High Value Revenue Cycle Audits

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High Value Revenue Cycle Audits

• AHIA 2009 Annual Conference
• September 1, 2009

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Speakers

• Richard Williams
• Richard is a Director in Protivitis Dallas
  office and a key leader in Protivitis Healthcare
  Revenue Risk Solutions practice. Richard has
  more than 11 years professional experience
  providing operational, financial, and regulatory
  consulting and internal audit services to the
  healthcare industry. Prior to joining Protiviti,
  Richard was a Project Manager at Arthur Andersen
  focusing on healthcare internal audit and risk
  consulting.
• Don Billingsley
• Don is a Senior Manager in Protivitis Dallas
  office and a key leader in Protivitis national
  healthcare practice. Don has more than 16 years
  experience working in the healthcare industry and
  has worked with numerous healthcare providers to
  assess and improve their revenue cycle operations
  and processes. Prior to joining Protiviti, Don
  worked as a revenue cycle consultant at Arthur
  Andersen and held a position as a care manager
  and compliance auditor for one of the largest
  diversified specialty healthcare management
  organizations.

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Agenda

• Obtain an understanding of the key activities
  performed, risks and typical deficiencies that
  exist within the following revenue cycle
  components
• Access Utilization Review
• Charge Capture
• Billing / Collections Denials Management
• Discuss audit methodology, approach, and scope
  setting considerations.

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Revenue Increases
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Obtain an Understanding of Key Revenue Cycle
Components and Risks
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The Revenue Cycle
Healthcare providers typically fail to realize as
much as five percent in net revenue due to a lack
of effective internal controls mitigating
financial, regulatory and operational risks.
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Key Challenges

• Information is traditionally managed in isolation
  by different departments with very little
  integration
• Multiple points of patient entry
• Numerous managed care contracts and lack of
  familiarity with requirements
• Legacy technology solutions and workflow
  limitations
• Multiple constituencies require consensus and
  tend to resist change
• Adequacy of training programs
• Payer stall tactics and decreasing reimbursement
• Poor auditing, reconciliation, and monitoring
  processes
• Unequal priority for administrative
  responsibilities as that placed on patient care

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Access Utilization Review
Patient access is one of the most important areas
that impact patient satisfaction and hospital
reimbursement. Ineffective processes typically
result in patient dissatisfaction, billing
problems, excessive insurance denials, and
extensive rework activity.

• Scheduling gathering patient information to
  schedule a patients test, procedure or stay
• Admissions/Registration verifying benefits to
  validate insurance coverage, obtaining
  pre-treatment authorizations and any remaining
  information not captured during
  scheduling/pre-admission process
• Utilization Review the managing of admission
  reviews, pre-certification reviews, medical
  necessity reviews, continued stay reviews,
  patient care reviews and retrospective reviews

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Charge Capture
On average, organizations are losing one percent
of revenue to errors in the chargemaster and/or
charge capture and many hospitals are not aware
of the degree to which they may be missing
charges.

• Charge Capture documentation, posting and
  reconciliation of charges for services rendered
• Chargemaster listing of charges for procedures,
  medications, supplies and services rendered
• Charge Validation / Integrity ensuring charges
  posted are complete and accurate

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Billing / Collections Denials
As much as 25 - 30 of all claims are rejected
or denied at some point in the collection process
with 5 - 9 of net revenue being directly
impacted, a large portion of which is lost and
never recovered. At least 90 of all denials
considered unrecoverable can be prevented with
improved controls.

• Billing sending a bill to a patient and/or a
  claim to a third-party payer for reimbursement
• Collections / Cash Posting verifying the status
  of outstanding claims and posting payments
  received
• Denials / Underpayments Management the process
  of collecting, tracking, reporting, trending,
  forecasting, measuring and managing denied or
  underpaid claims
• One of the best indicators to help determine the
  effectiveness of a providers revenue cycle is
  to look at denied claims.

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Methodology and Scope Considerations
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Methodology
The Protiviti Key represents our overarching
Methodology that we apply to every engagement in
order to unlock value and ingrains concepts of
problem solving and benchmarking.
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Methodology

• We commonly use the Six Elements of
  Infrastructure for categorizing operational
  practices, potential issues, understanding where
  problems either exist or may occur within the
  organization, and drawing conclusions to form the
  basis for recommendations.

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Audit Objective

• The primary objective of performing a revenue
  cycle audit should be to evaluate the
  effectiveness of internal controls surrounding
  existing revenue cycle processes in order to
  identify business process and/or system
  improvement opportunities within existing
  operations that, when implemented, would lead to
  enhanced profitability and strengthened
  compliance practices. In addition, an entity and
  process level view should be considered.

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Audit Approach

• The approach should be designed to gain an
  understanding of the business as a means to
  identify, source and measure risk at both the
  entity and process level.
• What are the key business risks that impact the
  process?
• How and how well are those risks being
  controlled?
• What key measures are used to monitor the process
  and are they the right ones and reliable?
• How efficient is the process in operation?
• How can the process be improved to bring its
  performance closer to leading standards?

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Control Framework Example
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Scoping Considerations

• Design Review vs. Operating Effectiveness Testing
• Documentation Review vs. Observations
• Regulatory Compliance
• Revenue Cycle Systems and Application Controls
• New System Implementations
• Net vs. Gross Revenue Impact
• Data Analysis / Sampling
• Indicators of Need / Benchmarking
• Revenue Cycle Diagnostic
• Frameworks / Tools

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• Please feel free to contact us if you have
  additional questions. Thank you again for your
  time!
• Richard Williams
• Protiviti Director and Healthcare Revenue Risk
  Solutions Leader
• Direct 469.374.2469
• Email richard.williams_at_protiviti.com
• Don Billingsley
• Protiviti Senior Manager and Healthcare Revenue
  Risk Solutions LeaderDirect 469.374.2519Email
  don.billingsley_at_protiviti.com