Hospital reimbursement from all payers is at risk

Take proactive approach to responding to auditors

If your hospital has been focusing solely on improving Medicare records in preparation for the permanent Recovery Audit Contractor (RAC) program, you may find yourself in a bind as other payers roll out their own audit programs.

"There has been a lot of emphasis on the RACs, but in Pennsylvania, we've experienced other audits, and it's just a matter of time before other state Medicaid organizations and other commercial insurers are going to roll out their audit programs. It's no longer just Medicare reimbursement that's at risk; it is truly an organizational risk across all payers," says Charleeda Redman, RN, MSN, ACM, director of corporate case management for the University of Pittsburgh Medical Center (UPMC).

Hospitals should prepare for the MICs and the commercial auditors in much the same way as they have been preparing for the RACs, and develop an organized group, similar to the RAC committee, with well-defined roles with each discipline, says Brian Flood, CHC, CIG, Esq., managing director for KPMG LLC.

The committee should start immediately to get a coordinated plan in place to respond to the MICs and other auditors before they start getting requests for information because the response time is likely to be very short, he adds.

Develop a committee

To prepare for the audits, UPMC developed a steering committee made up of representatives of key departments including health information management, coding, care management, finance, compliance, and risk, Redman says.

The committee diagrammed the document flow for all audits, including the agencies involved. The group developed an internal process that includes tasks, tools, and turnaround time for all appeals.

UPMC has a dedicated staff for the appeals process specific to the external audits. The current scope of work is handled by a 0.5 FTE RN and a 30-hour-a-month physician who handles medical necessity appeals. The audit work is only a portion of the work done by those individuals, Redman says.

Facilities that focus on responding to just one type of audit are not going to be successful in the end, because the various auditors may use different criteria, Redman points out.

"The time frames are different. The roles are different, and the addresses where you send your responses are different. If you can't automate your response system, it will be difficult to manage," she says.

It is essential for hospitals to develop a comprehensive electronic system that can define the record request by type and track the deadlines and responses, Redman suggests.

"So many software vendors are focusing on RACs and Medicare, and they don't offer the ability to track three different audit types. That is going to be essential as the MIC audits and those by commercial insurance are rolled out," she says.

Hospitals that are part of a health care system should develop a process to oversee the responses to make sure they are covered systematically, rather than by each individual hospital, Flood suggests.

The team at UPMC has created a central department to handle all record requests and appeals from each facility.

"We're working to change the initial requests for documents so they come to a central area. Once we get a letter, we enter who the auditor is and what the request is. This method will give us the ability to drive the work flow to the area that can respond and track where the charts need to be sent and the time frame," she says.

For instance, if an audit determines that a payment was improper, the letter is forwarded to health information management to review and respond if it's a coding issue. If it's a care management issue, it's sent to care management.

Redman's department handles any issue related to medical necessity, quality, and continuity of care.

Make sure that any letters that come into the system are immediately sent to the area that is responsible for responding, Redman says.

"The clock starts ticking from the day the letter is sent out. If you don't manage the process, you can't meet the deadlines and have no ability to appeal," she says.