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Revenue Cycle Management

What executives need to know about the audit world

Understanding the root causes and workflow choke points is important to solving the most visible problems associated with recovery audits.

By Lori Brocato C

oping with recovery audits is a nationwide concern for providers that grows more and more each year. And by all predictions, the number of auditors and the volume of

those audits will continue to grow, affecting health- care providers’ financial health and adding to an already burdened IT and staffing demand. These are the manifestations of audits that tend to reach the executive suite. For Kim Wheeler, system director of HIM, St. Vincent’s Healthcare in Jacksonville, Fla., coping with the challenges of recovery audits is an everyday struggle.

A real world example St. Vincent’s Riverside and St.

Kim Wheeler is system director of HIM, St. Vincent’s Healthcare.

Vincent’s Southside are both part of Ascension Health System. Riverside has an EHR and audit automation, while Southside is still paper based. Audit compliance and management in paper-based environments are much more labor intensive and expensive than those in electronic settings.

Both St. Vincent facilities have seen CMS Recovery Audit Contrac-

tor (RAC) activity double in size since 2011. “Riverside used to be limited to 175 records per every 45-day audit period. Now, the limit is up to 369 per 45 days for that facility alone – and they get 369 requests every 45 days,” says Wheeler. Most of the auditor requests for medical records are for compliance with medical necessity reviews, which are more labor intensive than coding or diagnosis-related group (DRG) reviews. “We are expending more human and finan- cial resources just to keep up,” adds Wheeler. Worse yet,

22 October 2012

the Medicare administrative contractor (MAC) prepayment reviews have significantly increased in volume. St. Vincent’s Riverside used to see two or three per week; now the hospital receives 10 per day.

Prepayment reviews represent latest challenge Prepayment reviews have a huge financial impact on healthcare providers as issues must be resolved before the payer processes payment. As would be expected, the prepay- ment cash flow disruption adversely affects discharged not final billed (DNFB). The MAC prepayment reviews are a recent phenomenon, resulting in an influx of activity since June 1, 2012.

“They have become creative in

communicating, coordinating and tracking the work. The effort has required the reallocation of employees and help from the business office and other areas.” - Kim Wheeler, system director of HIM, St. Vincent’s Healthcare in Jacksonville, Fla.

At St. Vincent’s, the slowdown in expected reimburse- ment has received attention from both finance and the billing office. The ripple effect has created a logjam in capital expen- ditures, workflow expansions and staffing for the organization.

Beyond Medicare

In addition to Medicare, there are many other payers requesting recovery audit reviews – Humana, Blue Cross, Aetna, Omnicare (for United Health) and Wellcare. At St. Vincent’s, nearly every chart is now being audited, creating


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