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Preparing for Medicare Audits
October 2, 2008
When a financial audit is inevitable, often the best way to prepare is with a self-audit. That’s the approach University of Texas Health Center-Tyler is taking to get ready for the inescapable Medicare Recovery Audit Contractor program
Beginning this fall, the Medicare program will begin phasing in audits of hospitals and some group practices state by state, primarily focusing on recouping overpayments to providers for certain types of treatments.
To prepare for the RAC initiative, the 114-bed Texas hospital is doing what many experts recommend. It’s using data mining to analyze its Medicare claims, particularly those most likely to be the focus of an audit. The hospital is analyzing whether it has properly coded and documented claims for the kinds of cases, such as 24-hour hospital stays, that the RAC program pinpointed during a three-year demonstration project in six states, says Shannon Roshan, administrative director, revenue cycle operations.
The hospital is using data mining software to dig into data from its clinical and financial systems as well as other applications. It’s carefully analyzing whether any claims are incorrect so it can promptly send an adjusted bill to Medicare in advance of an audit. It’s also tallying how many cases it has had in each target area, such as 24-hour stays, so it can begin gathering all necessary documentation in advance of an audit. And it’s using the data to support a clinician education program.
Providers face the potential of having millions of dollars in Medicare payments deducted from future billings as a result of overpayments identified by the RAC program. So it’s important that they begin taking steps now to minimize the impact on the bottom line. Information technology, no doubt, will play a role in the complex undertaking.
Virtually every U.S. hospital will eventually face a Medicare audit, predicts Julie Chicoine, R.N. compliance director for Ohio State University Medical Center, Columbus. “No one is safe from scrutiny,” stresses Chicoine, who is a nurse, attorney and claims coder.
To read the Special Report from the October issue of Health Data Management on preparing for the RAC program, click here.
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