As a measure to crack down on the high rate of healthcare fraud occurring in the country, the Centers for Medicare & Medicaid Services created recovery audit contractors, who are responsible for auditing hospitals for billing errors and possible healthcare fraud. Hospitals face the possibility of incurring tremendous monetary penalties if found guilty of overbilling Medicare.
Jon Elion, MD, associate professor of medicine at Brown University and founder of ChartWise Medical Systems, says if a RAC found a hospital overbilled Medicare $100,000 based on an audit of 10 percent of that hospital's medical charts, the findings would be extrapolated for a total of $1 million in overbilling over the entire hospital. He adds a hospital could also be faced with paying triple damages if the audit shows intent to make false claims.
Here, he shares six ways a hospital can be more proactive in preventing billing errors to avoid incurring monetary penalties while maximizing Medicare reimbursement.
1. Standardize language in medical charts and coding departments. RACs look for inconsistencies between what physicians write in medical charts and what coders bill for. Dr. Elion says billing errors often occur in coding departments, where coders are responsible for translating what physicians document in medical charts into corresponding ICD-9 codes, and hospitals may find themselves in trouble if the coding is not supported by the physician’s documentation.
"For example, let's say I assessed a patient and wrote an order for them to get potassium tablets," Dr. Elion says. "The coder might read the medical chart and conclude the patient had hypokalemia, which is the medical term for a low blood potassium level. The coder is medically correct, but a RAC auditor would say that this can’t be billed for that because the physician never actually used that word in the chart."
2. Implement an internal audit process. Randomly auditing medical charts and coding and billing departments internally will help your hospital adopt a culture of accuracy and completeness to avoid billing errors. To help hospitals prepare for both internal audits and RAC audits, Dr. Elion suggests researching published material on what RAC auditors look for. "You don't want to wait for the outside auditors when you can be looking for these errors yourself," he says. "Many hospitals don't realize that RAC auditors are publishing what they are looking for, so why not find that out?"
3. Provide rewards for good behavior. Dr. Elion suggests positive reinforcement over negative reinforcement for physicians and staff that comply with good practices in clinical documentation and coding/billing.
"There are some hospitals that offer financial incentives to full-time physicians for being good citizens and collaborating with hospitals in ensuring more complete and accurate medical charts," he says. "There are also other hospitals that issue penalties per each chart that has incomplete documentation. I encourage positive reinforcement over penalizing physicians."
4. Institute a clinical documentation improvement program. Hospitals should consider a comprehensive program for improving clinical documentation, including hiring clinical documentation specialists, who are responsible for ensuring medical charts are complete and accurate without asking any leading questions. "A CDS would want to check with a physician and ask him or her 'What would be the diagnosis for this?' as opposed to 'Isn't this hypokalemia?' says Dr. Elion.
Dr. Elion says that through a clinical documentation improvement program, hospitals can also recover better Medicare reimbursements. "Let's say a patient has an abdominal operation, then has an exacerbation of the congestive heart failure that they’ve had for the last 10 years. If the cardiology consultant documents 'congestive heart failure', this would not be counted as a complication. But if the consultant uses the term 'acute-on-chronic systolic heart failure', reimbursement is increased by more than $20,000."
5. Be ready for RAC auditors. Every hospital that participates in the Medicare program will be subjected to the RAC audit process. Dr. Elion says hospitals have to be mindful of this and be ready to face the audit on any given day. He says attending seminars hosted by organizations, such as HIMSS, can help hospitals better prepare for RAC audits.
Dr. Elion adds that many hospitals have gone to great lengths to prepare themselves to react to the financial repercussions instead of proactively preventing them, which he says is wiser. "There are hospitals out there that have created contingency funds where they set aside millions of dollars in case they are penalized and have to pay money back to Medicare," he says.
6. Consider healthcare information technology. Installing a system that will assist with improving medical documentation can help minimize the incidence for billing errors and the possibility of being penalized with triple damages. The market for healthcare information technology has expanded tremendously after the creation of the HITECH portion of the American Recovery and Reinvestment Act of 2009, which will distribute incentive payments to healthcare providers demonstrating meaningful use of electronic health records starting in 2011. Dr. Elion suggests hospitals to take advantage of the sophisticated technology coming out of the market instead of forcing physicians to memorize thousands of ICD-9 codes.
"There are some very sophisticated technology available now that can help hospitals really sustain institutional memory," he says. "Some of these systems have extensive built-in expertise that makes knowledge of best practices for clinical documentation readily available to physicians, clinical documentation specialists, coders and administrators."
Learn more about Chartwise:CDI.
Jon Elion, MD, associate professor of medicine at Brown University and founder of ChartWise Medical Systems, says if a RAC found a hospital overbilled Medicare $100,000 based on an audit of 10 percent of that hospital's medical charts, the findings would be extrapolated for a total of $1 million in overbilling over the entire hospital. He adds a hospital could also be faced with paying triple damages if the audit shows intent to make false claims.
Here, he shares six ways a hospital can be more proactive in preventing billing errors to avoid incurring monetary penalties while maximizing Medicare reimbursement.
1. Standardize language in medical charts and coding departments. RACs look for inconsistencies between what physicians write in medical charts and what coders bill for. Dr. Elion says billing errors often occur in coding departments, where coders are responsible for translating what physicians document in medical charts into corresponding ICD-9 codes, and hospitals may find themselves in trouble if the coding is not supported by the physician’s documentation.
"For example, let's say I assessed a patient and wrote an order for them to get potassium tablets," Dr. Elion says. "The coder might read the medical chart and conclude the patient had hypokalemia, which is the medical term for a low blood potassium level. The coder is medically correct, but a RAC auditor would say that this can’t be billed for that because the physician never actually used that word in the chart."
2. Implement an internal audit process. Randomly auditing medical charts and coding and billing departments internally will help your hospital adopt a culture of accuracy and completeness to avoid billing errors. To help hospitals prepare for both internal audits and RAC audits, Dr. Elion suggests researching published material on what RAC auditors look for. "You don't want to wait for the outside auditors when you can be looking for these errors yourself," he says. "Many hospitals don't realize that RAC auditors are publishing what they are looking for, so why not find that out?"
3. Provide rewards for good behavior. Dr. Elion suggests positive reinforcement over negative reinforcement for physicians and staff that comply with good practices in clinical documentation and coding/billing.
"There are some hospitals that offer financial incentives to full-time physicians for being good citizens and collaborating with hospitals in ensuring more complete and accurate medical charts," he says. "There are also other hospitals that issue penalties per each chart that has incomplete documentation. I encourage positive reinforcement over penalizing physicians."
4. Institute a clinical documentation improvement program. Hospitals should consider a comprehensive program for improving clinical documentation, including hiring clinical documentation specialists, who are responsible for ensuring medical charts are complete and accurate without asking any leading questions. "A CDS would want to check with a physician and ask him or her 'What would be the diagnosis for this?' as opposed to 'Isn't this hypokalemia?' says Dr. Elion.
Dr. Elion says that through a clinical documentation improvement program, hospitals can also recover better Medicare reimbursements. "Let's say a patient has an abdominal operation, then has an exacerbation of the congestive heart failure that they’ve had for the last 10 years. If the cardiology consultant documents 'congestive heart failure', this would not be counted as a complication. But if the consultant uses the term 'acute-on-chronic systolic heart failure', reimbursement is increased by more than $20,000."
5. Be ready for RAC auditors. Every hospital that participates in the Medicare program will be subjected to the RAC audit process. Dr. Elion says hospitals have to be mindful of this and be ready to face the audit on any given day. He says attending seminars hosted by organizations, such as HIMSS, can help hospitals better prepare for RAC audits.
Dr. Elion adds that many hospitals have gone to great lengths to prepare themselves to react to the financial repercussions instead of proactively preventing them, which he says is wiser. "There are hospitals out there that have created contingency funds where they set aside millions of dollars in case they are penalized and have to pay money back to Medicare," he says.
6. Consider healthcare information technology. Installing a system that will assist with improving medical documentation can help minimize the incidence for billing errors and the possibility of being penalized with triple damages. The market for healthcare information technology has expanded tremendously after the creation of the HITECH portion of the American Recovery and Reinvestment Act of 2009, which will distribute incentive payments to healthcare providers demonstrating meaningful use of electronic health records starting in 2011. Dr. Elion suggests hospitals to take advantage of the sophisticated technology coming out of the market instead of forcing physicians to memorize thousands of ICD-9 codes.
"There are some very sophisticated technology available now that can help hospitals really sustain institutional memory," he says. "Some of these systems have extensive built-in expertise that makes knowledge of best practices for clinical documentation readily available to physicians, clinical documentation specialists, coders and administrators."
Learn more about Chartwise:CDI.