According to the American Hospital Association's RAC Trac survey for the fourth quarter of 2013, 68 percent of hospitals reported spending more than $10,000 managing the RAC process, while 50 percent spent more than $25,000 and 12 percent spent more than $100,000. It doesn't stop there.
Beyond RACs, Medicare, Medicaid, third-party payers and health plans continually conduct other retrospective review audits, taxing staff resources and raising revenue cycle concerns.
For Donna Brock, RHIT, System HIM Audit & Privacy Coordinator at Lee Memorial Health System, audit requests come from multiple directions, including three different RACs, three MACs, CERT, PERM, ZPIC, MIC, SMRC, MP QAI, HEDIS and more. "While the RACs took a summer break, CMS did not!" Brock says.
With more than 1,420 beds, and over one million patient contacts each year, Lee Memorial Health System is Florida's largest public health system, receiving no direct tax support.
At Lee Memorial, Brock says, the key to keeping audit management costs under control is threefold:
1. Having proper flow charts and procedures in place;
2. Centralizing audit management across the organization to keep staff focused; and
3. Implementing a comprehensive software application that can manage all types of audits and keep audit data clean (ensuring data integrity is a key piece across the organization).
Centralization reduces man hours
In much the same way that central business offices (CBOs) increase efficiency and reduce operational costs, the implementation of a centralized audit management team simplifies workflow while boosting productivity.
Cutting costs is all about using staff more efficiently and, as a result, reducing time spent on audit management across the entire organization. Centralization pulls time-consuming audit tasks from multiple areas and departments into one area and one focused audit team.
Each department gains efficiencies by offloading audit tasks. While the centralized team becomes more productive over time as they get deeply entrenched and knowledgeable in all the various audits.
Consistent audit workflows and procedures must also be established to ensure a "lean" audit management process. Continual process improvement makes the centralized audit team more efficient and more productive over time. As centralized audit management teams mature, Brock recommends they regroup, review audit data and plan workflows to keep up with auditor changes in practices and targets.
Audit technology supports cost reductions
Once centralized, a consistent audit management technology platform brings together all the various audits and their associated data. "With audit data, it truly is garbage in, garbage out," explains Brock, who insists on the use of comments for each case, such as date and time the auditor received the records. "Having strong data minimizes emails back and forth between departments; increasing focus and saving everyone involved time and money."
For Prudence Budemer, RN, Director of Clinical Reimbursement, Christus Health, a centralized audit software package streamlines audit documentation. "Before we used a centralized audit software package, it took 30 minutes to enter data about an audit. Now, it takes two minutes per audit. Every minute saved reduces cost."
The best defense is a strong offense
Another way to cut costs going forward is to use RAC data for proactive denial prevention. The higher percentage of "favorable" decisions for an organization, the fewer additional documentation requests are made going forward.
Lee Memorial analyzes audit data to better define RAC targets and pinpoint their own internal clinical documentation improvement (CDI) team efforts. "We've been able to achieve a higher dispute win percentage, further contributing to a reduction in overall audit management costs," Brock concludes.
"Audit reporting is the most important reason to use a centralized audit software package, as long you are using the software correctly."
Budemer recommends three steps to reduce audit administrative burdens, while increasing proactive management and audit data integrity (correct dollars, timeframes, etc.).
1. Review your data and reports, distribute knowledge to all locations;
2. Identify key targets (e.g., total joint replacements); and
3. Work with CDI, HIM and clinical teams to improve documentation and reduce audits going forward.
As the first CMS filing date for new ACA enrollees approaches (April 2015), providers need to be prepared for more record requests due to so many new plan enrollees, and a flood of new plan members from open enrollment periods. Keeping one step ahead is less expensive than trying to catch up.
Leaning the Process
It's not just about technology, cutting costs and reducing the administrative burdens associated with revenue audits it's also about having a dedicated team focused on learning and LEANING the process. While every facility is different, all can cut audit expenses by centralizing audit management, studying audit outcome data, and proactively implementing documentation, coding and billing improvements to mitigate future audit risk.
Dawn Crump, MA, SSBB, CHC, has been in the healthcare compliance industry for more than 18 years and joined HealthPort in 2013 as Vice President of Audit Management Solutions. Prior to joining HealthPort, Ms. Crump was the Network Director of Compliance for SSM. Trained as a Six Sigma Black Belt, Ms. Crump used this holistic, fact-based approach to establish audit tracking (RAC) programs. Her expertise includes coding and billing compliance as well as HIPAA compliance and government audit programs for acute care facilities. She is a former board director of the Greater St. Louis Healthcare Finance Management Association chapter and currently serves as the networking chair. Ms. Crump is also a member of the Health Care Compliance Association (HCCA).
The views, opinions and positions expressed within these guest posts are those of the author alone and do not represent those of Becker's Hospital Review/Becker's Healthcare. The accuracy, completeness and validity of any statements made within this article are not guaranteed. We accept no liability for any errors, omissions or representations. The copyright of this content belongs to the author and any liability with regards to infringement of intellectual property rights remains with them.