Presentation outline

1. . Victorian Statewide Audit Program: Methodology, Results and Significance for Activity Based Funding Jennie Shepheard Victorian Department of Health

2. Presentation outline • Background to the Victorian audit program • Development of the program • Key principles • Methodology • Results • Lessons learnt and reinforced • Implications for HIM profession in an activity based environment • Other data audits

3. Background to coding audits in Victoria Casemix Funding Model for acute inpatient care • Introduced in 1993 • Replaced ‘historic budgets’ funding model • Casemix funding = a method of allocating funds • Provides equity, transparency and accountability • Financial risk is shared between the purchaser and the provider (the Department and the hospital) • Funds are allocated on the basis of: • An agreed service at an agreed price

4. Background cont… Auditor General: • Requires that the casemix system is audited • Accountability • Transparency Objectives of the audit program • Assess the validity of casemix based payments to Victorian public hospitals • Assess the application of the Department’s admission policy • Support improvements in the accuracy of admitted patient data reporting.

5. Development of the program: name change • Originally known as coding audits • Later changed to ‘patient admitted episode audits’ Patient Admitted Episode Audits • DRGs use items other than clinical codes • Admission weight • LOS etc • Reflects complexity of the casemix system that uses; • DRGs • Copayments • Outlier payments

6. Methodology • Pre-audit survey • Random Selection • Hospital and cases for audit • Blind recoding • Discussion between auditor and hospital representative/clinical coder • Dispute resolution • Management debrief • Re-audit plan

7. Methodology cont … • Ensure auditor capability • Electronic data collection method • Reports for each hospital • Details of all changes to data items (incl DRG and WIES) • Details of all codes assigned by both hospital and auditor • Recommendations • Statewide report • Quantitative results • Confidence intervals • Qualitative results • Recommendations

8. Principles of audits • Ethical conduct (professionalism) • Fair presentation (report truthfully and accurately) • Due professional care (diligent; good judgement) • Independence (impartiality) • Evidence based approach (rational method; reproducible) International Standard ISO 19011:2002 Guidelines for quality and/or environmental management systems auditing

9. Audit results 1993/94 – 1998/99 • DRG changes ranged from 13.50% to 11.70% • WIES changes ranged from 1.80% 0.80% 1999/2000 – 2008/09 • DRG changes ranged from 10.20% to 8.43% • WIES changes ranged from 0.94% to -1.23%

10. Secondary outcomes • Information about code assignment • Development of coding standards • Development of DRGs • Education requirements • Infrastructure issues • Workforce • IT systems • Management of coding services

11. Lessons learnt: Auditors Auditor skill paramount • It is not enough to be a good coder • Must also be a good auditor All the auditing principles apply to auditors. • Ethical conduct • Fair presentation • Due professional care • Independence • Evidence based approach

12. Lessons learnt: Clinical Coders • Clinical Coders need a voice • Must not feel intimidated • Must have confidence in their work • Must be able to articulate their understanding of standards etc • Must be willing to ask questions • Must be willing to learn • Must be willing to change

13. Lessons learnt: Department of Health • Audits are very expensive • Hospitals not all the same • Support for auditors and for clinical coders • Department management of the audit process

14. Lessons learnt: Hospitals • Audits are part of business as usual • Need to accommodate them in staffing arrangements • Need internal audit programs to manage the risk • Need to engage strategically with recommendations

15. National Reforms • Activity Based Funding • Will require audit program • This will be problematic • Workforce issues will impact • Need to look at smart ways to audit • Consider desktop analysis and targeted audits • Consider expanding the use of PICQ and similar products • Consider compulsory internal auditing and reporting

16. Expansion of auditing program • Elective Surgery • Emergency Department • Spot audits

17. Conclusion • Audits are: • An integral part of the management of high quality coded data • Demand a highly skilled workforce • Are highly resource intensive • Essential to an activity based funding model • Serve to create high quality data