American Health Lawyers Association
Annual Meeting
From Audit to Action: Strategies and Tips for Managing
the Organization’s Response
Boston, MA
June 29, 2011 Patsy Hathorn
Eugenia (Genie) Stark Thomas
Balch & Bingham LLP Mississippi Baptist Health Systems
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Today’s Agenda
I. Background
II. Before the Audit: Designing a Proactive Response
III. The Process in Action
IV. Action Plan Phase
• Case Study
V. Appeal Strategy – Leveraging to Results
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I. Background
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Current Audit Landscape
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RAC Activity
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RAC Top Issues
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Baptist Profile
• Licensed beds: 667
• Percent occupancy: 73%
• Average length of stay: 5.6
• Inpatient admissions: 21,000
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Baptist Profile
Self Pay Medicaid
4% 8%
Commercial
9%
Medicare
48%
Managed Care
31%
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II. Before the Audit: Designing a
Proactive Response
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A wise man will make more opportunities than he
finds.
– Francis Bacon, Essays, 1625
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Key Features of an Effective Response
Team design
Effective workflow
Internal auditing
Team Empowerment
Follow-through
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The Anatomy of a Team
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The Team Structure
Case Management
Health Information Management
Compliance
Patient Care Services
Risk Management
Patient Financial Services
Cardiovascular Services
Oncology
Pharmacy
Home Health
Medical Management (physician employee/clinic oversight)
Medical Staff UR
Legal, if available
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The Team Structure
REPORTING STRUCTURE
CMO, CLO, CCO, COO, CFO
AUDIT COORDINATOR Accountability
Physician Clinical HIM Risk Compliance Legal Billing PFS
UR Departments Management
Coding
Case Management
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The Team Function
Defense Audit Team
– Track requests
– Track results
– Track $$$$
– Bi-directional feedback
– Strategy
– Roll-out
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Effective Workflow
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Individual commitment to a group effort – that is
what makes a team work, a company work, a
society work, a civilization work.
- Vince Lombardi
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We must all hang together or most assuredly we
shall hang separately.
- Benjamin Franklin
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Internal Auditing
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Internal Auditing: Getting Started
CERT reports
PEPPER reports
RAC reported issues
OIG work plan and reports
High $$, high error DRGs
Commercial payor audits
ASK
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Software and Pre-Emptive Audits
Run identified issues
Identify trends and patterns
Assessing true amounts at risk
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Opportunity is missed by most people because it is
dressed in overalls and looks like work.
- Thomas Edison
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III. The Process in Action
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The Process in Action
All requests mailed to P.O. Box
Logged into database
Claim status and responsibility assigned
Medical necessity versus DRG
Results of review logged
Feedback to Coordinator and Department
Discussion
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Discussion Period
Timing – short fuse
Who?
What do they say?
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The Process in Action
Demand Letter
Appeal decision
Responsibility assigned
Feedback from Legal
$$ Tracked
Results presented to Audit Team
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2010 RAC Takebacks by claim status and letter date
Claim Status Claims Tot Medicare Pmts Tot Dollar Outcome
RAC Determination - Automated Takeback (Over) 1 208 0
RAC Determination - Overpayment 5 0 20,815
Response - Accept Overpayment 48 149,446 93,996
Response - Discussion Denied 1 14,994 6,581
Response - Demand Letter Received 1 14,454 9,256
1st Level - Notification of Intent to Appeal 3 14,349 13,968
1st Level - Decision to Appeal 12 27,683 77,592
1st Level - Appeal Filed 34 113,932 23,704
1st Level - Appeal Denied 2 8,843 12,219
1st Level - No Further Action 2 15,285 0
Total: Selected Filter(s) 109 359,195 258,130
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2010 Requests, RAC No Takeback, Underpayment by Claim
Status and Letter Date ($ Amount)
Claim Status 2010
RAC Determination - No Takeback
Claims 153
Tot Medicare Pmts 2,368,192
Tot Dollar Outcome 0
RAC Determination - Underpayment
Claims 3
Tot Medicare Pmts 30,551
Tot Dollar Outcome 13,471
Total: Claims 156
Total: Tot Medicare Pmts 2,398,744
Total: Tot Dollar Outcome 13,471
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IV. Action Plan Phase
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Action Plan Phase
“All staff” engagement
Root cause analysis
Looking at “why” and “how”
Documentation, policies, procedures &
protocols
Where did the process break down?
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Talk doesn’t cook rice.
- Chinese Proverb
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Action Plan Phase
Challenges and Issues
Old habits are hard to break
Changing attitudes toward physicians
New services, new service lines
Lack of empowerment/authority
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Action Plan Phase
Reporting back and reporting up
Defense audit team meetings
– Empowerment
– Escalation
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Action Plan Phase
Education and Training
C-Suite Awareness
Billing Personnel
Coders
Physicians
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Action Plan Phase
Policy and Process Changes
Admissions
Case management involvement
Timing of UR
Standing orders
Departmental policies
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Case Study - Responding to
Connolly in a Medical Necessity
Review
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Case Study
RAC medical necessity review of MS-DRG 249
Concurrent DRG validation
MS-DRG 249: Percutaneous cardiovascular
procedures with non-drug-eluting stent without
MCC
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Case Study
Denial based on lack of medical necessity –
reviewer argued inpatient care was not
warranted
Potential trend identified by cluster of denials
Root cause analysis – cath lab admissions
– Forms
– Policy
– Process
– Education gap
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Case Study
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Case Study
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Case Study
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Case Study
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Case Study
Policy examinations
- and revision
Process examination
- and revision
EDUCATION
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V. Appeal Strategy: Leveraging to Results
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Deciding What to Appeal
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Deciding What to Appeal
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Leveraging Earlier Work in Appeals
Audit notes and discussion letters
Focused research – build the library
Templates and scripts
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Appeal Strategies – Other Considerations
When to get legal counsel involved
Value added through legal counsel
Selecting the right appeals team
Use of consultants
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The difference between perseverance and obstinacy
is that one comes from a strong will, and the other
from a strong won’t.
- Henry Ward Beecher
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QUESTIONS?
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Thank you!
Eugenia (Genie) Stark Thomas Patsy Hathorn
Balch & Bingham LLP Mississippi Baptist Health Systems, Inc.
601-965-8177 601-973-1681
gstarkthomas@balch.com Phathorn@mbhs.org
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