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Auditing for Optimal Reimbursement and Compliance Presented by Dawne Beckley, RHIT, CPC The Rybar Group, Inc. September 19, 2008.

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Presentation on theme: "Auditing for Optimal Reimbursement and Compliance Presented by Dawne Beckley, RHIT, CPC The Rybar Group, Inc. September 19, 2008."— Presentation transcript:

1 Auditing for Optimal Reimbursement and Compliance Presented by Dawne Beckley, RHIT, CPC The Rybar Group, Inc. September 19, 2008

2 ©The Rybar Group, Inc. 2008 2 The Revenue Cycle Audit The Revenue Cycle Audit is an excellent Operational Analysis tool.

3 ©The Rybar Group, Inc. 2008 3 Why a Revenue Cycle Audit? Substantiates that each service provided by the clinician was reasonable and medically necessary.

4 ©The Rybar Group, Inc. 2008 4 Why a Revenue Cycle Audit? Validates that payment for services was accurately and completely processed.

5 ©The Rybar Group, Inc. 2008 5 Components of the Revenue Cycle The Front End Patient Scheduling/Registration – Appointment scheduling – Verification of insurance eligibility – Prior authorization for care – Financial responsibility

6 ©The Rybar Group, Inc. 2008 6 Components of the Revenue Cycle The Core Charge Capture/Billing – Pricing and fee screens – Documentation – Coding – Charge entry

7 ©The Rybar Group, Inc. 2008 7 Components of the Revenue Cycle The Back End Claims Management – Submission – Follow-up – Denials/Rejections – Appeals

8 ©The Rybar Group, Inc. 2008 8 Mistakes Mistakes at the Front End, the Core, or the Back End will result in Denials, Delays, or Reduced Payments. Nearly every process in operations has the potential of impacting the receipt of revenue!

9 ©The Rybar Group, Inc. 2008 9 Components of the Revenue Cycle The Internal Revenue Cycle: controlling the front end, the core and the back end of the Revenue Cycle is the most important improvement a facility can make to increase its financial position.

10 ©The Rybar Group, Inc. 2008 10 The Internal Revenue Cycle Assess operational processes Analyze contractual agreements and payment policies Perform a revenue cycle audit Perform benchmark comparisons Create a work plan and implement!

11 ©The Rybar Group, Inc. 2008 11 Charge Capture: Identify Areas of Pitfalls/Opportunities Begin by looking at Appointment Scheduling through to Payment Resolution for ALL services rendered.

12 ©The Rybar Group, Inc. 2008 12 The Auditing Process Types Steps Issues Found Coding/Modifiers Medical Necessity OIG Claims Management

13 ©The Rybar Group, Inc. 2008 13 Three Types of Audits Prospective Audit  Review of claims before they are submitted to payors Retrospective Audit  Review of claims after they are paid

14 ©The Rybar Group, Inc. 2008 14 Three Types of Audits Significant Event Audit  Review of a specified service or coding pattern All three types of audits are necessary.

15 ©The Rybar Group, Inc. 2008 15 Steps in An Audit Define the purpose of the audit – Baseline compliance audit – Follow-up review – Assess revenue cycle processes Select the type of audit – Prospective, retrospective or event

16 ©The Rybar Group, Inc. 2008 16 Steps in An Audit Define the sampling methodology – Random – Systematic – All payors/single payor Select the audit tools Compare documentation against data

17 ©The Rybar Group, Inc. 2008 17 Steps in An Audit Analyze findings Benchmark/Peer comparison Implement change Note: The OIG recommends auditing 5 or more medical records per payor or 5 to 10 records per physician.

18 ©The Rybar Group, Inc. 2008 18 Issues Found During An Audit Scheduling/Registration/Check-in – Scheduled incorrect type of service – Inaccurate insurance information/eligibility not validated – Pre-certification/authorizations not obtained prior to service – Collecting co-pays and outstanding balances

19 ©The Rybar Group, Inc. 2008 19 Issues Found During an Audit Billing/Charge Capture – Pricing Updating charges – Billing slips Updated codes – ABN process Non-covered services

20 ©The Rybar Group, Inc. 2008 20 Issues Found During an Audit – Documentation! – Coding! – Medical necessity! – Charge entry!

21 ©The Rybar Group, Inc. 2008 21 Issues Found During an Audit No documentation to support billed services No authentication of documentation Missed codes and charges Invalid codes due to outdated charge tools

22 ©The Rybar Group, Inc. 2008 22 Issues Found During an Audit Unbundling of procedure codes Inappropriate or no modifier used when required CCI Edit issues (internal)

23 ©The Rybar Group, Inc. 2008 23 Coding Has everything been billed that can be billed? Are modifiers used appropriately? Are diagnoses linked correctly to corresponding procedures? Does documentation support the codes assigned?

24 ©The Rybar Group, Inc. 2008 24 Coding Validate ICD-9-CM and CPT code assignments Is documentation in the operative report supportive of codes assigned? Are all codes assigned on the claim form?

25 ©The Rybar Group, Inc. 2008 25 Coding - Has everything been billed that can be billed? Use the CCI edits to look for bundling edits – Column 1 Column 2 coding edits – Mutually exclusive edits EHOPPS/list.asp#TopOfPage Use the CMS Addendum B to look at Medicare’s procedure status indicators

26 ©The Rybar Group, Inc. 2008 26 Coding - Has everything been billed that can be billed? For example: CPT code 49560 - Repair initial incisional or ventral hernia; reducible When mesh implantation is utilized during repair, should assign code 49568 in addition to hernia repair code.

27 ©The Rybar Group, Inc. 2008 27 Excision of Lesions Commonly seen during an audit: An excision of a lesion is performed and is coded as an excision of a Benign Lesion. The pathology report confirms a Malignant Lesion. Coding should be held for pathology report.

28 ©The Rybar Group, Inc. 2008 28 Laceration Repairs Common errors noted: – The size of the repair is not documented – Wound cleaning or removal of matter is not documented – The depth of the wound is not documented

29 ©The Rybar Group, Inc. 2008 29 Laceration Repairs The documentation of the size of the laceration and the depth of the lesion will decide which to code: an intermediate repair or a simple repair. Documentation should be in the body of the operative report - not just the header.

30 ©The Rybar Group, Inc. 2008 30 Colonoscopies Were biopsies performed and what type? Other procedures separately performed? Terminated or reduced service? Screening versus Diagnostic

31 ©The Rybar Group, Inc. 2008 31 Coding Ensure that procedure (code) is on Medicare’s approved list of procedures for Ambulatory Surgery Centers. Intraocular Lens, drugs and biologicals, OPPS pass-through devices, brachytherapy sources, and radiology procedures reported separately?

32 ©The Rybar Group, Inc. 2008 32 Coding If the ancillary services or devices are not initially reported on the same claim as the primary procedure, an additional claim can be submitted; Medicare will perform a claims history to locate the original claim with the same date of service - when the claim is identified, Medicare will reimburse the second claim!

33 ©The Rybar Group, Inc. 2008 33 Modifiers Modifier 22 – Unusual procedural services (professional claim) When a procedure is complicated or requires more time than usual. Example: If a patient has extensive abdominal adhesions that require a lot of time and effort to remove.

34 ©The Rybar Group, Inc. 2008 34 Modifiers Modifier 52 – Reduced Services Example: When a colonoscopy can only be performed partially because of poor prep. Medicare will apply a 50% payment reduction for these procedures.

35 ©The Rybar Group, Inc. 2008 35 Modifiers Modifier 73 - Discontinued outpatient procedure prior to anesthesia administration Medicare will apply a 50% payment reduction for a procedure that is terminated due to complications after the patient has been prepared for surgery and taken to the OR, but before anesthesia has been induced or the procedure initiated.

36 ©The Rybar Group, Inc. 2008 36 Modifiers Modifier 74 - Discontinued outpatient procedure after anesthesia administration Medicare will make full payment for surgical procedures that are terminated due to complications after anesthesia has been induced or the procedure initiated.

37 ©The Rybar Group, Inc. 2008 37 Modifiers Modifier 59 – Distinct Procedural Service  Need to indicate that a procedure or service was distinct or independent from other services performed on the same session.  Known as the modifier of last resort.  Overrides CCI edits when a modifier is allowed.

38 ©The Rybar Group, Inc. 2008 38 Modifiers HCPCS Level II Modifiers – LT, RT – FA, F1-F9 – TA-T9 – E1- E4

39 ©The Rybar Group, Inc. 2008 39 Medical Necessity Lack of medical necessity is one of the most common reasons for payment denial. If the signs and symptoms support the service requested…… – Medical Necessity exists If the signs and symptoms are not recognized as a standard for the services requested…… – Medical Necessity does not exist

40 ©The Rybar Group, Inc. 2008 40 Medical Necessity Patient signs and symptoms prompt the physician to order services. Coders translate signs and symptoms into ICD-9 diagnostic codes and services into HCPCS or CPT codes. Payor edits match ICD-9 with HCPCS to determine if a service is necessary for the diagnosis submitted.

41 ©The Rybar Group, Inc. 2008 41 Medical Necessity Commonly seen as denied: – Mammograms – Bone Density Scans – Prostate Cancer Screening – Colorectal Cancer Screening – Cervical or Vaginal Cancer Screening Note: Coverage determined by age, frequency, risk factors, absence or presence of signs/symptoms.

42 ©The Rybar Group, Inc. 2008 42 Medical Necessity Review National Coverage Determinations and Local Coverage Determinations for coverage information. Diagnosis supporting medical necessity? Is ABN process in place?

43 43

44 ©The Rybar Group, Inc. 2008 44 OIG Work Plan Identify OIG Work Plan targets. For Example: 2008 work plan includes review of ASC payments due to APC transitioning.

45 ©The Rybar Group, Inc. 2008 45 OIG Work Plan Modifiers with CCI Edits – In 2001, $565 million paid with a modifier included on an edit pair. – Although not on 2008 work plan, it is a common target.

46 ©The Rybar Group, Inc. 2008 46 Issues Found During an Audit Claims Management – Clean, timely claim Get it right the first time – Work the remittance advice – Denied/Rejected claims Coding Eligibility Registration Referral/pre-authorization – Appeal

47 ©The Rybar Group, Inc. 2008 47 Claims Management Loss of claim dollars are due to: – Inaccurate coding – Dirty or untimely claim – Code to claim issues – “Un-worked” remittance advices – Failure to resubmit denied claims (write-offs) – No appeals process

48 ©The Rybar Group, Inc. 2008 48 Major Reasons for Claim Denials Errors made during the patient registration process Verification of information not obtained Referral or pre-authorization not obtained Invalid codes (HCPCS and ICD-9-CM) Service not medically necessary Service not supported by documentation Modifier use

49 ©The Rybar Group, Inc. 2008 49 The Revenue Cycle Audit Compliance Plan Post Audit Results

50 ©The Rybar Group, Inc. 2008 50 Performing a Revenue Cycle Audit Facilities should implement an internal auditing policy as part of their compliance plan. Internal audits should be performed on a routine basis to stay proactive in preventing potential billing cycle issues. An external audit should also be performed every 1-3 years.

51 ©The Rybar Group, Inc. 2008 51 After the Audit Analyze results Identify key problematic areas Develop action steps – Rebilling – Education Implement plan Follow up

52 ©The Rybar Group, Inc. 2008 52 Overall Results Improved processes Increased coding accuracy Decreased billing errors Improved documentation Compliance with third-party payor regulations Optimized reimbursement

53 ©The Rybar Group, Inc. 2008 53 Questions

54 ©The Rybar Group, Inc. 2008 54 Dawne Beckley, RHIT, CPC The Rybar Group Phone: 810-750-6822 Ext. 136 Email:

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