Skills for the New Healthcare Internal Auditor

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Skills for the New Healthcare Internal Auditor

• Revenue Cycle

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WELCOME TO MY WORLD!

• What is the Revenue Cycle?
• It is the entire process From scheduling, to
  pre-admission, to registration, to charge
  capture, to HIM coding, to patient financial
  services/business offices claims submission, to
  insurance resolution, to payment in fullwith or
  without financial counseling or bad debt.
• Each component has potential for audit.. But
  first lets learn some of the basics.

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• Outlining
• The
• Revenue Cycle

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Definition of basic terms

• Admitting-Central Registration-Patient Access
• Scheduling central scheduling vs each dept does
  their own
• Charge capture the process of the revenue
  generating departments marking charge tickets or
  order entry.
• Health Information Management/HIM medical
  records
• Business Office Patient Financial Services
• Hold days - of days hold before dropping off
  the computer (usually 4-7 after d/c. Need to
  wait 72 hours for all Medicare accounts.)

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More Terminology Help

• CPT- procedure codes that outline what procedure
  was done. (updates Jan yearly) CPT 0-9999
• HCPC a 2nd type of procedure coding but
  alphabetical. J/pharmacy G C/usually
  temporary Medicare only codes (updates April
  yearly)

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Health Information Management/Medical Records

• All visits require an ICD/diagnosis code before
  the claim will be processed by the payer
• HIM coders take the physician dictation/notes and
  assign ICD as well as CPT codes, where
  appropriate
• Coding backlog occurs due to physician delays,
  record delays and coder shortages cash delays.

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How are charges submitted to payers?

• IT creates billing document.
• UB-04/837I form is for hospital charges sent to
  payer.
• 1500/837P form is for physician/professional
  charges.
• Forms are sent electronically (65) or hardcopy
  to payers/health plans
• HIPAA Transaction Sets dictated standardization

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What is an AR Day?

• An indicator of how fast the cash is moving
• Different ways to count an AR Day
• From Final bill to paid in full
• From Discharge to paid in full
• Gross vs net days
• Gross without deductions
• Net with allowance/reductions for different
  items bad debt, contractuals, etc.

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Redesign Revenue Cycle Opportunities - WIN
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How Medicares Common Reimbursement Systems Work

• Inpatient Diagnostic Related Groups/DRG
• Uses Dx, procedures where an end coder groups
  into payment categories (1 payment/1 stay)
• Outpatient Ambulatory Payment
  Classification/APC (Each CPT could be paid)
• Uses CPT and HCPC codes to group clinically
  and
• financially related codes into APC payment
  groups
• Skilled Nursing facilities Resource Related
  Group (a of days 1 RUG payment)
• Home Health Home Health Related Groupers (1
  HHRG for each 60 day care plan)

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Reimbursement Systems

• Remittances payment document from the payers
• What type of payment arrangements are hospitals
  experiencing thru contracting as well as federal
  and state mandated
• Prospective payment systems payment based on
  something besides charges Diagnosis, CPT codes,
  care plans. (EX Medicare PPS Inpt/DRG
  Outpt/APC)
• Fee for service payment based on charges
• Per Diem payment based on a per day rate
• Capitation payment based on covered lives, per
  member, per month

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• Charge Description
• Master Challenges

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National Issues with CDM/Charge Description
Masters

• Congress Sub Committee/Ways and Means -focusing
  on hospital charge structure
• Under/Uninsured focusing on how hospitals
  charge and collect

• MILLION DOLLAR QUESTIONcan you explain how your
  charges were created to your community?

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Golden Rule for Charging

• Use Medicare Guidelines for all payers
• No care team/charge capture staff member can even
  tell who the payer is for the pt.
• Question How are charges to be created?
• Answer Cost plus a reasonable mark up

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The Road Ahead

• MedPAC survey of hospital charge-setting
  practices (9-04 6/05)
• CDM-lgr/complex
• No systematic relationship cost to charge
• Mark-ups vary by service
• low cost itemshigher markup pharmacy, supplies
  and new services

• Payers Bill of Rights
• Ca Assembly Bill 1627 (eff 7-1-04)
• Hospitals have a written or electronic copy of
  their CDMs available on location
• Clear and Conspicuous notice required in the ER,
  admission and billing office
• List of 25 most commonly charge services
  available upon request
• CDM submitted to the state on an annual basis

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The Charge Description Master

• Welcome to the charge master CDM
• It houses all charges that are billable
• It houses all stats-only items
• It houses all hard coded CPT codes
• It houses all activity used for productivity
• It requires at least yearly updating with changes
  in the CPT and HCPC manuals
• It houses all regulatory billing requirements

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Revenue Opportunities within the CDM

• Key to success is department ownership
• Key to success is understandable charge
  descriptors. The MOM TEST!
• Key to success is ongoing CDM Integrity Team work
  in identifying revenue opportunities, changing
  regulations and teaching to all effected
  individuals.
• Key to success is automation for research,etcbut
  only with the above elements!!
• Computers are useless. They can only give you
  answers Pablo Picasso

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Charge Protocol Manual

• Explore how charges are being created.
• Who, within each department, is inputting
  charges? Charge tickets, order entry, bar
  coding?
• Interview staff all 3 shifts to determine
  who/how inputting of charges.
• Use actually billing documents UB04 and
  itemized statements to see the actual charge
  capture.
• Develop written protocol on HOW TO!

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• Patient Financial Services/Business Office

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Hot Spots Within Patient Financial
Services/Business Office

• Credit Policy/CP easily understood by the
  patients the staff.
• Communicated to the patients early and throughout
  the process
• Documentation in the patients history shows CP
  used.
• If not resolved within CP and not eligible for
  charity, turn to bad debt.
• EX) Inpt/120 days from D/c Outpt/90 days d/c

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More Uglies with PFS

• Lost charges sent to the floor, never charged
  for charted, never charged
• Late charges claims dropped off IT, then
  charges submitted.
• Cost of both if identified, adjusted bills sent
  to the payers.
• Patient receive 2 statements from payers and
  facility.

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Lets Look at the Billing Documents UB-04s and
itemized Statement

• UB-04 sent to the payers hardcopy and
  electronic
• Itemized statement usually sent to the patient.
  Payers, on request only.
• Tells the story of the CDM with billable
  services.
• Roll the itemized to the UB without manual
  intervention

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UB92
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Tracking and Trending

• Last but not least, keep the focus
• PREVENT REPEAT REWORK.
• PFS has a massive amount of information.

• Sample Trend late charges by dept eligibility
  denials by area Medical necessity denials by CPT
  code manual touching to the UB-92 prior to
  submission, etc.

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AR Systems Contact Info

• Day Egusquiza, President
• Daylee1_at_mindspring.com
• 208-423-9036
• Free Info Line informal updates, process ideas,
  etc.
• HAVE FUN!