Questions & Answers: Audits
Therapists aren’t taught clinical documentation in school, leaving them vulnerable to audits and claw backs. The Documentation Wizard is here to help answer some of the most commonly asked questions about audits so you aren’t caught unprepared.
QUESTION 1: Informing Clients
I just received an audit letter. Do I need a to inform my client that they’re being audited and get a signed release?
Technically, you do not need to inform your client that you’re being audited. Nor do you need the client to sign a release of information so you can send the insurance company the documents. When contracting with the insurance company, both the client and the therapist signed contracts stating that the insurance company has the right to review all documentation. Therefore, what the insurance company is demanding is not a HIPAA violation and perfectly within their rights.
However, you may want to inform your client as a matter of professional courtesy and to educate the client about audits and medical necessity, if you haven’t already. Even if you have, clients often don’t remember so this is a good time to remind them. Also, the outcome of the audit may impact how you decide to work with the client moving forward. For example, do you continue to see the client while your records are being audited? Should the audit result in a claw back and you’ve continued to document your sessions without making any changes, you open yourself up for additional financial loss.
QUESTION 2: Cloning Notes
One of the therapists in my group practice was audited. I noticed that they use the same intervention, assessment, progress towards goal verbatim for 10+ sessions. It looks like they copied and pasted the notes. Should I brace myself for a recoupment?
What this therapist did is called, “cloning.” It’s one of the top issues that cause a claw back, so be prepared. Additionally, an insurance company might suspect that the therapist is writing notes BEFORE providing the session. This is called fraud. Check the date and time the notes were locked. This will tell you if that is the case. When we found a couple of therapists cloning notes at the clinic where I used to work, we put the therapist on corrective action. One was fired. It’s that serious. It’s OK to copy the previous note into a new note to reduce writing time. But there must be some changes. Even when progress in therapy is slow and we use the same interventions week to week, for example teaching mindfulness skills, the session will be different. The exact skill may be different and how the client uses the skill will be different, and that has to be documented. I’m sorry to be the bearer of bad news, but I want you to be able to protect your practice.
QUESTION 3: Cleaning Up Notes for an Audit
Is it considered a problem by insurance companies if you need to go back and unlock notes in order to clean them up for an audit?
It’s OK to clean up notes BEFORE receiving an audit letter. After receiving a letter, it depends on the insurance company. Some would consider it fraud, so check with the insurance company.
Changes made to notes in practice management systems are automatically tracked with a date and time stamp, but they don’t indicate what the change is or why. So, if you make a change, indicate what change you made or they won’t know and could consider it fraud. When using paper forms, tracking changes is easier because you don’t lose or delete the original text.
QUESTION 4: Responsibility of Documentation
If I leave an agency, the agency is audited and my notes result in a claw back, am I responsible for the agency’s financial loss?
If the agency is audited and your notes don’t pass, the agency is responsible. The quality of the documentation under their supervision is their responsibility. That “protection” is a benefit of being an employee.
QUESTION 5: Switching from an Agency to Private Practice
I recently went into private practice. I still have 3 clients from the agency in addition to my own 18. The agency agreed that I should continue with them. Should I have those notes in case I get audited?
What happens to client records when a therapist leaves an agency is not my specialty. I can only give guidelines. Here’s my best shot.
Although to you and the client, treatment feels like a continuation from the treatment given when at the agency, you are starting fresh, so you do not need the notes from the agency. In fact, they are the purview of the agency. They are not part of your private practice file. If you are audited, the insurance company will only be able to demand notes under your license, not from the agency. That said, you may want the client’s file to show continuity of care, but it’s not mandatory.
To be completely transparent, you can document how the client came to see you see. For example, you can write in your Diagnostic Summary or 1st Session Note, “Client was formerly at XYZ Clinic where this therapist worked and is now being seen in therapist’s private practice. Previous documentation for this client is with XYZ Clinic.”
To be on the safe side, consider discussing this scenario with the risk management person from your professional licensing company, find out the agency policy on this and/or consult with an attorney who specializes in working with psychotherapists.
Being audited can be scary, but I hope this helps clarify some of your questions. If you want to feel confident that your notes justify medical necessity, contribute to clinical thinking, and pass audits, check out my templated clinical forms. The Documentation Wizard forms are designed around a simple formula that takes the guesswork out of what and how much to write. They cue you to include everything needed and provide ways to document medical necessity that aren’t on notes in other systems.