1. Charge Capture Auditing …. How to Uncover Revenue Leakage
Bridget Johnson, CIA, CCSA, Audit Supervisor
Joanne Ouellet, CPA, CIA, Audit Senior
The Methodist Hospital System

2. About Us: The Methodist Hospital System Overview
No. of Hospitals – 4
Total Net Patient Revenue - $1.2B
Employees – 12,153
Affiliated Physicians – 3,159
Licensed Beds – 1,464
Volumes:
Inpatient Admits: 68,212
Outpatient Visits: 498,823
International Patients: 6,500
Primary Academic Affiliations:
Weill Cornell Medical College & NY Presbyterian Hospital 2

3. Who We Are: TMHS Internal Audit Department
Team Profile - 9 team members
VP, Business Practices Officer & Chief Audit Officer
Director, Internal Audit
Audit Supervisor
4 Senior Internal Auditors
2 Senior IT Auditors
Experienced: years
Credentialed: 21 designations
CIA, CISA, CCSA, CHC, CISSP, CHFP, CPA, MBA
Recognized: IIA’s Recognition of Commitment Award

4. Objectives of Session
Identify Charge Capture Risks in Selected Clinical Areas from Point of Service to Bill
Design Tests to Discover Lost Reimbursement Opportunities
Quantify Potential Reimbursement Impact

5. Consider….
A review of data from more than 100 hospitals, which encompassed more than 30,000 complete medical records and comprehensive billing and collection records showed that, on average, the organizations were losing 1 percent of revenue to errors in the charge master or charge capture.
Hospitals typically are not aware of the degree to which they may be missing charges.
Appropriate charge capture is not only important for capturing revenue but also for tracking use of resources.

6. Finding the Leaks So how do you uncover the leaks?
Where should you look? 6

7. Where to look…
Start with clinical areas that should generate large amounts of revenue such as:
Emergency Department
Cardiac Cath Labs
Pharmacy
Focus on the reimbursement that matters:
Commercial Payers : % of Charge Reimbursement
Carve-outs : Implants, High Cost Drugs (HCDs)
So why did we decide on these areas specifically? Because these areas, if missing charges, could result in an increase in reimbursement. ED patients are treated as outpatients. Many managed care contracts provide for percent of charges reimbursement for outpatient care. Operating rooms and Pharmacy are areas where carve outs, such as for High Cost Drugs and Implants, could result in increased revenue if all charges are being appropriately captured. 7 7

8. Next Steps . . .
Understand charge capture process in clinical areas. Specifically…
How charges are captured (i.e., manually or electronically)
Charge Monitoring (i.e., reconciliations, daily volumes, etc.) 8

9. Using CAATs to Uncover Leaks
Develop tests to uncover lost reimbursement. Risks to consider when designing tests are:
Lost charges (i.e. Implants, ER level charges, etc.)
Incorrect assignment of revenue codes
Missing modifiers
Late charges
Incomplete or no reconciliation process 9

10. How to Uncover Leaks in Emergency Department
Purpose of Test:
To identify missing ER charges. Specifically,
- ER level visits
- Missing injection/infusion charges 10

11. How to Uncover Leaks in Emergency Department
Required Info to Perform Test(s):
ER charge data for all patients including
the following fields:
- Account Number - Date of Service
- Insurance Plan Code - Charge Amount
- CDM Number - Patient Type
- CDM Description - CPT Code
- Modifier - Admit Source Code
If using ACL, apply a filter to your charge file to extract all charges with Patient Type = “E”. If your hospital doesn’t change patient types as the patient flows through you may have to use an “Admit Source Code”. In that case, you would pull your accounts with an ER Admit Source. 11 11

12. How to Uncover Leaks in ED – Missing ER Levels
Procedure Steps:
1. Summarize on account number to obtain a Master File of ER patients
2. Using the ER Charges File, Extract Level Visits using CPT Code(s) =
99291 12 12

13. How to Uncover Leaks in Emergency Department
Using ACL, we can classify our data by CPT code and select “graph” to determine whether our ER level distribution reflects a normal curve. ACL also allows you to drill down on any one of the columns to obtain the supporting detail for each column. So for example if you wanted to test the validity of the modifier “25’s” you could click on the column and see the account information. You would then want to go the patient’s chart and see if the patient actually had multiple ER visits. 13 13

14. How to Uncover Leaks in ED – Missing ER Levels
Procedure Steps (cont.)
3. Relate the ER patient file and ER charges file on account number
4. Add the account number field from ER Charge file to the ER Patient file (Hint: Change the name of the second account number field to avoid confusion.)
5. All instances of blanks in the “second” account number field may indicate instances where an ER level visit was not charged
6. Select a small sample and review medical records with your ED Charge Coordinator
Caveats- Patients that left without treatment. We have a separate CDM code that is applied to patients that left without treatment. By extracting these charges from the detail and performing a relate just as described here, we were able to exclude those accounts from our testing. 14 14

15. 15

16. How to Uncover Leaks in ED – Infusion/Injection Charges
Procedure Steps:
1. Identify patient’s who were given non-self-administered drug; by RevCode = 0250 and HCPCS code = “J”
2. Using the ER Charges file, identify patients who had an infusion or injection charge using the following ACL command:
ER EXTRACT RECORD IF MATCH =
(CPT,'90772','90774','90775','90765','90766','90767','90768')
TO "ER_Drug Inj-Inf Procedures" OPEN
These J Code drugs are referred to as “Drugs Administered Other Than Oral Method” in the HCSPCS code book. 16 16

17. How to Uncover Leaks in ED – Infusion/Injection Charges
Procedure Steps (cont.)
3. Summarize on account number in each file to obtain a summary file of accounts with drug charges and a separate summary file of infusion/ injection charges
4. Relate the Drug Summary File to the Infusion/Injection file on account number 17 17

18. 18

19. How to Uncover Leaks in ED – Infusion/Injection Charges
Procedure Steps (cont.)
5. Add the account number field from Infusion Charges Summary File to the Drug Charges Summary File
6. All instances of blanks in the “second” account number field may indicate instances where an injection/infusion charge was missed
7. Select a small sample and review medical records with your ED Charge Coordinator
We reviewed a sample of 10 and 80% of them were missing a charge. One the IV was cancelled and the drug was not credited. The other was a drug that could be applied topically, so did not need an injection/infusion charge. 19 19

20. Emergency Department – Results & Next Steps
ER level charges – Identified accounts that were missing ER level visit charges and accounts that had multiple ER level visit charges.
Infusion and Injection charges – Identified inconsistent charging practice for infusion/injection of non-self administered drugs.
Next Steps:
Apply charges for missed ER level visit and infusion/injections charges to quantify impact.
Discuss with billing department whether the results warrant re-billing accounts.
So what were our results: 20 20

21. How to Uncover Leaks in Cardiac Cath Lab
Purpose of Test: To identify missing implant charges
Required Info to Perform Test(s): Charge data for Cath
Lab patients including the following fields:
- Account Number - Date of Service
- Insurance Plan Code - Charge Amount
- CDM Number - Patient Type
- CDM Description - CPT Code
- Modifier - UB Revenue Code
We were able to pull this data by department since we were only looking for implants done in the Cath Lab 21 21

22. How to Uncover Leaks in Cardiac Cath Lab
Procedure Steps:
Identify your top 5 most costly implants.
Identify the CDM numbers associated with the procedures that correspond to those implants.
Obtain CPT codes for the procedures that correspond to those implants.
You can talk with your Cath Lab Director or Manager to obtain this information. 22 22

23. How to Uncover Leaks in Cardiac Cath Lab
Procedure Steps (cont.)
4. Extract charges that match the implant procedure CDM numbers:
Cath_Lab_Charges SET FILTER MATCH
(ChgCode,' ',' ',' ',
' ',' ',' ')
5. Summarize the resulting file by account number to obtain a master file of patients that had Cath Lab implant procedures performed
You can talk with your Cath Lab Director or Manager to obtain this information. 23 23

24. How to Uncover Leaks in Cardiac Cath Lab
Procedure Steps (cont.)
6. Extract all charges with a revenue code of 0275 or 0278 and a charge amount greater than $1500 from the original Cath Lab charges file.
7. Relate the Cath Lab Procedure Patients file to the Cath Lab Implants file on account number.
You can talk with your Cath Lab Director or Manager to obtain this information. 24 24

25. How to Uncover Leaks in Cardiac Cath Lab
Procedure Steps (cont.)
8. Add the account number field from Cath Lab Implant Charges file to the Cath Lab Procedure Patients file
9. All instances of blanks in the “second” account number field may indicate instances where an implant charge was missed
10. Select a small sample and review medical records with your Cath Lab department
You can talk with your Cath Lab Director or Manager to obtain this information. 25 25

26. How to Uncover Leaks in Cardiac Cath Lab
To Quantify the Dollar Impact:
1. Extract accounts with missing implant charges that are Managed Care Plan accounts eligible for carve out payments.
2. Apply the CDM prices and carve out rates to each account based on CDM number and Insurance Plan Code.
3. Calculate a potential dollar impact and discuss with billing to determine whether re-billing should occur. 26

27. How to Uncover Leaks in Pharmacy
Purpose of Test:
To identify high cost drugs (HCDs) not billed using the high cost drug revenue code (e.g. 259)
As noted previously, high cost drugs are frequently reimbursed at an additional rate by managed care payers. By not identifying drugs as “high cost” on the UB (using RevCode 0259), we could potentially being missing out on substantial reimbursement.
Pyxis Med
Station 27 27

28. How to Uncover Leaks in Pharmacy
Required Info to Perform Test(s):
Pharmacy charge data for all patients including
the following fields:
- Account Number - Date of Service
- Insurance Plan Code - Charge Amount
- CDM Number - Patient Type
- CDM Description - Quantity
- Rev Code - Modifier 28

29. How to Uncover Leaks in Pharmacy
Additional Files Needed to Perform Tests:
Pharmacy CDM that includes all of your Pharmacy CDM numbers that are assigned the high cost drug revenue code (i.e., “0259” for your Managed Care accounts)
List of Insurance Plan Codes from your Managed Care department that includes High Cost Drug definitions (i.e., daily charge > $250) and carve out payment percentages 29 29

30. How to Uncover Leaks in Pharmacy
Procedure Steps:
1. Limit your Pharmacy Charge data to those charges whose CDM number is not already associated with a HCD revenue code
2. Summarize the extracted file on account number, CDM number and date of service and Totaling the Charge Amount field
3. Summarize again on CDM number, summing the Charge Amount field “IF” charge amount field does not equal zero
Step 1 – This can be done using either ACL or Excel vLookUp – whatever you are most familiar with.
Step 2 – This creates line data that shows the total amount charged per day, per drug, for each patient account.
Step 3 - This is to eliminate any charges and credits that netted out due to returns. 30 30

31. How to Uncover Leaks in Pharmacy
Procedure Steps (cont.):
Calculate an average daily charge by dividing the charge amount field by the count field.
Average Daily Charge = Total Charge Amount
Count
Step 1 – This can be done using either ACL or Excel vLookUp – whatever you are most familiar with.
Step 2 – This creates line data that shows the total amount charged per day, per drug, for each patient account.
Step 3 - This is to eliminate any charges and credits that netted out due to returns. 31 31

32. How to Uncover Leaks in Pharmacy32 32

33. How to Uncover Leaks in Pharmacy
Procedure Steps (cont.):
Using your most recent file, extract the charges whose CDM numbers have an average daily charge greater than your facilities threshold (i.e. $250)
This is the file of pharmacy items that should be
reviewed for HCDs – consider multi-dose vials
and ointments.
Step 4 –note, just because it appears that the entire list exceeds the high cost threshold, they still must be reviewed, preferably by a Pharmacist to look for anomalies, some caveats we noted during our testing included multi-dose vials and ointments. 33 33

34. How to Uncover Leaks in Pharmacy
To Quantify the Dollar Impact:
1. Relate the newly created HCD CDM file with your original Pharmacy Charges file to identify those patient accounts with HCD drug charges.
2. Relate the HCD Charges file to the Insurance Plan Code file and extract only those Managed Care Plan charges that are eligible for carve out payments.
Step 5 –This is going to give you all of the patient accounts that had CDM numbers with improperly assigned revenue codes.
Step 6
Step 7 – You can do this by applying 34 34

35. How to Uncover Leaks in Pharmacy
To Quantify the Dollar Impact (cont.):
3. Calculate a lost reimbursement using the carve out percentage charge
4. Discuss the need to re-bill and recover lost revenue with the Billing Department
Step 7 – You can do this by applying the appropriate managed care contract carve out percentage to each patient account’s charges. 35 35

36. Questions 36