By Jennifer Hume, CPC, CPMA, CEMC
Imagine the patient who doesn't come to your practice until he is very ill. He's hospitalized, undergoing extensive procedures at a great cost. The sad part? His condition could have been prevented if he had come in for regular preventive care.
Compliance audits can be viewed in the same way. Practices that bill for services without taking the time to check to see if what they’re doing is right are running the same risk as a patient who doesn't see his or her physician for preventive care services. They're gambling that everything is ok. That is, until something bad happens.
The need for compliance audits was first identified by the Office of Inspector General (OIG) in February 1998 when it published the first Compliance Program Guidance for Hospitals. In October 2000, the OIG published similar Compliance Program Guidance for Physicians and Small Group Practices. In all, a total of 11 Final Compliance Program Guidance documents have been published for a variety of healthcare providers, with supplemental guidance published for hospitals and nursing homes. A common element across all of the guidance published by the OIG is implementation of auditing and monitoring processes.
Auditing patient records can be as simple or detailed as needed to assess potential risks. Every practice should perform a baseline or initial audit, just to see where they stand. This gives the practice an opportunity to see if they have any problems that need to be addressed. After a baseline audit has been completed, a re-validation audit may be performed to verify prior issues have been resolved. Focused audits may also be helpful to evaluate specific issues or potential problems.
But audits shouldn't stop after the baseline audit. Just as patients should have routine preventive exams, physician practices should schedule routine audits. These audits check the health of your practice and can be an invaluable tool that helps move the practice forward. For example, audits can have the following benefits:
- Improved patient care – During audits, documentation practices are reviewed and areas for improvement are noted. Improved documentation can help lead to improved patient quality of care as it becomes clear exactly what care was provided to the patient.
- Improve coding / reimbursement – Improved documentation leads to better code assignment by those responsible for submitting claims to payers. In addition, audits can help identify deficiencies where further training may help staff succeed in their jobs.
- Improved processes – With better documentation and coding, chances are there will be fewer denials for improved cash flow. It also frees up physicians from having to respond to questions from coding and billing staff so they can focus their attention on the reason why they chose to practice medicine, their patients.
- Decreased risk – Audits help you identify where your risk areas are so you can take corrective action before there's an investigation. Increased activity by Recovery Audit Contractors (RAC) and enhanced measures to combat fraud and abuse as a result of the Healthcare Reform law can all have a serious negative impact on the health of your practice.
Not taking the time to perform audits can result in serious risks. Just like the patient who does not schedule regular preventive examinations, failing to include auditing as part of the practice's compliance efforts could result in a "sick" practice. Regular audits are able to:
- Identify situations where documentation doesn't accurately represent the services that are actually provided to patients. In this case, the practice is exposed to two separate risks. The first risk relates to patient quality of care. If the documentation does not clearly support the patient's medical condition, or does not identify the services performed, there is a potential for medico-legal risk if others rely on the documentation for clinical decisions that ultimately harm the patient. There is also financial risk as the selected CPT and ICD-9-CM codes may not accurately reflect the services that are medically necessary and performed.
- Even if documentation is clearly in place, audits can identify situations where providers and / or coders are not selecting the most appropriate codes to represent the procedures and services performed. Depending upon the nature and extent of the problem, this could result in minor problems, such as coding that may be correct for one payer but different requirements are in place for another payer. Or more significant problems such as billing for multiple services that should be included in a single code (unbundling), or incorrect assignment of diagnosis codes that results in payment for otherwise medically unnecessary services.
The serious risks to not performing audits range from malpractice lawsuits for patient quality of care issues, to federal and state investigations for violations of the False Claims Act. Lawsuits and investigations are costly and can have a serious negative impact on the health of your practice. Don’t gamble that everything is ok. Get your audit check up to give you peace of mind that your practice is healthy. And if it’s not, get the medicine you need to manage your risks.