In my recent article “your audit losses begin in medical records” I discussed the role of the release of information officer in the dramatic impact that they can have upon audit losses. In this series we want to more deeply delve into how to consolidate your audit losses within a facility to understand where losses occur, how losses occur, and how to correct those losses. As we review sites and payers for explanations and how to achieve better cost-containment is always our primary goal is to eventually reach the root cause of loss. There is a culture within the audit community of bill rectification but often times the discovery process stops there and does not dig deeper into finding the root cause of loss.

In order to discover those losses let’s review briefly the role of the release of information officer. It is my contention that this role is often under appreciated in consideration of the large number of decisions this individual must make each day with regard to releasing information. The release of a large file for instance that appears to be a risk assessment DRG or a APC review could in fact be a “desk audit”. A desk audit is a review of the medical record, orders, and bill that is done as a one sided only review and third-party audit firms will then submit this information to the payer which recommends a refund for the items identified in the audit. This type of audit often flies under the radar at many locations and is managed as a typical audit refund or payer denial. What it is in fact, is an audit that has only one perspective is worthy of an internal review of the same data sets used by the external auditor to do their review. These desk audit reviews happen in two ways. One is the way that I just described where a record is inadvertently sent to a third-party audit firm or payer under the guise of a different type of review or released because the release of information officer does not understand that they are consenting to an audit. Second way that this audit can occur is by a facility agreeing to allow desk audits and if you’re one of those facilities I would strongly recommend you review this policy as it is a losing proposition for the side not represented by an auditor.

As we consider consolidating if facilities audit losses we need to think of the ways in which audit losses occur:

1. Government audits-these audits occur through requests such as RAC, MAC, ZPIC, CERT and etcetera. Facilities usually have very little control over these audits, they are not allowed a fee they are subject to know internal audit policy and the rules are made up by CMS and other Orgs in your ability to stay on top of this game is going to be difficult to say the least

2. Commercial audits-these audits occur through requests from the payer and/or the third-party audit firm. These can include retrospective reviews DRG, APC, and risk assessment. These audits can be subject to audit policy, audit fees, and vigorous defense by the facility.

3. Business office denials-these  “audits” are not considered audits by many facilities. While much of what comes across here is appealed, much is not. These denials are in fact an audit and should be treated as such especially in the realm of audit tracking. 

To understand the facilities complete loss in the audit venue and where cost-containment may occur you need to consider all three areas outlined above. What commonly occurs is that auditing or a nurse auditor manages the commercial element of auditing and perhaps is involved to some level with RAC auditing but often is not involved in any way with business office denials. A matrix that allows a facility to track all three areas is one where the true loss in the audit venue can be truly appreciated. For even small hospitals the combination of these three areas of loss can be a very large number. It make sense to some degree that the separation of these three areas has occurred in the way that it has because all three require quite a different approach, but consolidation is you key to stopping the loss and in our next article will explore some of the ways in which stopping loss can occur.

Medlinks cost containment Inc. is a California based healthcare auditing firm which focuses on medical audit denials, healthcare auditing policy, medical audit losses, hospital auditing, nurse auditing, and cost containment.

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