Preparing for a Medicare Audit: Tips for Mental Health Providers
There is a lot of buzz around the word we all dread: audit. Let’s be honest, Medicare audits can stir up anxiety and confusion, but they don’t have to.
However, audits aren’t special to Medicare - every insurer checks in on records periodically. I’ve been through them (yes, even Medicaid!), and I can tell you it’s much easier to prepare in advance. Audits really aren’t as scary as they sound, and you can feel empowered, not fearful, in your clinical work.
Remember, you’re the expert in the room.
Why Medicare Audits Matter for Mental Health Practices
A Medicare audit reviews your records and billing to verify that your practice follows program requirements and regulations.
These audits check that therapists provide services accurately, bill correctly, and meet documentation standards. Medicare requires honest reporting, billing only for services performed, and justifying medical necessity.
Why should mental health providers care?
Because non-compliance can mean denied claims, recoupments, or even fines.
Staying up to date with audit expectations protects your practice and your patients. Gain additional clarity and context on compliant documentation here.
What Causes a Medicare Audit? Documentation Mistakes to Avoid
Medicare likes to spot-check patterns that seem off. Audits often check therapists for:
Missing or incomplete documentation.
Billing higher-level codes without matching notes.
Repetitive or "cookie-cutter" session notes.
Unusual billing frequency or durations.
Gaps in demonstrating medical necessity.
Errors like these invite extra scrutiny.
Don’t work from a place of fear - work from a place of preparation! Avoiding these triggers means reviewing your documentation habits and revisiting your billing flow (find more time-saving tips for Medicare coding here.)
Your best defense?
A strong documentation routine and a clear understanding of what counts as a billable service.
Whether you’re a newer therapist or a seasoned provider, establishing sound billing practices helps your business thrive. You’ll find a helpful walkthrough on this in the guide to Medicare billing.
How to Prepare for a Medicare Audit: Tips for Documentation
Getting Medicare documentation right isn’t just about legal safety; it also supports clinical quality. Here’s where most therapists trip up and best practices to document correctly, the first time!
Always document start and end times. Auditors often catch this error because the session length must match what you bill. For example, if you bill 90837, your note must show you spent at least 53 minutes.
Bill for exactly what you do. Some therapists underbill out of fear - don’t! You must bill the service you actually provided (I.e., billing 90834 when you spent 55 minutes is just as wrong as overbilling).
Track client progress in each note. Document how the client presented, what interventions you used, how these relate to goals, and what changed. Show progress or barriers, not just activity.
Show medical necessity. Every note should clearly explain why your client needs therapy and how their mental health impacts their daily life and functioning.
Appropriate billing for setting and level of care. Outpatient services have limits. If a client requires more sessions regularly, they may need a different setting.
Need more in-depth examples or formats? Consider using template tools as part of your workflow.
Medicare Audit Letter? What to Do Next
If you get that dreaded audit letter, stay calm. Audits are a normal part of our profession.
First, review what documentation is requested. Always respond by the required deadline. Organize your records by date of session, making sure each note is legible and complete.
If you find gaps or unclear notes, don’t alter existing records, but do prepare a summary sheet or additional explanation if needed. Sometimes, you may be allowed to clarify a note with an addendum, as long as it’s clear, dated, and signed.
If the audit identifies issues, you can often appeal or request reconsideration. For detailed steps, refer to APA’s guidance on responding to Medicare audits. You don’t have to figure it all out alone.
Get Audit-Ready with Expert Support
Need an expert set of eyes on your documentation and billing systems?
Book a free discovery call with me to customize a sample audit and identify potential risks. Proactively preparing your practice is the best way to ensure compliance and peace of mind.
Medicare audits may never be on your wishlist, but they don’t have to control your work. Clear, timely, and accurate notes protect your license and maintain a stable practice.
Remember, you’re capable and well-equipped. Stay prepared, stay confident, and continue to provide excellent care.
Gabrielle Juliano-Villani, LCSW, helps healthcare organizations, online platforms, and mental health providers navigate Medicare & Medicaid with confidence. With over a decade of experience supporting mental health providers in navigating billing, compliance, and documentation, she now offers consulting and training to help others grow sustainable, compliant practices.