There is no proven way for providers to avoid government audits for medical necessity. If a hospital is treating patients and submitting claims, at some point it will be audited. Given the increase in audits as the Centers for Medicare & Medicaid Services (CMS) contractor programs develop, a more appropriate name for a hospital’s RAC rapid response team would be an audit rapid response team. When such a squad is faced with an audit, there are several best-practice steps that can enable palatable outcomes.

A hospital’s audit rapid response team should incorporate all relevant departments, including finance, compliance, legal, HIM, utilization review, clinical physician leadership and any other groups seen fit. The team must include a mix of these different groups because the audit experience differs for each of them. The groups need to create a forum where they can share perspectives and create a quality assurance feedback loop in order to address various issues.

When the audit response team is faced with an audit, they first must ask a few questions internally before moving on to the next steps:

  • What auditor is conducting the audit (MAC, RA, CERT, OIG, DOJ, etc.)? Not all audits have the same implications, and many potential outcomes should be considered.
  • Should charts be reviewed prior to sending?
  • What is the clinical strength of the case? Does the documentation reflect this? Should we review the matter under attorney/client privilege?
  • If attorney/client privilege review is not needed, does counsel need to be involved in another way?

Once the team has considered these questions, the designated internal audit contact then should communicate with the auditor and gather as much information about the audit as possible. The most important information to gather is the reason the hospital has been targeted for this particular audit and whether this case is actually an outlier. There is always the potential for simple clerical errors, so determining that this case is being audited for the correct reason from the start could save a lot of time further down the road.

Next, determine the audit timeline, including whether the audit will be performed on-site or off-site. If the auditors will be coming on-site for the audit, it can be beneficial to walk them through the compliant UM workflow process the hospital followed to render its decision in the case, as well as to point out quality checks throughout the program. There should be constant communication with the auditor throughout the entire audit process. This is why it is very helpful to develop a good working relationship with an auditor: if a good rapport exists, the auditor may be more likely to afford the hospital an opportunity to discuss and review the audit results prior to the start of the appeals process. Any opportunity to demonstrate a consistent UM process, strict application of standards of care and QA oversight of the billing process will be beneficial.

Providers also should refrain from certain patterns of behavior that can hinder the effectiveness of the audit process. It is crucial that a hospital stay on top of the audit from the time it is notified. All audits need to be taken seriously, so it is always better to over-prepare and start early than to wait until the last minute to take action. Many audits go through to completion because a hospital just accepts the audit findings as accurate without further investigation on its part. Most importantly, always have an ongoing, compliant process in effect. This prevents hospitals from trying to find an “easy fix” by self-denying or overusing observation in an attempt to avoid future audits. Finally, be on constant alert for vulnerabilities within your compliance program. Detecting these early could save you a lot of headaches later on in the audit process.

The most common place to find vulnerabilities is in the patient’s medical record. Thorough documentation indicating the care provided day to day by physicians and nurses is important, but it is just as vital to ensure that a hospital’s UM “road map” is included. This road map essentially outlines the utilization review (UR) process, including screening criteria, second-level physician review and any additional notes from the UR committee. The goal is to make it as easy as possible for auditors to understand the entire thought process from start to finish. Since the auditors weren’t present at the time of care, a thorough medical record can make them feel like they were. Most likely, the care provided was appropriate. Clear documentation of care will make this clear to the auditors and limit inappropriate denials.

Audits for medical necessity are often very complicated, but it is possible to achieve clarity. Admission decisions must be based on clinical and regulatory evidence, and best practices and consistent processes must be paired with diligent oversight and data review. As a hospital’s processes continue, it is crucial that they learn from past experiences and identify procedural failures. All facilities must recognize that it is possible their hospital will be subject to inappropriate denials, and they should be prepared to appeal and advocate for themselves when this happens. The best practices listed above have been helpful to many hospitals in the past. Because there is still no known way to avoid an audit, addressing it head-on is the next best thing.

About the Author

Ralph Wuebker, MD, MBA, currently serves as Vice President of Executive Health Resources’ (EHR) ACE (Audit, Compliance and Education) Team. This group of physicians conducts audits and regular visits to EHR’s client hospitals to provide ongoing education on a variety of topics including Medicare and Medicaid compliance and regulations, medical necessity, Recovery Audit Contractors, utilization review, denials management and length of stay.

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