Audits inevitable, poor results are not

Put to rest any hopes that Recovery Audit Contractors, or RACs, will be going away anytime soon.
In 2012, RAC auditors collected $2.29 billion in overpayments from provider organizations on behalf of the Centers for Medicare & Medicaid Services. In the first quarter of 2013, the program has racked up another $1.37 billion.
Add to these payment clawbacks the costs to providers associated with responding to audits. Yes, CMS may reimburse your organization for copying fees, but the rest of the audit process is on your dime.
The best way to prepare for a Medicare or Medicaid audit is to proceed as if a notice will arrive at any moment, and thus collect as much relevant reimbursement data as you can, as early in the process as you can. By collecting relevant data as a matter of day-to-day business, you not only reduce the risk of error, you have also capture the needed data for reference purposes should an audit notice come across your desk.
Here are three steps to prepare for the (virtually) inevitable arrival of an audit letter:

1. HAVE PROCESSES IN PLACE
"If you have a process in place in your compliance and revenue cycle areas that can verify the appropriateness of charges, you'll limit the damage that could occur in a lot of situations," said Carla Brewer, a senior health information system consultant at Stoltenberg Consulting.
The absence of an effective data-collection process may result in both inaccurate data and troublesome billing errors.
"If the processes are not in place at the beginning of the cycle, you spend many hours trying to meet compliance rules after the fact," Brewer said. "That results in more rework of the patient accounts, and gathering data as it's happening."
Audit response is a team sport, said John Brooke, vice president of sales, healthcare, pharma and life sciences for SAI Global's Compliance 360 line. Audits routinely include requests for information on 400-500 patients. Because of the large number of groups within an organization that are involved - finance, compliance, revenue cycle, legal, case management, clinical, among others - and the tight deadlines afforded for response, the cost of responding to an audit may exceed the cost in question.
"Our most efficient customers suffer the least," Brooke said. "They look at audit response as a system-wide project."

2. START AT THE START
Both clinical and case-management staff play crucial roles in preventing revenue loss through Medicare and Medicaid audits, experts say, by gathering the right information up front.
Brewer said that properly trained and staffed front-line workers ensure that charges are made first to primary and secondary payers before Medicare or Medicaid is charged. When it's appropriate to bill Medicare or Medicaid, it's important the agencies are billed correctly, say, as bundled or unbundled charges.
"It's important to have some system of support for the process," Brewer said, "so that you'll have the necessary red flags for where the process is broken down, since people make mistakes."
She said organizations that efficiently respond to audits tend to collect needed data up front, so that when a claim is produced, it reflects all the data required.
"If you really want to avoid difficulty with audits and, of course, collect the cash, it's better to (collect data) more at the front end rather than back end."
Karen Bowden is senior vice president at Craneware and an expert on audits and revenue recovery. In a January 2013 blog, Bowden offered tips on preparing for the possibility of Congress extending RACs' reach back another two years. The ideas apply here as well, specifically those regarding "simulated fire drills" and checklists.
Bowden recommends that organizations conduct random internal audits. She says providers must ensure all charges are correct, complete and compliant pre-bill, and post-claims submission using automated tools that can identify patterns of charging behavior and opportunities for improvement.
You can make the process easier by preparing complete verification check-off sheets for all records that could possibly be requested, ensuring that all key components are included.

3. USE RIGHT TOOLS
Experts agree that technology tools ease the process and instill a peace of mind.
"In terms of return on investment, a tool like this is not going to bring $5 million to the bottom line," Brooke said. "But it will prevent you from letting things fall through the cracks that are going to result in a massive take-back that you really shouldn't have had.
"It functions as a virtual employee and keeps managers from waking up in the middle of the night, worrying about having missed something."