While often framed as routine “audits” or “requests for information,” such investigations should always be taken seriously, as they can escalate into recoupments, network termination, licensure scrutiny, or even referrals to the Office of Inspector General (OIG) or the Department of Justice (DOJ).
Understand the Scope of the Investigation
Carefully review the insurer’s correspondence. Determine whether the request involves a single patient complaint, a targeted claim review, or a broader pattern-based investigation. Pay close attention to deadlines, the claims, or dates of service under review, and whether the insurer is requesting medical records, billing data, written explanations, or interviews. Failure to respond fully and on time can be cited as non-compliance.
Do Not Respond Hastily
Even well-intentioned explanations can inadvertently create inconsistencies or admissions that increase exposure. Before submitting any records or written statements, review internally to ensure documentation is complete, legible, and consistent with billed services. Never alter or add to records after receiving notice of an investigation; doing so can significantly worsen the situation.
Involve Appropriate Expertise Early
Consulting your professional liability carrier, healthcare counsel, or a qualified compliance professional early in the process is often advisable, particularly if the complaint alleges overutilization, medical necessity concerns, or improper billing. Legal counsel can help frame responses accurately, ensure that disclosures are limited to what is required, and assess whether the investigation signals increased regulatory risk.
Maintain Professional, Objective Communication
All written responses should be factual, concise, and professional. Avoid defensive language, emotional reactions, or speculation about the complainant’s motives. Stick closely to clinical facts, established standards of care, and payor policies in effect at the time of service. If treatment decisions required clinical judgment, explain the rationale clearly and reference documentation in the medical record.
Preserve Internal Controls and Documentation
Insurance investigations often expose documentation or billing weaknesses unrelated to the original complaint. Use the investigation as an opportunity to review internal processes, including coding accuracy, documentation standards, informed consent practices, and complaint-handling procedures and make necessary changes.
Know When an Investigation May Escalate
If an insurer identifies patterns of concern, the matter may expand beyond the initial complaint. Indicators of escalation include requests for large data sets, extended look-back periods, or referrals to government agencies. At this stage, coordinated legal and compliance strategy becomes essential.
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Disclaimer: The information contained on the PICA Blog does not establish a standard of care, nor does it constitute legal advice. The information is for general informational purposes only. We encourage all blog visitors to consult with their personal attorneys for legal advice, as specific legal requirements may vary from state to state. Links or references to organizations, websites, or other information is for reference use only and do not constitute the rendering of legal, financial, or other professional advice or recommendations. In the event any of the information presented conflicts with the terms and conditions of any policy of insurance offered by ProAssurance Insurance Company of America, the terms and conditions of the actual policy will apply. All information contained on the blog is subject to change.