Be your own worst critic: The art of a self-audit
Be your own worst critic: The art of a self-audit
Exams strengthen compliance program
Just as jet pilots use flight simulators to hone their flying skills or potential medical school students cram with sample MCAT exams before facing the real thing, your practice can be prepared for the scrutiny of HCFA's compliance regulations through a regular self-audit.
"Self-initiated audits and reviews play an integral role in an effective compliance program," says Alice Gosfield, JD, president of Alice Gosfield & Associates, a leading Philadelphia-based health care law firm.
Audits serve a slightly different function from a review, notes Gosfield. "An audit examines past billing practices to determine whether such practices conform to prevailing standards," she says. "A review, however, is more neutral and less threatening. A review might encompass past, present, and future billing practices. Either way, continuous review is part of any successful compliance program."
When planning either an internal audit or a review, practices should consider using outside experts to plan and conduct them, Gosfield recommends. "For one thing, they require a degree of detailed scrutiny which can distract employees from their regular daily activities," she says.
Also, outside consultants can bring a higher level of expertise in specialized areas like medical coding and billing than that found in most operations, as well as a degree of objectivity almost impossible to expect of employees.
The first step in planning a productive audit/ review is to determine what you want to focus on. "It is not necessary to give every area of the practice the same scrutiny," says health care consultant Cathy Tester, Tester & Company, Washington, DC. You can, for instance, focus first on those areas that have been identified as potential internal problems or have come under general industrywide scrutiny from federal investigators.
Another approach is to take a pre-review sample of several billing and claims areas to help identify places where more in-depth investigation may be needed. An initial review using a small sample of data usually is more efficient than a sweeping search that examines 200 to 300 claims over a several-year period, says Tester.
Also, keep in mind that different kinds of statistical sampling techniques serve different purposes. Any variety of techniques can be used to conduct an audit/review. Some of the most common tools include random sampling, pattern audits and reviews, and statistically valid studies.
A random sampling helps to determine problem areas and is generally very useful. Sometimes, however, a random sample will not illustrate the full problem. On the other hand, a pattern audit or review helps identify areas that a random sampling may overlook. A statistically valid study serves a more narrow purpose, and is usually necessary only as proof in court.
Another key player in such self-audits is your attorney. "Before starting an audit or review, it is wise to consult your lawyer. This is especially important if the audit is in response to a governmental inquiry," stresses Gosfield.
Attorney-client privilege and the work-product doctrine can protect some of the information discovered in your audit from disclosure, Gosfield says. "Plus, your attorney will provide valuable guidance on potential liability and obligations and disclosure of what is found."
So what if the worst happens and your self-audit unearths some potential overpayments made to your practice? The rules vary as to legal obligations governing how much of this information has to be disclosed and to whom, but the basic rule is that the practice has to disclose any Medicare or Medicaid overpayments it discovers and pay back the money. "If you fail to comply, it is a felony," says Gosfield.
However, the routine identification of a simple erroneous overpayment does not mean this information has to be directly communicated to HCFA, the Office of the Inspector General, or the local U.S. Attorney. In the absence of fraudulent or criminal activity, repayment of any overpayments can simply be made to your Medicare carrier. When making the report, indicate the nature of the error, the amount involved, how restitution was made, and what corrective actions (if any) were instituted to stop the error from happening again.
"This kind of thorough documentation will earn you big brownie points and goodwill with investigators should there ever be future questions about this or other payments," says Tester.
Even if you find a major problem, most experts advise immediately reporting the problem rather than trying to cover it up and hoping no one finds out about it. "This may be counterintuitive because the worse the problem, the greater the inclination to tread slowly," says Lewis Morris, JD, a lawyer in the HHS' Office of Inspector General.
"We are more inclined to work with those who come to us than when we uncover a case of suspected fraud on our own," says Morris. "Our goal is to recover overpayments and install systems that will prevent the same problems from happening again, not to put people in jail for making a billing mistake. "
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