Responding to audits can be time-consuming and costly, and if not managed properly, they can pose a significant financial threat. Although many of you have an audit workflow process and system in place to respond to auditor requests, there are still challenges ahead – and more audits to come.

The success of the Medicare RAC program not only has caused its expansion, but it has emboldened other payers to follow suit. Additional audits have arisen from MACs, CERT, ZPICs and the OIG. Medicaid also is following in the steps of Medicare and now has a Medicaid RAC program of its own. And the three-year pilot of Medicare pre-payment reviews just now is getting underway in 11 states.

Case limits are being modified. For example, RACs now can request up to 20-30 percent more records in a 45-day period, depending on the size of your institution. There is even an effort being made to extend the lookback period from three years to seven years. 

This increased audit activity is prompting institutions to increase staff and driving up the expense of managing audits – as more audits are surfacing, after all, more revenue is at risk, forcing you to spend more in your quest to hang on to that revenue. All of this leads to the point of this article. 

Audit management is an ongoing activity and not a “one-and-done” effort. The process needs to be reviewed and refined, with adjustments made for each new audit. Toward that end, let me review the eight key action steps necessary to ensure that each and every audit request is managed properly.

Step One: Educate Key Stakeholders

First, you must identify these key stakeholders, and second, you need to provide them with access to historical information specific to the type of audit so they can better understand the potential revenue impact. Third, they need to understand the differences among the federal and state regulations governing each type of audit. Lastly, this education needs to be ongoing.

Step Two: Create a Team and Meet Regularly

The team must be multi-disciplinary. Audits affect many different areas of a hospital, and diverse expertise is needed to manage record requests and appeals processes. This team may need to be on call full-time and must be accountable, understand the audit workflow and adhere to timelines/deadlines. Missteps related to deadlines can cause technical denials.

Step Three:  Tracking

It is not reasonable to track audit activity manually, using spreadsheets. The variation and volume of audits require tracking technology. Best practices suggest using tested software that tracks and trends information; automating the “tickler” function to ensure timely responses is a key feature of this software. The software also needs to be instinctive and needs to allow you to look for negative patterns that can be corrected to prevent future recoupment.

Step Four: Request Letter Management

Proper management of request letters is vital to audit management. A workflow must be in place that allows you to engage the release of information activity quickly. An ill-defined process can cause delays leading to denial and recoupment of revenues, warranted or not.

Step Five: Decision Letter Management

Decision letters must be reviewed and processed quickly. Ensure that the letter is attached to matching records in a file that is complete and easily accessible. If you decide to appeal the results of the decision letter, easy access to the complete file significantly reduces response times.

Step 6: Appeals Management Process

Appeals must be tracked meticulously in order to ensure that deadlines are not missed. Concurrent appeals are inevitable, and a process must be put in place to track and manage multiple requests for due dates and storage. Automated reminders and emails to trigger action are recommended.

Step 7: Establish Real-Time Financial Management and a Dashboard Review Process

Tracking dollars at risk is key to understanding the potential impact on your revenue. Invest in a tool that is easy to manage and will provide real-time reports. It should have a dashboard view of dollars at risk as well as dollars won and lost. You also should be able to easily trend all this information.

Step 8: Establish a Process to Prevent Denials from Recurring

Conduct your own internal audits and track/review the results regularly. Use the internally generated data to validate that any and all vulnerabilities are identified and fixed. A major to-do task is to work with clinical documentation experts to improve your documentation. Physicians are the drivers of your revenue; they are also crucial to your ability to hold on to that revenue in that they must properly document and show medical necessity. Physicians need to be part of the audit workflow.

Audits constitute a growing challenge and can pose a real threat to your revenue. Additionally, pre-payment reviews will involve audits before you even receive that revenue. Using the above eight-step process as a guide, coupled with funding and using trusted technology, will provide consistent reporting and facilitate your audit workflow. Follow these steps for optimal audit success!

About the Author

Lori Brocato, HealthPort Audit Product Manager, has over 16 years of experience in the healthcare technology industry creating product lifecycle plans and executing product strategies. Ms. Brocato frequently serves as an audit expert sharing audit management trends and best practice guidelines as a regular presenter for industry events and webinars.  She is the author of HealthPort’s audit Insights Blog and provides expert input for many trade publication articles each year. Ms.Brocato holds the distinction of being RAC-certified by the Medicare RAC Summit and is a member HIMSS, HFMA, and AHIMA.

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