Building a profitable compliance plan
Building a profitable compliance plan
Securing an adequate budget for compliance programs presents a challenge for compliance officers because it is very difficult to demonstrate added value. Kathleen Burke Merlo, director of compliance at the St. Louis University Medical School, recently outlined how her organization managed to accomplish just that by turning its existing billing processes into a compliance program.
According to Merlo, who outlined the program in a Health Care Compliance Association audio conference, the hospital did not set out to design a compliance plan that would make money. "Our focus was not initially on profitability," she says. "It was on building an organizational process that would work and improving our efficiency, accuracy, and effectiveness."
However, the hospital eventually managed to turn a billing process into a compliance program while at the same time reducing costs. The billing process efficiencies resulted in an increase in revenues, says Merlo.
Merlo says the effort was initiated in 1995, when management indicated that a significant problem existed regarding lost charges. "We had doctors carrying around billing cards in their pockets that never ultimately made it to the desk of anyone," she says.
Merlo says the first step was to determine how to account for all of the patients and go about finding lost charges. Initially, the hospital focused all of its efforts in the inpatient area. She points out that schedules can be used as a tracking mechanism for outpatient visits and procedures. "On the inpatient side, it is a little more difficult," she argues.
That problem is compounded when an organization does not know who all of its patients are until they arrive, as was the case in her facility, she adds.
Several challenges quickly arose, Merlo says. For one thing, a hiring freeze prevented any new positions for this project. In her capacity as business manager, Merlo was able to use two employees who had been the "middle men" between the central billing office and the physician division requesting additional information for claim denials. Those two people were used as a pilot staff for the program.
"We also had a marvelous opportunity to use technology to support what we were doing," she says. A decision was made to use a network manager to test new ideas on the hospital’s ACCESS database, which then was used to create a program called Internal Medicine Patient Account Tracking (IMPACT).
Merlo says the key to recovering lost charges was tracking what services were provided. Hospital registration staff were used to provide a list of all patients who had been admitted the day before. Admissions staff also inserted a discharge day, and that information was transferred as an update.
The problem of inaccurate data also quickly surfaced. Initially, the hospital used parallel systems by having the regular billing process utilize encounter forms that were sent to a central billing office where the charge was entered. To reduce keystroke errors, Merlo says the pilot program used a fee-abstraction process using just one division.
"We immediately noticed that the number of keystroke errors was reduced," she reports. Those errors included wrong date of service and two charges for the same date of service. It was not as common to find an error in the CPT code, she adds.
Using parallel systems proved very effective because it helped demonstrate how much "faster and cleaner" the new IMPACT system would be, says Merlo. "By the end of three months, it was very clear that we were on the right track," she says.
The parallel systems also made it easier to transition when the hospital moved from sending the encounter forms to the central billing office. Using the ACCESS database, the hospital configured the process so that information could be received from anywhere and sent in a compatible format.
"The system itself was very simple," Merlo says. Moreover, it did not cost anything, because St. Louis already had the people on board who could write the scripts that were required.
Eventually, four fee abstractors developed a shorthand for common diagnoses, such as congestive heart failure, that were repeatedly used, Merlo says.
The program also developed the use of a special CPT code that was called the "unbillable code." While that was one of the more controversial steps, Merlo says it was useful to have a code that could be used internally to track what was billable and unbillable.
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