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I have received an audit letter from a health fund or Medicare

03 June 2020

Dr Annalene Weston, dentolegal consultant at Dental Protection, looks at why health fund audits occur and what practitioners can do to protect themselves

When receiving an audit letter from a health fund, the first thing people ask is “why me” – which is both simple and complex to answer. Some audits are completely random, with no reason for the selection of that practitioner.

However, many audits occur because the dentist is an outlier: this term refers to their item code usage standing out from the normal pattern when plotted against all other dental practitioners’ usage. They are either providing more treatment codes per patient per appointment, or more of a certain procedure code type than their colleagues.

The health funds and Medicare are essentially looking for the inappropriate use of codes, and are commonly seeking ‘upcoding’, which is a type of fraudulent behaviour whereby the dental practitioner enters a code that carries with it a higher financial reward than the correct code that describes the work that they have done.

An example of this would be coding a prophy as 114 instead of 111. Naturally, it is not only providers who misuse codes, with patients and practices also undertaking in this, without the knowledge or consent of the provider. A commonly occurring example of this is a patient requesting a practice to bill through several fillings rather than a crown because their health fund does not cover crown costs, and essentially the practitioner will get paid the same. Needless to say, the health funds perceive this to be an inappropriate billing.

Audits are looking at the administrative aspect of the procedure, not the treatment itself. Using a standard battery of codes because your practice directs you to is not considered a defence. Many practitioners are unaware that their practice is manipulating the codes charged to a patient. More are unaware that they are responsible for any codes billed under their provider number, regardless of whether a colleague (such as an OHT) provided the treatment, and regardless of their payment arrangement with the practice owner. If the coding is deemed inappropriate, then the owner of the provider number is required to refund the health fund or Medicare the full amount that was claimed.

What steps can I take to protect myself?

There are several ways of protecting yourself from a health fund or Medicare audit.

First, make sure that you understand the terms and conditions of each specific scheme, so you understand how and why you are entitled to claim that money. If you do not utilise the codes correctly then essentially your claim is incorrect or inappropriate, and the health funds are entitled to request a clawback of monies for claims that are inappropriate or incorrectly put through.

Once you familiarise yourself with the requirements of the scheme you are claiming under, it is also helpful to do this with the ADA glossary to make sure you are using the correct codes at the correct time. The only way to verify the appropriateness of the work that you have provided is through your clinical records; many practitioners fall foul of health fund audits by not being able to evidence that their decision-making was clinically appropriate.

While add-ons such as intraoral photographs can be incredibly invaluable – in showing a lesion on a tooth, for example – there is no substitute for thorough clinical notes that set out what you saw on that day, what diagnosis you reached, what treatment you recommended, why and how you discussed this with the patient or family. These notes will always enable you to meaningfully respond to a health fund audit, so essentially if you wish to get your house in order, reviewing your record-keeping is always a fantastic place to start.

Finally, it is prudent to have some oversight of what codes are being charged through on your provider number as, ultimately, if these codes are deemed inappropriate, you as the owner of the provider number will be liable for any clawback.


Ensure you understand the terms and conditions under which you are entitled to claim

This includes reviewing your HICAPS agreement, if you utilise a HICAPS machine

Ensure that you have some oversight of the codes being put though on your provider number

Familiarise yourself with the definitions for each code under the ADA glossary


Be creative in your claiming/code use


You can also listen to our podcast series for further guidance and advice. 

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