PBM, Medicare, Medicaid, and commercial payor audits, nationwide.
Healthcare audits arrive from three categories of payors. PBM audits (OptumRx, CVS Caremark, Express Scripts, Humana, Prime, MedImpact, Navitus) operate under network participation contracts and produce recoupment demands plus network termination risk.
Medicare audits (UPIC, RAC, MAC, SMRC, CERT, MEDIC) operate under the CMS Program Integrity Manual and produce statutory recoupment plus referral exposure to HHS-OIG and DOJ. Commercial payor and state Medicaid audits operate under their own contracts and regulations. Each audit type has its own procedural framework, its own appeal track, and its own enforcement consequences.
Health Law Alliance defends healthcare audits across pharmacies, physicians, hospitals, home health, hospice, DME, and wound care providers nationwide. Our defense framework runs from the document request response through every applicable appeal track and any parallel False Claims Act or criminal referral that follows.
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Prepayment review can stop cash flow on every new claim within days. Postpayment review with statistical extrapolation turns a 30-claim sample into a multi-million dollar recoupment demand across the full claim population. The auditor's referral authority (PBM to network termination committee; CMS contractor to HHS-OIG and DOJ; commercial payor to state Medicaid Fraud Control Unit) converts what looks like a billing audit into a network exit, an FCA matter, or criminal exposure. The defense posture has to address all three from the document request response forward.
Medicare prepayment review means CMS pauses payment on every new claim until the contractor reviews and approves it (60 to 180 days per claim, sometimes 18 to 36 months in multi-year postures). PBM "audit-pending" status produces a similar cash flow effect on the PBM side, with claims held until the audit closes. Most pharmacies and practices cannot operate through extended cash flow suspension without external financing. The defense focuses on getting off prepayment or audit-pending status as quickly as the substantive defense allows, often through a sustained low error rate showing or a corrective action plan that the auditor accepts as resolution.
Both Medicare contractors and PBMs use statistical extrapolation in postpayment review. The auditor reviews a sample (often 30 to 50 claims), calculates an error rate, and extrapolates the error rate across the full claim population for the audit window. A $50,000 sample finding can produce a $5M to $20M recoupment demand after extrapolation. CMS withholds payment on incoming Medicare claims and PBMs offset future reimbursement to recoup, both of which compound the cash flow exposure. The largest dollar defense in most postpayment matters is the statistical methodology challenge: sample frame defects, sample size deficiencies, methodology errors, and statistical formula objections.
PBM audit findings above an internal threshold materially increase the probability of network termination, either at the next contract renewal or through an immediate "for cause" termination. Medicare contractor findings can be referred to HHS-OIG, the DOJ Civil Division, and the local U.S. Attorney when the findings produce evidence of intent. The civil FCA referral surfaces as a Civil Investigative Demand. The criminal referral surfaces as a grand jury subpoena or a target letter. The audit is rarely the end of the matter when the findings cross the referral threshold; coordinating audit defense with parallel network, FCA, and criminal defense from day one is essential.
Healthcare audits operate under the specific regulatory or contractual framework of the payor that issued them. PBM audits run under the network participation contract and applicable state PBM laws. Medicare audits run under the CMS Program Integrity Manual and the federal administrative appeal track. Each track has its own statistical methodology, its own deadlines, and its own referral authority. Defense counsel that does not know the framework misreads the procedural posture and the realistic exposure.
Our bench includes a former Assistant U.S. Attorney with DOJ Director's Award recognition and senior healthcare-company counsel. We have defended audits from PBMs (OptumRx, CVS Caremark, Express Scripts, Humana, Prime), CMS contractors (UPIC, RAC, MAC, SMRC, CERT), and commercial payors. We have produced statistical extrapolation reductions in postpayment matters, network termination reversals, and coordinated audit defense with parallel False Claims Act and criminal exposure. This is the protocol.
From the day the contractor's notice arrives: identify the contractor type (UPIC, RAC, MAC, SMRC, CERT), evaluate the audit type (prepayment review, postpayment review, focused medical review, automated review), the claim window covered, and the document request as written. Most document requests can be narrowed through written response on scope and timing. We conduct a privileged pre-production review of every document before it leaves the practice, which preserves defenses for the appeal track and avoids producing material that becomes evidence in any subsequent FCA or criminal matter.
When the contractor issues findings: respond on the substantive defense for each flagged claim and challenge the statistical methodology where postpayment extrapolation is used. The methodology challenge focuses on sample frame defects, sample size deficiencies, RAT-STATS application errors, and Cochran formula objections. A successful methodology challenge at this stage often reduces the recoupment demand by a meaningful percentage before the matter reaches the formal appeal track.
The Medicare appeal track requires the right record at every level. We draft and file the redetermination request to the MAC within the 120-day window, prepare the QIC reconsideration with the substantive and statistical record, and present to the Administrative Law Judge with witness preparation, expert testimony where applicable, and a procedural record built to support the ALJ's decision. The record built at the redetermination and QIC stages is the record the ALJ reviews; defense counsel that skips ahead loses the procedural foundation.
When Medicare audit findings produce a referral to HHS-OIG, the DOJ Civil Division, or the local U.S. Attorney's office: civil FCA defense (CID response, intervention or declination engagement, Rule 9(b) motion practice) and criminal defense (target letter response, attorney proffer, grand jury subpoena management) run in parallel with the Medicare appeal. Our former-federal-prosecutor bench coordinates the Medicare appeal, the civil FCA matter, and the criminal track as one matter to avoid locking in admissions in one forum that hurt the defense in another.
PBMs, CMS contractors, and commercial payors all use data analytics and external referrals to identify providers for audit. The triggers below are the most common predicates across audit types.
Outcomes are summarized for confidentiality. Client names, precise geography, and identifying facts are redacted.
Recoupment Reversed
Provider received a postpayment review finding with statistical extrapolation across a multi-year claim window. Health Law Alliance challenged the contractor's sample frame, sample size methodology, and RAT-STATS application errors at the redetermination and QIC reconsideration stages. The extrapolated recoupment demand was reduced to the actual sample-claim amount, a small fraction of the original number. The procedural record built at the redetermination level supported the QIC's reduction without requiring an ALJ hearing.
DOJ Declination
Healthcare company received a Medicare contractor referral that produced a Civil Investigative Demand from the DOJ Civil Division covering alleged $6M in false claims. Health Law Alliance produced documents under a negotiated rolling schedule, presented the factual rebuttal of the government's theory in a meeting with the line attorneys, and prepared a written submission addressing the materiality and falsity defects. DOJ declined both civil intervention and criminal referral. Pre-unsealing engagement, when the matter surfaces through other channels, is the highest-leverage window in any FCA matter.
Indictment Dismissed
Solo physician faced a multi-count federal indictment that included healthcare fraud counts following an upstream Medicare contractor referral to the local U.S. Attorney. Health Law Alliance filed responsive motions, built the procedural record, and challenged the government's theory through pre-trial motion practice; the indictment collapsed before trial. The Medicare-audit-to-criminal escalation risk is real in matters where the contractor's findings include intent evidence; a unified defense across the appeal track and the parallel criminal track is the most efficient way to avoid the criminal exposure.
Attorney advertising. Prior results do not guarantee a similar outcome. Case summaries are generalized for confidentiality and are not a substitute for legal advice on your specific matter.
Anthony's background as a former federal prosecutor and executive for major healthcare companies provided a level of expertise and insight that made all the difference. His deep understanding of healthcare law, particularly in litigation and compliance matters, helped navigate complex legal issues with ease.
Seven questions that come up on almost every first call. The answers below are general; specific situations require privileged consultation.
Before you produce documents to the auditor, before the sample is drawn for extrapolation, before the matter escalates to a network termination or DOJ referral, have a privileged conversation with attorneys who defend healthcare audits across PBM, Medicare, Medicaid, and commercial payor matters. Free, confidential, no retainer.
