND THE OIG.

CASE IN POINT — HOW SPODEK LAW GROUP SAVED A HOME‑HEALTH PRACTICE

In 2024 a Texas home‑health agency received a MAC overpayment letter demanding $2.7 million. The provider had 15 days before automatic offset. Our firm:

• Filed a redetermination in 9 days, which froze recoupment.
• Conducted a statistical projection challenge under PIM Ch. 4 and invalidated the sample.
• Submitted 312 pages of clinical literature showing therapy frequency met National Coverage Determination 220.1.

Outcome: MAC reduced liability to $96,000—a 96 % decrease. Cashflow stayed intact, and no OIG referral followed.

FREQUENTLY ASKED — RAPID‑FIRE ANSWERS

How long can a MAC audit my claims? Four years for simple mistakes, six for suspected fraud. CMS guidance is brutal; assume six.

Will I face criminal charges automatically? No. But pattern overpayments can trigger DOJ interest under the False Claims Act. Prison sentences reach five years per count.

Can I bill while under audit? Yes, but expect pre‑payment review. That means no cash until auditors clear each claim.

Does an appeal really stop recoupment? A redetermination filed within 30 days halts offset. File on day 31, and CMS collects first — argues later.

WHY CHOOSE SPODEK LAW GROUP

We are Spodek Law Group, a nationwide federal defense firm led by Todd Spodek. Our attorneys have 50 years of combined experience crushing federal audits. We don’t negotiate from weakness. We confront auditors, contest sampling methodology, and if the case escalates, we litigate in U.S. District Court under 42 U.S.C. § 1395ff(b). Most firms cave to CMS for a “reasonable” settlement. We don’t. We fight, we protect, we win.

Risk‑free consultation, 24/7. Dial 888‑997‑5177. Send the ADR, the demand letter, the EOB run. We review it all—fast.

THE BLUNT BOTTOM LINE

You kept sloppy notes, billed aggressive codes, and now the government wants its money back. Excuses won’t rescue you. Action will. Implement the plan above, engage experienced counsel, and treat compliance as a permanent operating expense. Anything less is financial self‑destruction.

SPEAK TO AN ATTORNEY NOW.

Spodek Law Group. We handle the law; you keep treating patients.

Disclaimer: This article provides general information and does not constitute legal advice. Reading it does not create an attorney‑client relationship with Spodek Law Group. Every case is unique; consult qualified counsel regarding your specific facts. The firm may work with local counsel when necessary to comply with jurisdictional requirements.