Claims Processing Ongoing Monitoring and Auditing

Key Points:
  • Claims processing is the third highest priority for Compliance Officers.
  • The key to effectiveness is a Quality Assurance Program and Quality Control Reviews.
  • Twenty questions Compliance Officers can ask regarding ongoing auditing.

In the Department of Health and Human Services, Office of Inspector General’s (OIG) Compliance Program Guidance for Hospitals, claims development and submission is highlighted as a primary compliance high-risk area and an area where compliance program effectiveness can be evidenced and benchmarked. Both the Department of Justice (DOJ) and OIG have identified false claims cases as their number two enforcement priority, after arrangements with referral sources. In the 2020 Eleventh Healthcare Compliance Benchmark Survey, respondents reported this area as the number three compliance priority after HIPAA Privacy/Security and arrangements with referral sources. Program managers have responsibility for ongoing monitoring, not the Compliance Officer. They are the ones most familiar with their own operations. They should keep track of changes with payment rules and regulations, translate those changes into policies and procedures to act as internal controls, train their staff on the written guidance, and verify whether they are accurately carrying out their responsibilities. All of this should be part of a claims processing quality assurance program (QAP) that includes quality control reviews (QCR). QCRs are reviews where claims are randomly selected for “real time” testing for errors, before submission for payment. Errors should be tracked to identify any emerging error patterns involving coders, Diagnosis Related Groups (DRG), physicians, etc. Coders can then be educated on why the denial is occurring and how to prevent its recurrence. If a pattern of error or denials emerges for a coder or physician, it should result in retraining or investigating for the cause.

The OIG advises that performing benchmarking analyses can become a baseline for evidencing compliance improvement and be used to maintain trending information and help identify root causes of errors and denials. It can also be used to “benchmark” improvements in error reduction. Drilling down on data can identify coding errors linked to: (a) a need for additional instruction in an area, (b) problems with individual coders, or (c) physician documentation or eligibility problems. The findings can be used to develop focused educational programs to improve coding and billing accuracy and limit audit exposure. Monitoring cannot only measure compliance and accuracy, but it can also improve cash flow and limited exposure of payor audits.

Ongoing auditing needs to be conducted by parties independent of the operation. It should focus on verifying that program managers are properly engaged in meeting their ongoing monitoring obligations and validating that the results are reducing error rates.

Questions that Compliance Officers can Ask as Part of Ongoing Auditing
  1. Is there a process to keep track of regulatory and rule changes that affect their operations?
  2. Have controls been established for all regulatory issues relating to billing and coding?
  3. How are coders being kept aware of changes in rules and regulations?
  4. How is the staff being trained on the changes in policies and procedures?
  5. Are there internal controls that address regulatory changes?
  6. Do policies and procedures address changes in rules and regulations?
  7. Are policies and procedures scheduled for review and updated regularly?
  8. Are coders being tested to see if they are following the written guidance correctly?
  9. Are coders accurately carrying out their responsibilities under the rules?
  10. Are all errors tracked to identify any emerging patterns involving coders, DRGs, physicians, etc.?
  11. Are identified weaknesses remedied promptly by control changes, education, and other corrective actions?
  12. Is there follow-up testing to verify that control deficiency remedies are effective?
  13. Is there a QAP that includes frequent online testing?
  14. Is educational follow-up provided when someone makes a billing error?
  15. Where individuals are found to be error prone, are they required to undergo refresher training?
  16. If a pattern of error develops involving DRGs, is the cause investigated?
  17. Do they maintain trending data on error rates involving DRGs, coders, and physicians?
  18. Is there an annual audit plan to review billing and coding?
  19. Do the audits address how well monitoring is taking place?
  20. Do audits validate reduced error rates, costs of correction, and mitigation of liability exposure?

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Strategic Management compliance consultants have over 40 years of experience in providing research, analysis, and program support for privacy and security rule compliance. Call us at (703) 683-9600 or contact us online for a tailored assessment of your organization’s particular needs.