Baseline audit critical to compliance program
Baseline audit critical to compliance program
Determining weakness is the first step
So, your organization has committed to developing a compliance program. With such a daunting task ahead, where does one begin? A logical starting point would be to conduct a baseline internal audit of your hospice in order to gain valuable perspective on your hospice’s strengths and weaknesses.
Baseline audits may seem like a logical step
to skip so you can go straight to implementing standard policies that would help prevent a hospice from running afoul of any federal regulations in the future. But, experts warn, it would be shortsighted to ignore your organization’s current performance.
"The whole point of a compliance program is to find out what your current weaknesses are — weaknesses that would allow fraud and abuse — and then make changes to prevent them," says Mickey Pope, RN, BSN, corporate compliance officer for the Hospice of the Bluegrass in Lexington, KY.
When conducting a baseline internal audit, hospices must consider the following:
— the scope of the audit;
— who should conduct the audit;
— what to do with the results of the audit.
Think of the baseline audit as a snapshot of your hospice’s policies and procedures to be held up against guidelines set forth by the Office of the Inspector General (OIG).
Specifically, the OIG is concerned with hospice policies regarding documentation, billing, and marketing, to name a few. The OIG wants to be assured that employees and hospice agents and contractors, such as physicians and therapists, uphold the hospice’s commitment to comply with federal and state standards, with a particular emphasis on preventing fraud and abuse.
In its own guidance, OIG recommends that hospices creating a compliance program include appropriate training and educational programs to avoid risk areas, such as uninformed consent and improper admission.
Policies and procedures should include:
• timely documentation of clinical factors that qualify a patient for the Medicare hospice benefit;
• instruction on who has the authority to make entries in the patient record;
• an emphasis on admission only when documentation supports applicable reimbursement eligibility criteria;
• an indication that the diagnosis and procedure codes for hospice services reported on the reimbursement claim are based on a patient’s clinical condition as reflected in the medical chart and other documentation;
• a provision that compensation for hospice billing and admission staff not include any incentive to bill for hospice care regardless of whether proper criteria are met.
These are all matters that hospices must consider as they begin to put together the elements of the compliance programs. Hospices must take specific steps, including appointing a compliance program officer and educating employees on the purpose and procedures of the compliance program. The baseline audit is one of a number of exercises that hospices should perform to ensure smooth implementation and organization improvement.
The Alexandria, VA-based National Hospice and Palliative Care Organization (NHPCO), recognizing the importance of an effective compliance program, published a resource for hospices seeking direction in the formation of their own compliance program. In The Compliance Program Toolkit, the NHPCO advises hospices not to confuse their compliance programs with accreditation standards. The fact that a hospice scored well on accreditation standards does not guarantee it is compliant with federal regulations and laws.
While there is some overlap, accreditation focuses on processes that affect quality of care, while a compliance audit focuses on asking the question: What are the potential areas where laws may be broken?
Hospice of the Florida Suncoast in Largo added another reason to conduct a baseline audit. After a string of reviewers conducted their own audits of the organization, including the OIG (which found no evidence of fraud and abuse), hospice officials felt that they needed to conduct an audit of their own and annually review their performance to identify areas that can be improved upon.
"We wanted to be in a constant state of readiness," says Betty Oldanie, RN, BSN, MS, vice president of planning, and the ethics and compliance officer for the Hospice of the Florida Suncoast. "We felt that we have had so many people looking at our organization that we had already gathered a lot of the information needed to do a baseline audit."
Oldanie says hospices should begin by looking at information that has already been gathered as a result of reviews done by other organizations, including insurers and accrediting organizations.
When all is said and done, the following risk areas should be included in the audit:
Clinical areas that should be audited:
Eligibility
Levels of Care
Revocations/discharges
Timely physician signatures
Interdisciplinary group patient review
Length of stay and recertification
Falsification of records
Volunteer coordination
Verbal orders
Billing areas that should be audited:
Coordination of payments
Levels of care/accurate billing
Inadequate/substandard care
Unlicensed staff
Location of service delivery
Provider certification numbers
Overpayments
Marketing areas that should be audited:
Anti-kickback
High-pressure marketing
Patient solicitations
Sales commissions
Late referrals
Nursing home areas that should be audited
Utilization of services
Professional management
Written agreements
Incentives
Internal reviewer vs. external reviewer
Depending on the resources available to a hospice, the audit can be conducted by internal or external sources. For example, the Hospice of the Florida Suncoast, one of the largest hospices in the country, uses an audit firm to conduct a financial audit and internally assesses its compliance efforts each year.
In addition, consultants, lawyers, and accountants can also serve as external consultants. According to the NHPCO, attorney-directed baseline audits are beneficial because the work provided by the attorney may be protected under attorney-client privilege laws.
The common denominator among the internally and externally conducted audits is knowledge of hospice regulations and conditions of participation needed by those conducting the audit.
More important, however, than who conducts the audits is ensuring that the person or team assigned to the task is independent and objective. Appointing someone with a potential bias — such as a department supervisor who has an interest
in proving that his or her department is meeting federal regulations — can put the integrity of the entire process into question.
Managers at Haven House Hospice in Atlanta, a hospice with an average daily census of 100, realized that their limited resources prevented them from hiring external auditors to examine their financial records and their regulatory compliance performance. But that didn’t prevent them from conducting an independent review.
"I think it’s easily done," says Cheryl Watts, RN, CPHQ, compliance officer and performance improvement director for Haven House.
An accurate assessment of current policies can be done internally by hospice personnel as long as the person assigned to conduct the audit maintains independence. This can be achieved by removing the layers of management between the reviewer and the hospice’s board of directors.
Allow the reviewer to report his or her findings directly to the board or a subcommittee of the board in charge of reviewing audit findings. "Any areas that needed work were taken to the board and an action plan was developed," Watts says.
In the weeks that it takes to compile the data gathered from the audit, a number of items may prove to be weaknesses that must be improved upon. For example, the audit may reveal a number of instances in which physician signatures were missing or delayed.
What a hospice does with these kinds of results — a deficiency in a risk area that could lead to regulatory problems — is obvious: Correct the problem by implementing policy and educating staff and contractors so the deficiency is abated.
Both the Hospice of the Florida Suncoast and Haven House Hospice did not uncover any major problems. The problems they did reveal were addressed by reporting them to the hospices’ boards of directors and doing strategic planning to eliminate similar problems in the future. Also, procedures were put into place to monitor problem areas and track improvement.
What if an audit reveals more than routine problems that can easily be fixed, such as evidence of Medicare overpayments, fraud, or just plain human error on a grand scale?
According to the NHPCO, several factors must be considered:
• the extent of the problem;
• the amount of money involved;
• whether it is an isolated incident caused by human error or intentional fraud.
The bottom line may be that the audit revelation may require hospice officials to report the compliance problem voluntarily, which is also known as "self-disclosure." In this case, an attorney is essential, says the NHPCO. There are several levels of disclosure. Overpayments should be reported to the hospice’s fiscal intermediary, whether the problem was caused by human error or fraudulent activity. The hospice may also report its findings to the OIG in addition to the fiscal intermediary or allow the fiscal intermediary to decide whether the OIG should be informed.
The OIG has developed protocols that dictate self-disclosure. The disclosing provider is required to provide basic information regarding the hospice’s findings, including a description of the matter and the reason why the provider believes regulations have been disobeyed. The provider also should provide a report to the OIG identifying the cause and the officials involved; describing the time period in which the incident or incidents occurred; and estimating its financial impact.
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