Transcript Slide 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
Association of Healthcare Internal Auditors
2009 Annual Conference
About Us:
The Methodist Hospital System Overview
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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
Association of Healthcare Internal Auditors
2009 Annual Conference
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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: 6 - 20 years
• Credentialed: 21 designations
– CIA, CISA, CCSA, CHC, CISSP, CHFP, CPA, MBA
• Recognized: IIA’s Recognition of Commitment Award
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
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.
Finding the Leaks
• So how do you uncover
the leaks?
• Where should you look?
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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)
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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.)
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Using CAATs to
Uncover Leaks
• Develop tests to uncover lost reimbursement.
Risks to consider when designing tests are:
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Lost charges (i.e. Implants, ER level charges, etc.)
Incorrect assignment of revenue codes
Missing modifiers
Late charges
Incomplete or no reconciliation process
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How to Uncover Leaks in
Emergency Department
Purpose of Test:
• To identify missing ER charges. Specifically,
- ER level visits
- Missing injection/infusion charges
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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
- CDM Number
- CDM Description
- Modifier
- Charge Amount
- Patient Type
- CPT Code
- Admit Source Code
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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) =
• 99281 - 99285
• 99291
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How to Uncover Leaks in
Emergency Department
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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
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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
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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
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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
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Emergency Department –
Results & Next Steps
• Results:
– 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
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warrant re-billing accounts.
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
- Insurance Plan Code
- CDM Number
- CDM Description
- Modifier
- Date of Service
- Charge Amount
- Patient Type
- CPT Code
- UB Revenue Code
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How to Uncover Leaks in
Cardiac Cath Lab
Procedure Steps:
1. Identify your top 5 most costly implants.
2. Identify the CDM numbers associated with the
procedures that correspond to those implants.
3. Obtain CPT codes for the procedures that correspond
to those implants.
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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,'00254607','00329086','00385153',
'00376079','00387969','00388918')
5. Summarize the resulting file by account number to obtain a
master file of patients that had Cath Lab implant
procedures performed
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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.
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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
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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.
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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)
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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
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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
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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
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How to Uncover Leaks
in Pharmacy
Procedure Steps (cont.):
4.
Calculate an average daily charge by dividing the
charge amount field by the count field.
Average Daily Charge = Total Charge Amount
Count
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How to Uncover Leaks in
Pharmacy
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How to Uncover Leaks
in Pharmacy
Procedure Steps (cont.):
5.
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.
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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.
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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
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Questions
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