Hospitals spend a significant amount of time and labor responding to audits by recovery audit contractors. Semi-automated reviews — the newest type of review introduced by CMS — presents both a challenge and an opportunity for hospitals trying to protect their revenue. Scot McLeod, a vice president at Compliance 360, explains how automated systems can help hospitals manage RACs' reviews and make semi-automated reviews less of a challenge and more of an opportunity.
Types of reviews
Automated reviews are those in which a hospital has made an obvious error in a claim, allowing the RAC to notify the hospital and automatically recoup the money. Mr. McLeod provides the example of a claim for a prosthetic limb for a deceased patient: the error is clear and CMS would automatically recoup the cost.
In contrast, a complex review involves claims where it is unclear whether there is an error. For example, a patient needing a minor procedure and is coded as inpatient is suspicious, but not obviously invalid, Mr. McLeod says. This type of review requires four steps:
1. The RAC requests that within 45 days the hospital provide all records related to the claim in question.
2. The RAC has 60 days to make a decision on whether the claim is valid or not.
3. If the RAC decides the claim is invalid, the hospital has 120 days to file an appeal.
4. The hospital can continue to appeal to higher levels of governing bodies until it reaches the federal district court.
In all steps, if the hospital misses a deadline the money from the claim is automatically recouped.
The semi-automated review is a hybrid of automatic and complex reviews because it involves a claim that is more suspect than those for complex reviews, but less obvious than those for automatic reviews. Medically unlikely events are one area of expected focus for semi-automated reviews. Mr. McLeod says one example of such an event is making an incision and draining a post-operative wound infection more than three times in one day for a given patient. In this case, the RAC may give the hospital one chance — 45 days — to provide records proving the accuracy of the claim. The RAC either approves the claim or denies it and recoups the money.
The challenge
The challenge with the addition of the semi-automated review is the added volume and complexity of reviews a hospital can respond to, each with its own deadline and its own claim that needs to be investigated. With semi-automated reviews, the hospital needs to decide whether to defend an audited claim or accept the losses and move on. "It is a challenge to make that determination," Mr. McLeod says. "You have to stop processes, get to the right people and dig into records, thus creating additional overhead for hospitals." Most hospitals were understaffed and overburdened before semi-automated reviews were introduced, he says. He suggests automation can ease hospitals' burden and help them avoid revenue losses.
The opportunity
Automation allows the hospital's RAC coordinator to "spend less time serving as a traffic cop watching the dates, and more time getting people to respond and give thoughtful input," Mr. McLeod says. An automated system can provide reminders for due dates at any interval and can assign tasks to people. The system can also create a dashboard that allows other employees and executives to view the hospital's total revenue exposure from claims currently in play.
In addition to financial costs, the audit management process may also cause a cost in patient care, Mr. McLeod suggests. He says manual audit management is a distraction from hospitals' primary mission — patient care and patient health. With automation, the hospital's leaders, physicians and staff can worry less about audits and focus more on delivering high quality care, he says.
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Types of reviews
Automated reviews are those in which a hospital has made an obvious error in a claim, allowing the RAC to notify the hospital and automatically recoup the money. Mr. McLeod provides the example of a claim for a prosthetic limb for a deceased patient: the error is clear and CMS would automatically recoup the cost.
In contrast, a complex review involves claims where it is unclear whether there is an error. For example, a patient needing a minor procedure and is coded as inpatient is suspicious, but not obviously invalid, Mr. McLeod says. This type of review requires four steps:
1. The RAC requests that within 45 days the hospital provide all records related to the claim in question.
2. The RAC has 60 days to make a decision on whether the claim is valid or not.
3. If the RAC decides the claim is invalid, the hospital has 120 days to file an appeal.
4. The hospital can continue to appeal to higher levels of governing bodies until it reaches the federal district court.
In all steps, if the hospital misses a deadline the money from the claim is automatically recouped.
The semi-automated review is a hybrid of automatic and complex reviews because it involves a claim that is more suspect than those for complex reviews, but less obvious than those for automatic reviews. Medically unlikely events are one area of expected focus for semi-automated reviews. Mr. McLeod says one example of such an event is making an incision and draining a post-operative wound infection more than three times in one day for a given patient. In this case, the RAC may give the hospital one chance — 45 days — to provide records proving the accuracy of the claim. The RAC either approves the claim or denies it and recoups the money.
The challenge
The challenge with the addition of the semi-automated review is the added volume and complexity of reviews a hospital can respond to, each with its own deadline and its own claim that needs to be investigated. With semi-automated reviews, the hospital needs to decide whether to defend an audited claim or accept the losses and move on. "It is a challenge to make that determination," Mr. McLeod says. "You have to stop processes, get to the right people and dig into records, thus creating additional overhead for hospitals." Most hospitals were understaffed and overburdened before semi-automated reviews were introduced, he says. He suggests automation can ease hospitals' burden and help them avoid revenue losses.
The opportunity
Automation allows the hospital's RAC coordinator to "spend less time serving as a traffic cop watching the dates, and more time getting people to respond and give thoughtful input," Mr. McLeod says. An automated system can provide reminders for due dates at any interval and can assign tasks to people. The system can also create a dashboard that allows other employees and executives to view the hospital's total revenue exposure from claims currently in play.
In addition to financial costs, the audit management process may also cause a cost in patient care, Mr. McLeod suggests. He says manual audit management is a distraction from hospitals' primary mission — patient care and patient health. With automation, the hospital's leaders, physicians and staff can worry less about audits and focus more on delivering high quality care, he says.
Learn more about Compliance 360.
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