In the ever-changing world of healthcare IT, there’s never a dull moment, especially where government and commercial audits are concerned. 2015 was no exception. Despite the RAC hiatus, the year witnessed many audit updates, activity and adjustments. Here are some key highlights from my Audit Insight blogs over the past year:
Building audit awareness and education
Providers struggled with fielding a new myriad of commercial payer requests for information—including a surge of requests from health plans. Education was the key to understanding each audit—the vernacular use within each request and the general intention of each audit. Knowing more about each commercial audit helps providers know what specific data needs to be retrieved and if that data, once gathered, can be used for several different purposes.
Since providers and payers speak different languages, a little education on both sides goes a long way towards improving audit communication. The more payers and providers understand each other’s audit workflow, the easier it becomes to eliminate redundancies and lean the process.
Here are three best practices for providers to implement during the audit process to facilitate smoother payer-provider communications. These tips are part of a longer article that I recently co-authored with Jeannie Hennum, Senior Vice President of Sales and Account Management, ChartSecure at HealthPort, as published in HFM magazine.
- Know which auditor is requesting information and exactly what documents should be provided to avoid revenue recoupment.
- Define where each piece of information is located (some may be in electronic systems while other documents will be paper-based), when information is due, and under what terms.
- All data from each request and submission should be entered into a centralized audit management software application, which helps providers manage requests, track audit activity, maintain a record of all documents sent and keep up with audit trends.
From the payer perspective, when providers respond with inaccurate data regarding patient, procedure and/or place of service, the payer must dedicate additional man hours to track down the correct information. Payers could smooth the process by making sure their request letters are as clear and succinct as possible. They should also recognize that payer audits aren’t the only medical record requests that hospital ROI staffs must process.
A shift in perspective on both sides makes all the difference. Instead of viewing audits as a necessary evil, both parties should consider them a gateway for improving communication and long-term relations.
Audits to watch
With regards to specific commercial audits, I suggest knowing more about these specific audits in 2016. They are summarized in my Healthcare Finance News article, available here, and include:
- Risk Adjustment and Medical Record Reviews (MRRs)
- Medicare Advantage Risk Adjustment Data Validation (RADV)
- Health Effectiveness Data & Information Set (HEDIS)
- DRG Payment Integrity Reviews
- Care and Quality Improvement Audits
- The Five-Star Program
As these health plan audits continue to consume valuable HIM and audit team resources in 2016, providers should focus on ramping up release of information (ROI) support, audit education, and audit management technology.
Lawsuits and special committees
The CGI Federal Inc. versus CMS lawsuit continued in 2015. One year and several legal battles later, RAC activity continues but in a limited capacity. The new RAC RFPs are out and the contracts are expected to be awarded in early spring 2016 barring no additional lawsuits. The new statement of work includes several improvements to aid providers in their management of the audits and appeals. The slow down RAC activity gave hospitals and health systems time in 2015 to work appeals, refine audit processes and workflows, centralize audit programs, and improve clinical documentation for known RAC targets.
2015 RAC regulatory news also served to corroborate the relationship between audits and increases in claim denial activity—underscoring the importance in successfully minimizing audit take-backs. A May hearing before the Senate Special Committee on Aging explored the relationship between RAC audits and an increase in claims for hospital observation stays. CMS officials stated they have already shifted the focus of RAC audits to providers with high levels of claims denials. They also stated that future RAC audits will increasingly target providers with higher claims denial rates.
For providers, this means improving their existing audit systems helps the bottom line in the near term, while also reducing chances the provider will be singled out via future audits related to past transgressions.
The ugly reality of audits
Thirty-nine percent of hospitals report increased administrative costs associated with audits, according to the AHA RACTrac survey, fourth quarter 2014. Yet, the same survey found that 55 percent of medical records reviewed don’t include an overpayment. In addition, hospitals are appealing denials only to find out that they are correct the majority of the time.
Fifty-five percent of hospitals report that RAC audits and delays in the appeals process have created significant issues with the availability of capital resources, according to the September 2014 AHA survey. Forty-two percent say that RAC-related expenses have delayed other key priorities for the hospital.
This means hospitals spend limited and valuable resources on auditing efforts rather than on critical patient care only to find out that their billing practices are compliant. Hospitals are never reimbursed for costs associated with staff time spent fulfilling an audit request. That’s why it’s important to stretch every audit management dollar possible.
Keys to understanding Two-Midnight Rule changes
Finally, I shared information on the evolving two-midnight rule during 2015. Congress’s moratorium on Recovery Auditor patient status reviews expired on October 1, 2015, and quality improvement organizations (QIOs) have taken on the task. For more information about how the QIOs will be involved, read my recent article on RAC Monitor here.
As these changes and more go into effect in 2016, please keep visiting my blog as you prepare for another busy year of commercial and governmental audits.