Audit

Published on: December 2, 2025

Understanding CMS’ New WISeR Program

In a move aimed at addressing the persistent challenge of high healthcare spending, the Centers for Medicare & Medicaid Services (CMS) recently launched a new payment and oversight model called WISeR, short for “Wasteful and Inappropriate Service Reduction.” Set to begin in January 2026 and run through 2031, WISeR is designed to use artificial intelligence (AI) to identify and reduce the provision of services that Medicare deems unnecessary, duplicative, or low value. While its goals are familiar, the model marks a shift in how CMS is approaching prior authorization, technology use, and provider oversight.

For healthcare providers, WISeR represents both a policy change and a shift in operational workflow, especially for those practicing in the six participating states: Arizona, New Jersey, Ohio, Oklahoma, Texas, and Washington. Although the model is technically focused on a limited number of outpatient services, including certain spinal procedures, wound care treatments, and pain management interventions, its implications could be far-reaching.

WISeR does not alter Medicare’s coverage or payment rules. Instead, it changes the process through which specific services are reviewed before payment is made. Providers in participating states will face two main options: they can submit prior authorization requests through CMS-approved technology vendors or have claims for selected services reviewed through a more rigorous prepayment review process.

Published on: November 25, 2025

Navigating Medicare Claims Audits: A Strategic Guide for Providers

by Wachler & Associates, P.C.

For healthcare providers participating in the Medicare program, facing a claims audit can be both challenging and time-consuming. Denials are common during these audits, and when they occur, the appeals process can stretch over months or even years. Each step requires careful strategy and timely action.

Typically, a Medicare audit is initiated when a Medicare contractor requests medical records from a provider. At this early stage, it’s crucial to understand the context of the request. Identifying the type of contractor involved, whether it’s a Medicare Administrative Contractor (MAC), Unified Program Integrity Contractor (UPIC), Recovery Audit Contractor (RAC), or Supplemental Medical Review Contractor (SMRC), can provide important insight into what kind of review is being conducted. The nature of the review itself also matters: is it a pre-payment or post-payment audit? Is it part of a Targeted Probe and Educate (TPE) program, a Comprehensive Error Rate Testing (CERT) audit, or a Potential Payment Error Opportunity (PPEO) initiative? Is there a likelihood that the audit includes statistical extrapolation?

The provider’s own history and operational context can also affect the review. For instance, has the provider faced similar audits recently? Was there a recent ownership transfer? Are any necessary records held by another entity? These details may guide the provider’s next steps. Depending on the scope and risk level of the audit, providers might take proactive measures to support their claims. This could include submitting additional documentation, hiring a clinical reviewer to evaluate the claims, engaging directly with the contractor, or preparing a detailed legal response. In other situations, simply submitting the requested records and awaiting a decision may be the most prudent course.

Published on: November 20, 2025

OIG Work Plan Updates Fall 2025

by Wachler & Associates, P.C.

The HHS Office of Inspector General (OIG) recently issued several new work plan items outlining audits it intends to perform and initiative it intends to undertake. OIG investigations and initiatives can concern activities by federal healthcare programs like Medicare and Medicaid, their contractors, and participating providers. However, it is often providers who experience the downstream impacts of OIG initiatives. Healthcare providers should be aware of OIG’s enforcement priorities.

First, OIG intends to review Medicaid nonemergency medical transportation services. OIG noted that such services can pose a significant risk of fraud, waste, and abuse in Medicaid and that past OIG work has identified significant vulnerabilities in State and Federal efforts to reduce fraud, waste, and abuse involving nonemergency medical transportation in Medicaid. It appears that OIG intends to conduct targeted reviews of certain nonemergency medical transportation providers. Such providers should be prepared for increased levels of scrutiny from OIG and their local Medicaid programs.

Second, OIG intends to produce a white paper regarding fraud, waste, and abuse related to durable medical equipment (DME) in Medicare. DME has long been an area of concern for the Medicare program and federal law enforcement and OIG noted that that recent cases demonstrate that fraudsters continue to target DMEPOS billing and have developed new schemes. OIG intends to build on its extensive experience with DME fraud and provide further information about the nature of DMEPOS fraud in Medicare, key program integrity vulnerabilities, and potential actions to reduce fraud, waste, and abuse.

Published on: August 25, 2025

When Is a Medicare Audit Win Not a Win?

by Wachler & Associates, P.C.

Generally, in the Medicare claims appeal process, a determination that is favorable to the provider ends the appeal process. Only under very limited circumstances can the Centers for Medicare & Medicare Services (“CMS”) or its contractors directly appeal a favorable appeal determination. However, there are certain mechanisms that can be used to reopen, review, and change favorable determinations with which CMS disagrees.

The Medicare claims appeal process is a lengthy, complex, and administratively burdensome process for providers. It includes five levels of appeal, the first four of which are directly controlled by CMS or The Department of Health and Human Services (“HHS”) itself. First is Redetermination by a Medicare Administrative Contractor (“MAC”). Second is Reconsideration by a Qualified Independent Contractor (“QIC”). Third is review by an Administrative Law Judge (“ALJ”) employed by the Office of Medicare Hearings and Appeals (“OMHA”), a division of HHS. Fourth is review by the Medicare Appeals Council, another division of HHS. Fifth is review by a federal court.

Where a provider prevails at the ALJ review, a distinct CMS contractor, the Administrative QIC (“AdQIC”) is tasked with reviewing an ALJ decision. Where CMS, through the AdQIC, disagrees with the ALJ, in some limited circumstances, the AdQIC can directly file an appeal of the ALJ decision to the Appeals Council. However, more often the AdQIC will simply “refer” a provider’s victory to the Appeals Council for the Appeals Council to considering review of its “own” accord. The Appeals Council nearly always takes such cases and often overturns the provider’s favorable determination. CMS and/or HHS may also simply direct the ALJ, who is employed by HHS, to change the decision.

Published on: August 18, 2025

Dangers of PPEO Audits

by Wachler & Associates, P.C.

Medicare-enrolled hospice providers are under increasingly close scrutiny. Due to concerns regarding hospice compliance and with fraud, waste, and abuse by hospice providers, both the Centers for Medicare & Medicaid Services (“CMS”) and the Department of Health and Human Services Office of Inspector General (“OIG”) have stepped up audits, investigations, and enforcement actions against hospice providers. One of these measures are Provisional Period of Enhanced Oversight (“PPEO”) audits of Medicare-enrolled hospices. Providers should be aware that the stakes in a PPEO audit can be unexpectedly high, while the margin for error unexpectedly low.

CMS implemented PPEO audits as a direct response to concerns regarding hospice fraud and compliance issues. Pursuant to the PPEO program, since mid-2023, CMS audits all “newly-enrolled” hospice providers in Arizona, California, Nevada, and Texas. “Newly-enrolled” is not limited to hospice providers enrolling in Medicare for the first time, but also includes those that undergo a Change of Ownership (“CHOW”) as that term is defined under the Medicare program, those that undergo a 100% change in ownership, and those reactivating Medicare enrollment after being in a deactivated status.

PPEO audits have been compared to Targeted Probe and Educate (“TPE”) audits because, like a TPE audit, a PPEO audit can include multiple rounds of review between which the provider may receive education and an opportunity to address the issue or issues identified by the review. However, this comparison only goes so far and in practice TPE and PPEO are often very different. TPE generally consists of three rounds of review, occasionally four, and the contractor conducting the review is required by CMS rules to offer education to the provider and to wait between rounds of review to give the provider a chance to implement changes and address any issues that have been identified. Further, under TPE, providers are generally not referred to CMS for sanctions until they have failed three consecutive rounds of review by demonstrating consistently high error rates across all three rounds. TPE can, and often does, result in revocation of billing privileges, but generally not before the provider has failed three rounds of review.

Published on: July 29, 2025

Basics of the Medicare Claims Appeal Process

by Wachler & Associates, P.C.

The regulatory process for appealing Medicare claim denials and overpayments is a complex, lengthy, and administratively burdensome process. Through up to five levels of appeals, Medicare-enrolled providers and suppliers, and their representatives, must contend with inflexible deadlines, tight procedural and bureaucratic requirements, and biased reviewers, all while contesting the denials and asserting the medical necessity of the items or services at issue.

After a Medicare Administrative Contractor (MAC) has issued an Initial Demand, the letter that informs the provider of the claim denials, the reasons for the denials, and the amount of repayment demanded, the first step in appeal is Redetermination. Redetermination review is conducted by the same MAC who issued the Initial Demand and the contractor nearly always upholds its earlier decision. A provider can stop or halt recoupment of the alleged overpayment at this stage of appeal, but only if it requests Redetermination within a certain timeframe.

After Redetermination, the next level of appeal is Reconsideration. Reconsideration is conducted by a Qualified Independent Contractor (QIC), a separate Medicare contractor than the contractor that conducted Redetermination. The QIC is generally more impartial than the MAC, but often finds against the provider. A provider can stop or halt recoupment of the alleged overpayment at this stage of appeal as well, but only if it requests Reconsideration within a certain timeframe.

Published on: July 3, 2025

Are More Medicare Advantage Audits on the Horizon?

by Wachler & Associates, P.C.

The Department of Health and Human Services (HHS) and the Centers for Medicare & Medicaid Services (CMS) recently announced two major policy efforts directed at Medicare Advantage (MA) plans. As MA plans have become a significant share of the healthcare insurance market, healthcare providers are left wondering what impacts these attempts at MA reform will have on providers.

First, CMS has announced a significant expansion of its auditing efforts for Medicare Advantage (MA) plans. Beginning in May 2025, CMS began to audit all eligible MA contracts for each payment year and invest additional resources to expedite the completion of audits for payment years 2018 through 2024. These audits primarily involve Risk Adjustment Data Validation (RADV) audits to confirm that diagnoses used for payment are supported by medical records. CMS reported that it is several years behind in completing these audits, but that recent estimates suggest that MA plans may have been overpaid by several billion dollars.

If CMS demands that MA plans return significant overpayments, the MA plans may seek to pass this cost along to providers. Namely, where an MA plan experiences an unexpected expense in the form of an overpayment demand, it will likely seek to decrease its costs elsewhere. This may lead to increased scrutiny of claims billed to MA plans, meaning more audits and overpayment demands aimed at healthcare providers.

Published on: June 30, 2025

Increasing Scrutiny of Medicare Hospice Providers

by Wachler & Associates, P.C.

The Department of Health and Human Services Office of Inspector General (“OIG”) recently announced that it would closely examine data relating to new Medicare hospice provider enrollments. These efforts build on existing practices by the Centers for Medicare & Medicaid Services (“CMS”) to increase oversight of certain Medicare hospice providers.

Hospice provides palliative care and support for patients who are terminally ill and for their families. Medicare covers hospice care only where certain criteria are met, including that a qualifying physician has certified that the patient has a terminal illness and a life expectancy of six months or less. Medicare-enrolled hospice providers are also required to be certified by CMS, be licensed as required by State and local law, and meet Medicare Conditions of Participation to receive payment.

For the past several years CMS has been concerned with hospice compliance and with fraud, waste, and abuse by hospice providers. To this end, CMS has increased audits of hospice providers, adjusted the 36-month rule restricting certain sales of hospice providers, and implemented the Provisional Period of Enhanced Oversight (“PPEO”) pilot program. Pursuant to the PPEO program, since mid-2023, CMS audits all “newly-enrolled” hospice providers in Arizona, California, Nevada, and Texas. “Newly-enrolled” is not limited to hospice providers enrolling in Medicare for the first time, but also includes those that undergo a Change of Ownership (“CHOW”) as that term is defined under the Medicare program, those that undergo a 100% change in ownership, and those reactivating Medicare enrollment after being in a deactivated status. PPEO audits function similar to TPE audits, but tend to be more rushed and less forgiving in terms of the education provided to the hospice under review. Hospices under PPEO audits should treat them with due caution and take measures to ensure that their claims and documentation meet Medicare requirements.

Published on: April 16, 2025

HHS OIG Discovers What Medicare Providers Have Long Known

by Wachler & Associates, P.C.

The US Department of Health and Human Services (“HHS”) Office of Inspector General (“OIG”) recently released a report wherein it found what Medicare providers have long known, that Medicare Administrative Contractors (“MACs”) frequently commit significant errors and do not comply with Medicare requirements when they conduct audits of Medicare providers.

Specifically, OIG reviewed MAC audits of Medicare costs reports and found that, for federal fiscal years 2019–2021, each of the 12 MAC jurisdictions failed to comply with the contract requirements for audit and reimbursement desk review and audit quality for at least 1 of the 3 years. The Centers for Medicare & Medicaid Services (“CMS”) also identified 287 total audit issues among all MAC jurisdictions during that period, including MACs not performing proper reviews; inadequate review of graduate medical education and indirect medical education reimbursement; improper review of allocation, grouping, or reclassification of charges to cost centers; improper calculation and reimbursement for nursing and allied health programs; and inadequate review of bad debts.

Issues with MAC reviews are nothing new to Medicare providers. In addition to auditing cost reports, MACs also audit claims under Medicare fee-for-service and perform the first level of claims appeals, referred to as Redetermination. In regard to audits, MACs are often criticized for misinterpreting criteria, applying the wrong criteria, using nurse reviewers with little to no experience in the clinical area under review, and taking excessive amounts of time to complete reviews. However, MAC audit issues might not present such a significant issue if MACs did not also perform the first level of appeal – Redetermination – of their own audits.

Published on: April 1, 2025

What Do Changes at HHS Mean for Medicare Appeals and Compliance?

by Wachler & Associates, P.C.

Multiple changes have been announced or proposed at the federal Department of Health and Human Services (“HHS”), which will likely impact healthcare providers engaged in Medicare audit appeals and regulatory compliance activities. Although, in some ways, these changes may simply be a return to the status quo experience 5 to 10 years ago.

HHS has announced that that it will further reduce its head count and rearrange some of its many divisions. Specifically, it will cut another 10,000 full-time employees in addition to the approximately 10,000 employees that have left the department since January. The bulk of the new cuts will be to the FDA, CDC, and NIH. The Centers for Medicare and Medicaid Services (“CMS”), which oversees the Medicare program and the many Medicare contractors, is expected to lose about 300 employees. While the reduction at CMS may be small relative to other divisions, the loss of experienced decision-makers is being keenly felt as established agency norms, contacts, and priorities can no longer be relied upon. For CMS to change is not necessarily a bad thing in the long term, but it in the short term, it creates significant uncertainty among providers.

Several divisions relating to Medicare appeals and compliance are also being rearranged. The Health Resources and Services Administration (“HRSA”) is being combined with several other divisions into the new Administration for a Healthy America (“AHA”). HRSA has administered – often poorly – the Provider Relief Fund (“PRF”) and the many provider disputes related thereto. It is not clear whether this change will reinvigorate HRSA’s handling of PRF disputes, but given the policy statements of the new AHA, PRF disputes do not appear to be a priority. Further, two divisions closely related to Medicare appeals, the Office of Medicare Hearings and Appeals (“OMHA”) and the Departmental Review Board (“DAB”), will both be reassigned under a new assistant secretary of enforcement. OMHA and DAB already work together closely, so providers in the various Medicare appeals processes are unlikely to experience significant disruption from this change.