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Charge Capture Auditing …. How to Uncover Revenue Leakage

Charge Capture Auditing …. How to Uncover Revenue Leakage. Bridget Johnson, CIA, CCSA, Audit Supervisor Joanne Ouellet, CPA, CIA, Audit Senior The Methodist Hospital System. About Us: The Methodist Hospital System Overview. No. of Hospitals – 4 Total Net Patient Revenue - $1.2B

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Charge Capture Auditing …. How to Uncover Revenue Leakage

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  1. Charge Capture Auditing …. How to Uncover Revenue Leakage Bridget Johnson, CIA, CCSA, Audit Supervisor Joanne Ouellet, CPA, CIA, Audit Senior The Methodist Hospital System

  2. About Us:The Methodist Hospital System Overview No. of Hospitals – 4 Total Net Patient Revenue - $1.2B Employees – 12,153 Affiliated Physicians – 3,159 Licensed Beds – 1,464 Volumes: Inpatient Admits: 68,212 Outpatient Visits: 498,823 International Patients: 6,500 Primary Academic Affiliations: Weill Cornell Medical College & NY Presbyterian Hospital 2

  3. Who We Are:TMHS Internal Audit Department Team Profile - 9 team members • VP, Business Practices Officer & Chief Audit Officer • Director, Internal Audit • Audit Supervisor • 4 Senior Internal Auditors • 2 Senior IT Auditors • Experienced: 6 - 20 years • Credentialed: 21 designations • CIA, CISA, CCSA, CHC, CISSP, CHFP, CPA, MBA • Recognized: IIA’s Recognition of Commitment Award

  4. Objectives of Session Identify Charge Capture Risks in Selected Clinical Areas from Point of Service to Bill Design Tests to Discover Lost Reimbursement Opportunities Quantify Potential Reimbursement Impact

  5. Consider…. A review of data from more than 100 hospitals, which encompassed more than 30,000 complete medical records and comprehensive billing and collection records showed that, on average, the organizations were losing 1 percent of revenue to errors in the charge master or charge capture. Hospitals typically are not aware of the degree to which they may be missing charges. Appropriate charge capture is not only important for capturing revenue but also for tracking use of resources.

  6. Finding the Leaks So how do you uncover the leaks? Where should you look? 6

  7. Where to look… Start with clinical areas that should generate large amounts of revenue such as: Emergency Department Cardiac Cath Labs Pharmacy Focus on the reimbursement that matters: Commercial Payers : % of Charge Reimbursement Carve-outs : Implants, High Cost Drugs (HCDs) 7

  8. Next Steps . . . Understand charge capture process in clinical areas. Specifically… How charges are captured (i.e., manually or electronically) Charge Monitoring (i.e., reconciliations, daily volumes, etc.) 8

  9. Using CAATs to Uncover Leaks Develop tests to uncover lost reimbursement. Risks to consider when designing tests are: Lost charges (i.e. Implants, ER level charges, etc.) Incorrect assignment of revenue codes Missing modifiers Late charges Incomplete or no reconciliation process 9

  10. How to Uncover Leaks in Emergency Department Purpose of Test: To identify missing ER charges. Specifically, - ER level visits - Missing injection/infusion charges 10

  11. How to Uncover Leaks in Emergency Department Required Info to Perform Test(s): ER charge data for all patients including the following fields: - Account Number - Date of Service - Insurance Plan Code - Charge Amount - CDM Number - Patient Type - CDM Description - CPT Code - Modifier - Admit Source Code 11

  12. How to Uncover Leaks in ED – Missing ER Levels Procedure Steps: 1. Summarize on account number to obtain a Master File of ER patients 2. Using the ER Charges File, Extract Level Visits using CPT Code(s) = 99281 - 99285 99291 12

  13. How to Uncover Leaks in Emergency Department 13

  14. How to Uncover Leaks in ED – Missing ER Levels Procedure Steps (cont.) 3. Relate the ER patient file and ER charges file on account number 4. Add the account number field from ER Charge file to the ER Patient file (Hint: Change the name of the second account number field to avoid confusion.) 5. All instances of blanks in the “second” account number field may indicate instances where an ER level visit was not charged 6. Select a small sample and review medical records with your ED Charge Coordinator 14

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  16. How to Uncover Leaks in ED – Infusion/Injection Charges Procedure Steps: 1. Identify patient’s who were given non-self-administered drug; by RevCode = 0250 and HCPCS code = “J” 2. Using the ER Charges file, identify patients who had an infusion or injection charge using the following ACL command: ER EXTRACT RECORD IF MATCH = (CPT,'90772','90774','90775','90765','90766','90767','90768') TO "ER_Drug Inj-Inf Procedures" OPEN 16

  17. How to Uncover Leaks in ED – Infusion/Injection Charges Procedure Steps (cont.) 3. Summarize on account number in each file to obtain a summary file of accounts with drug charges and a separate summary file of infusion/ injection charges 4. Relate the Drug Summary File to the Infusion/Injection file on account number 17

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  19. How to Uncover Leaks in ED – Infusion/Injection Charges Procedure Steps (cont.) 5. Add the account number field from Infusion Charges Summary File to the Drug Charges Summary File 6. All instances of blanks in the “second” account number field may indicate instances where an injection/infusion charge was missed 7. Select a small sample and review medical records with your ED Charge Coordinator 19

  20. Emergency Department – Results & Next Steps 20 • Results: • ER level charges – Identified accounts that were missing ER level visit charges and accounts that had multiple ER level visit charges. • Infusion and Injection charges – Identified inconsistent charging practice for infusion/injection of non-self administered drugs. • Next Steps: • Apply charges for missed ER level visit and infusion/injections charges to quantify impact. • Discuss with billing department whether the results warrant re-billing accounts.

  21. How to Uncover Leaks in Cardiac Cath Lab Purpose of Test: To identify missing implant charges Required Info to Perform Test(s): Charge data for Cath Lab patients including the following fields: - Account Number - Date of Service - Insurance Plan Code - Charge Amount - CDM Number - Patient Type - CDM Description - CPT Code - Modifier - UB Revenue Code 21

  22. How to Uncover Leaks in Cardiac Cath Lab Procedure Steps: Identify your top 5 most costly implants. Identify the CDM numbers associated with the procedures that correspond to those implants. Obtain CPT codes for the procedures that correspond to those implants. 22

  23. How to Uncover Leaks in Cardiac Cath Lab Procedure Steps (cont.) 4. Extract charges that match the implant procedure CDM numbers: Cath_Lab_Charges SET FILTER MATCH (ChgCode,'00254607','00329086','00385153', '00376079','00387969','00388918') 5. Summarize the resulting file by account number to obtain a master file of patients that had Cath Lab implant procedures performed 23

  24. How to Uncover Leaks in Cardiac Cath Lab Procedure Steps (cont.) 6. Extract all charges with a revenue code of 0275 or 0278 and a charge amount greater than $1500 from the original Cath Lab charges file. 7. Relate the Cath Lab Procedure Patients file to the Cath Lab Implants file on account number. 24

  25. How to Uncover Leaks in Cardiac Cath Lab Procedure Steps (cont.) 8. Add the account number field from Cath Lab Implant Charges file to the Cath Lab Procedure Patients file 9. All instances of blanks in the “second” account number field may indicate instances where an implant charge was missed 10. Select a small sample and review medical records with your Cath Lab department 25

  26. How to Uncover Leaks in Cardiac Cath Lab 26 To Quantify the Dollar Impact: 1. Extract accounts with missing implant charges that are Managed Care Plan accounts eligible for carve out payments. 2. Apply the CDM prices and carve out rates to each account based on CDM number and Insurance Plan Code. 3. Calculate a potential dollar impact and discuss with billing to determine whether re-billing should occur.

  27. How to Uncover Leaks in Pharmacy Purpose of Test: To identify high cost drugs (HCDs) not billed using the high cost drug revenue code (e.g. 259) Pyxis Med Station 27

  28. How to Uncover Leaks in Pharmacy Required Info to Perform Test(s): Pharmacy charge data for all patients including the following fields: - Account Number - Date of Service - Insurance Plan Code - Charge Amount - CDM Number - Patient Type - CDM Description - Quantity - Rev Code - Modifier 28

  29. How to Uncover Leaks in Pharmacy Additional Files Needed to Perform Tests: Pharmacy CDM that includes all of your Pharmacy CDM numbers that are assigned the high cost drug revenue code (i.e., “0259” for your Managed Care accounts) List of Insurance Plan Codes from your Managed Care department that includes High Cost Drug definitions (i.e., daily charge > $250) and carve out payment percentages 29

  30. How to Uncover Leaks in Pharmacy Procedure Steps: 1. Limit your Pharmacy Charge data to those charges whose CDM number is not already associated with a HCD revenue code 2. Summarize the extracted file on account number, CDM number and date of service and Totaling the Charge Amount field 3. Summarize again on CDM number, summing the Charge Amount field “IF” charge amount field does not equal zero 30

  31. How to Uncover Leaks in Pharmacy Procedure Steps (cont.): Calculate an average daily charge by dividing the charge amount field by the count field. Average Daily Charge = Total Charge Amount Count 31

  32. How to Uncover Leaks in Pharmacy 32

  33. How to Uncover Leaks in Pharmacy Procedure Steps (cont.): Using your most recent file, extract the charges whose CDM numbers have an average daily charge greater than your facilities threshold (i.e. $250) This is the file of pharmacy items that should be reviewed for HCDs – consider multi-dose vials and ointments. 33

  34. How to Uncover Leaks in Pharmacy To Quantify the Dollar Impact: 1. Relate the newly created HCD CDM file with your original Pharmacy Charges file to identify those patient accounts with HCD drug charges. 2. Relate the HCD Charges file to the Insurance Plan Code file and extract only those Managed Care Plan charges that are eligible for carve out payments. 34

  35. How to Uncover Leaks in Pharmacy To Quantify the Dollar Impact (cont.): 3. Calculate a lost reimbursement using the carve out percentage charge 4. Discuss the need to re-bill and recover lost revenue with the Billing Department 35

  36. Questions 36

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