Auditing and Monitoring — A Necessity for Effective Compliance and Ethics
Everyone working in the field of healthcare compliance understands one of the seven key elements of an effective compliance and ethics program is auditing and monitoring.
But why is auditing and monitoring so important? Because coding, billing and documentation errors frequently result in fraud, waste and abuse. Without an effective auditing and monitoring process in place, there is no way to measure the impact of provider billing, coding and documentation errors in an organization and the ability to identify what steps are needed to correct them from recurring. In this Audit Spotlight, we focus on the role of auditing in reducing fraud, waste and abuse.
ClaimDOC Audits: What, How and Why
ClaimDOC’s audit team analyzes claims for everything from billing errors, medical appropriateness based on claim diagnoses, egregious charges and more. No computer or system can catch everything, and no one person can do it all. A commonsense approach is used to identify codes and services integral to other billed items and services.
Claims, itemized bills and medical records, as applicable, are reviewed for accuracy of coding, billing and fair pricing on all CMS-1500 claims/electronic equivalent over $2,000 and all UB-04 claims and electronic equivalents. Why? Because ClaimDOC’s due diligence is no different than other health plans and healthcare providers and organizations. An effective and ongoing auditing and monitoring program is key to compliance and ethics. Accurate pricing for billed services is vital and ongoing examination of healthcare claims is incredibly important to help reduce fraud, waste and abuse.
The Office of Inspector General’s General Compliance Program Guidance provides comprehensive guidance for health plans and other healthcare stakeholders. It includes information on relevant federal laws, compliance program infrastructure, OIG resources and other beneficial information for understanding healthcare compliance. It is available for access through the OIG website.
Example of ClaimDOC Audit Findings
A male patient underwent back surgery at a hospital located in Indiana and was an inpatient at the facility for 17 days. The patient was experiencing spinal stenosis, a condition that narrows the space in the spine, putting pressure on the spinal cord or nerves.
Total charges reported and billed on the hospital facility claim: $421,845.85.
ClaimDOC reviewed the submitted claim alongside the itemized bill and questioned the 39 quantity units reported on the UB-04 claim for Revenue Code 278 — implants with billed implant charges of $235,944.
Medical records were requested to determine the accuracy of billed charges. What did the auditor find? Charges of $23,020 for implants (five screws) were unsupported by medical record documentation according to the operative report and hospital’s implant log. Additionally, unbundled items and services part and parcel to other reported and billed charges on the claim were identified.
The claim was priced considering the non-supported implants, unbundled services, the hospital’s reported cost-to-charge ratio data with markup and the Medicare DRG rate with markup to determine the higher of the two rates.
- ClaimDOC pricing on the hospital claim: $100,857.61
- Plan savings: $320,988.24
- Percentage of savings: 76%
The Takeaway
Just because healthcare providers can bill for or charge whatever amount they want for items and services does not mean they should. Noncompliance with coding and billing guidelines and rules occurs more often than it should. Compliance programs are costly, but isn’t it worth the cost to sleep better at night? Some healthcare plans, providers and organizations have excellent, effective and ongoing programs to identify and remedy compliance issues. Others have a nice compliance program manual sitting on a shelf, and there it stays.
ClaimDOC ranks due diligence, compliance, auditing and fair pricing for services provided at the top of the pyramid. Our goal is to use benchmark charges and costs nationally to negotiate fair, correct and ethical payments on audited claims. Employers turn to us seeking to establish fair reimbursement rates for their plans that allow them to save money and provide richer benefits to their employees.
Background
ClaimDOC’s comprehensive line-by-line review of claims uncovers errors that basic claim repricing and auto-adjudication does not catch, leading to greater savings for health plans and its plan members. Our audit team analyzes all types of healthcare claims for a variety of potential concerns including excessive usual and customary charges, duplication of claims, incorrect coding, unbundling of services and many others. Our claims review is not intended to impact care decisions or medical practice.