Internal Audit: Leading Revenue Cycle Improvements … · Internal Audit: Leading Revenue Cycle Improvements and Providing Value Thomas Boyle, CIA, CISA, CFE, CCP, MBA, District Audit

Internal Audit: Leading Revenue Internal Audit: Leading Revenue Cycle Improvements and Cycle Improvements and Cycle Improvements and Cycle Improvements and

Providing ValueProviding ValueThomas Boyle, CIA, CISA, CFE, CCP, MBA, District Audit OfficerLidiya TerMarkarova, Director of Coding/Clinical Documentation/CDMPalomar Pomerado Health District

2011 AHIA Annual Conference www.ahia.org

AgendaAgendaAgendaAgenda

1. A little about PPH and the Audit Deptp2. Integrating Continuous Monitoring into

the Audit Philosophy3. The ROC Formation4. Secrets of Success

h h k5. The Future is What We Make Happen

2011 AHIA Annual Conference -www.ahia.org

1. Palomar Pomerado Health DistrictHealth District


PMC WestEscondido Surgery Center

Arch PartnersVilla Pomerado

Internal Audit Audit

Department Universe

Palomar Medical Center

Pomerado Hospital PCCC



Palomar Pomerado Health is California’s largest

healthcare district, serving communities of Inland

North San Diego County.


North San Diego County.




“One of the Top 100 Best “One of the Top 100 Best Places to Work inPlaces to Work inPlaces to Work in Places to Work in

Healthcare by Healthcare by Modern Healthcare”Modern Healthcare”




Arch PartnersVilla Pomerado“One of California’s

Best Places to Work by the Employers

Group”Palomar Medical Center

Group


Building theHealthcare Center of the FutureHealthcare Center of the Future

INTERNAL AUDIT DEPARTMENTDistrict

A

nior

Audit

Inf

Senior

Int

Constructi

ConstructiAudit

Officer

fo

Tech

Specia

ernal

Auditor

ion

Auditor

ion

Auditor

alist

Administrative Assistant


TYPES OF AUDITSContinuous

I f ti Controls Monitoring

15%

Fraud

Information Technology

6%

Clinical2%

16%

Operational22%

Fi i l A dit I d d t I f ti S t (IS) A ditO ti l A dit P li i d

Compliance13%

Financial26%

Financial Audits: Independent evaluation performed for the purpose of attesting to the fairness, accuracy, and reliability of financial data.

Information Systems (IS) Audit:Reviewing a data center, an operating system, a security software tool, or processes and procedures (such as the procedure for controlling production program changes).

Clinical Audit: A quality improvement Compliance Audit: Is a Fraud Audit:

Operational Audit: Policies and achievements related to organizational objectives. Internal controls and efficiencies may be evaluated during this type of review.

Continuous Control Monitoring( q y pprocess that seeks to improve patient care and outcomes through systematic review of care against explicit criteria and the implementation of change.

Compliance Audit: Is a comprehensive review of an organization's adherence to regulatory guidelines

Fraud Audit: preventive measure to reduce business risk.

Continuous Control Monitoring( CCM): Is the process and technology used to detect compliance and risk issues associated with an organizations financial and operational environment.

AUDIT RESOURCE ALLOCATIONSpecial Projects and Requests

7%PTO7%

Administrative tasks13%

Professional Available Project H Development

2%

Meetings8%

Hours63%

%

Administrative Tasks: Tasks include Internet web-page

Professional Development:Includes future certifications and

Available Project Hours: Include all the audits planned f h l

Tasks include Internet web page and Intranet updates and preparing for the Audit Committee meetings

Includes future certifications and training possibilities. Seminars, webinars, local meeting and workshops.

Special Projects & Requests:Special assignments or Meetings:

PPH Ed i / i / PTO V ti h lid / i k

for the current year plus Reviews/Follow ups (Report Follow ups) and the audit not completed last year due to time.

investigations brought to Internal Audit from an internal department.

PPH Education/meetings/events, Departmental Meetings/Training.

PTO: Vacation holiday/sick days taken into account for projects.

Advance notice is provided to key stakeholders who may include Department Directors and their Executive Management Team

STEPS TO PERFORM AN AUDITNotification Advance notice is provided to key stakeholders who may include Department Directors and their Executive Management Team

(“EMT”) sponsor, vendors, or PPH affiliates. This is typically in the form of an “Engagement Letter” for formal audits. In situations, where fraud or illegal activities are suspected, some projects may have little or no notice.

Planning For new projects, this phase includes gathering preliminary background information, developing audit approach and developing audit programs. For ongoing activities, such as long-term construction activities, planning has been established globally but specific review or adjustment of audit scope may be warranted to reflect the particular uniqueness or relevance to the auditee or trade.

Entrance MeetingAn entrance conference is usually held to discuss the purpose, procedures, goals, schedule, scope, timing of the audit and any issues that management may have related to the audit. This dialogue may be conducted along with the presentation of the engagement letter. Attendees will include the relevant stakeholders, which may be vendor representatives: EMT executive or designee, department director, department manager and key personnel as appropriate.

Access to Information

The auditors may request documentation from auditee management prior to beginning or during fieldwork. Such items include: organizational charts, contact information, financial records, transaction files, access to data, policy and procedures, contracts, etc.Information organizational charts, contact information, financial records, transaction files, access to data, policy and procedures, contracts, etc.

Fieldwork This phase is what is typically thought of as the audit work. During this phase, the auditor(s) may perform work both on and off site

Communicating IAS discusses all observations with the auditee management before fieldwork is completed. Auditees are given draft findings to review CommunicatingResults

g p g gbefore the formal audit report is issued.

Draft Report After completing fieldwork and validating findings and observations with auditee management, the auditors will develop a draft report.

Final Draft After the exit conference the final draft is issued to management. We typically request that management write responses to recommendations made in the report. Management is typically given two weeks to submit written responses to audit findings and recommendations.

Exit MeetingClosing conferences are held for each audit engagement to clarify and validate findings and resolve any concerns the auditees may have about the audit report. Comments regarding the audit and observations noted in the draft report will be discussed at this meeting. Attendees are typically those who also attended the entrance conference.

Final Report IssuedA final report, including management responses, is presented to the management of the areas, along with other appropriate stakeholders or EMT members, and to the Audit and Compliance Committee.


2. Integrating Continuous Monitoring into Internal Monitoring into Internal

Auditing


BENEFITS OF AUDIT AUTOMATION

•Reduced audit staff time, costs,

•Increased ability to mitigate risk

I d fid i fi i l lt•Increased confidence in financial results

•Reduce financial errors - potential for fraud

•Eliminate recurring control assessments

S t i bl i t t d t l t •Sustainable, integrated control system



Proactive – Not Reactive Approach(Continued)

◦ Identify, quantify, remediate

Cost Savings◦ Automate manual tasks

◦ Reduce waste, misuse, fraud

C f dManagement Confidence◦ Assurance that controls are working

Regulatory Compliance◦ Demonstrable and auditable



Allows auditors to:

(Continued)

Build customized analytics to test key controlsRun tests automatically on a regular Run tests automatically on a regular basisIdentify and quantify exceptions and Identify and quantify exceptions and anomaliesEmbed best-practice control rules and pparametersProvide easy, secure access



Allows auditors to:

(Continued)

• Efficiently investigate abnormal results and suspicious transactionand suspicious transaction

• Trend and analyze historical resultsT ansfe kno ledge of a diting • Transfer knowledge of auditing, monitoring to management/staff

• Create a positive organizational culture • Create a positive organizational culture change


Examples of ACL Applications in Place

Clinical Utili ti

Lab &R d

Case Management

Complex Cases

Daily Unit Discharges

Medicare INPs & OBS

Utilization Rad

Compliance Excluded Providers

Finance Discount Pricing

Price Differences

Duplicate Invoices

Department Expenditures

Unclaimed Refunds

Managed Care

Contract Care Performance

Internal Audit

InformationSecurity

Process Automation

AXAdmin

Audit Analysis

ProcessAdmin

PFS PFSDashboard

ilPerformanceExcellence

DailyCensus


EBCDC

Efficient Data AccessODBC

ACL Configuration at PPH

CERNERLAWSON DATA

DATA

DATA EBCDC ASCIIPDFPrint ImageFlat Files

ODBCDBFCSVExcelAccess

AVEGA

Auditors & Dept

DelimitedInformatica ETL

Data Definitions

Standard Tests

Analytical Results

Auditors & Dept Specialists

Establishes data access protocolsC /d bAnalytical Results Creates/distributes standard testsEnsures data integrity

Analytical Results

Department Managersand other users

Up-to-date results

Automated Data AcquisitionReview/Monitor test resultsPerform Ad Hoc Analysis

p

Customize needs


3. The ROC Formation

“Revenue Optimization Committee” Revenue Optimization Committee at

Palomar Pomerado Health


Revenue Optimization CommitteeRevenue Optimization CommitteeF d l i di i li ROC 1. Formed a multi-disciplinary ROC

Medical Staff

Case Management

Medical Staff

Patient Financial Srvs

CodingInternal Audit

Nursing

Revenue Cycle Quality Review

C M tNursing

Managed CarePatient Access

Case Management


Revenue CycleTim

Assistant

Revenue Cycle AnalyticMelissa(Sandy)

AssistantLeondra

Case Mgmt/UMCrystal(TBD)

HIMKim

(TBD)

( y)

ReimbursementLyn

(TBD)

ITPrudence

(TBD)

NursingJoy

(TBD)

CodingLidiya

(Dawn)

PMC Patient AccessCaroline(Gloria)

RACMarv

(Melissa)

Managed CareMargie

(Michelle)

Patient Financial ServicesTraci

(Cindy)

POM Patient AccessGloria

(Caroline)

Charge Capture(Gil)

Billing(TBD)

Underpayment Mgmt(Michelle)

Chart Audit(Terry)

Clinical Documentation(Marv)

Collection(Cindy)

Financial Clearance(Maria)

Charge Master(Lorraine)

Denial Mgmt(TBD)

Note: () denotes secondary responsibility

Billing WIP Total7/1/2011 7/8/2011 7/15/2011 7/22/2011 7/29/2011 8/5/2011 8/12/2011 Goal

REVENUE CYCLE DASHBOARD

Billing/Collections

Holds Number of Accounts

Access and Dollar Volume

Document Validation for each category

DenialsDenials

Defense Audits

Capitatedp

Follow Up WIP Total

DNFB TotalAging Total

In House0-3031-6061-9091+

Volume

Credits









$250,000.00

$100,000.00

$150,000.00

$200,000.00

PMS

AMCOL

$-

$50,000.00

Feb-11 Mar-11 Apr-11 May-11 Jun-11 Jul-11


REVENUE CYCLE DASHBOARDREVENUE CYCLE DASHBOARD


If at first you don’t succeed…If at first you don t succeed…

Prior attempt to improve revenue cyclePrior attempt to improve revenue cycle

Consultants, Consultants, Consultants

Meetings, Meetings, Meetings

Creation of Revenue Cycle DepartmentCreation of Revenue Cycle Department

Hiring of Staff

Establishing Protocols

Creating and marketing a Brandg g2011 AHIA Annual Conference www.ahia.org

PROVEN SECRETS TO SUCCESSPROVEN SECRETS TO SUCCESS

ROC Core MembershipROC Core Membership

◦ Patient Access,

◦ Charge Services,

◦ Coding Services, Coding Services,

◦ Case Management,

P ti t Fi i l S i◦ Patient Financial Services



ROC Ad Hoc ParticipationROC Ad-Hoc Participation

◦ Internal Audit

◦ IT

◦ Physician AdvisorsPhysician Advisors

◦ Nursing

Q lit◦ Quality

◦ Ancillary Departments



Effective Leadership and AuthorityEffective Leadership and Authority

◦ Regular Weekly Meetings

◦ Be there or send a competent designee

◦ Maintain law and orderMaintain law and order

◦ Challenge Processes (not people)

Meaningful Action ItemsMeaningful Action Items◦ Set agenda items◦ Establish UrgencyEstablish Urgency



Maintain “HIGH PRIORITY”Maintain HIGH PRIORITY

Sustain Success

Continued Visibility

Support from Executive Team and

B dBoard



Absolute Accountability◦ “NO EXCUSES”◦ “NO POINTING BLAME”“NO DELAYS”◦ “NO DELAYS”

Everyone is part of the same team◦ Don’t let each other down◦ Don t let each other down◦ Help each other achieve success◦ Work collaboratively without “Silos” ◦ Welcome criticism and new ideas

Sustain Success2011 AHIA Annual Conference www.ahia.org

Objectives Accomplishedj p

Eliminated Coding Backlog

Improved Clinical DocumentationImproved Clinical Documentation◦ Increase Reimbursements

Minimize Denials◦ Minimize Denials

Improved clean claims more than 100%

Increased Cash Collections $3.5M over goal!◦ Despite a bad economy

Net Operating Income increased by almost $20M

in 2 years2011 AHIA Annual Conference www.ahia.org

Objectives AccomplishedObjectives Accomplished

Billing Edits Reduced by two-thirds

Review Medicare one-day stays

◦ From 0% to 100%

Story to follow

◦ ACL report identifies accounts daily

Created Ambulatory Surgery Charge Ticket =$1My g y g $

“No Authorization” on date of service eliminated


VHA Award - Beverly Hillsnovation in Revenue Cycle Improvemen

2011 AHIA Annual Conference -www.ahia.org

Revenue Cycle TasksRevenue Cycle Tasks

Revenue Cycle Dashboard


Revenue Cycle Dashboard◦ Dashboard for monitoring key operational data by populating fields with values extracted from various billing systems: g y

Aged Trial Balance, Accounts Receivable statistics, Emergency Department Level charges and Denials data

Charge Capture Validation◦ ACL on ad hoc basis to analyze accounts and identify areas with potential charge identify areas with potential charge discrepancies.


Revenue Cycle TasksRevenue Cycle TasksMedicare Admissions Vs. Observations

Analysis identifies patients for case management f

Example


y p greview with the potential for compliance issues or misclassification.

Conversion of legacy Print Image reports Conversion of legacy Print-Image reports Data converted to allow analysis and interaction with data on recurring basis by auditors and system-wide analysts. Results in a level of detail y ynot otherwise available for critical processes.

Late Charge Analysis A t ti f ti t k ith ACL i t t Automation of routine task with ACL scripts to effectively monitor the timeliness of charge-capture processes and clearly identifies sources of problems. Saves hours of staff time and minimizes


problems. Saves hours of staff time and minimizes risk of manual errors.

Medicare Admissions Vs. ObservationsMedicare Admissions Vs. ObservationsEducate members:◦ Obtain information from CMS, HFMA, VHA, AHA,

ConsultantsConsultants


Medicare Admissions Vs. ObservationsMedicare Admissions Vs. ObservationsReported Medicare Payment Errors

62 %

18 %18 %

14 %

1 %

12 %

Medicare Admissions Vs. Observations

Scheduling/ Preregistration Emergency

Evaluate Current Processes Preregistration

InsuranceVerification

EmergencyAdmissions

AdmissionRegistration

Bed Assignment

ServicesProvided

ChargeCaptureCapture

Discharge

“Medically Unnecessary Setting”“Medically Unnecessary Setting”Medically Unnecessary SettingMedically Unnecessary Setting

Admission Admission or Observation Patient?or Observation Patient?Admission Admission or Observation Patient?or Observation Patient?The ACL script extracts vital data from our

ti t ti t f d i i hi h patient accounting system for admissions which occurred the past 24 hours.

The daily report contains allMedicare admissions with Medicare admissions with the reason for admission (chief complaint)


(chief complaint).

“Medically Unnecessary Setting”“Medically Unnecessary Setting”Admitted or Observation Patient?Admitted or Observation Patient?Admitted or Observation Patient?Admitted or Observation Patient?


Admission or Observation Patient?Admission or Observation Patient?The ACL script runs automatically at 7:15 AM and sends an email to Case Management and and sends an email to Case Management and bed assignment staff so they can audit the validity of inpatient statusvalidity of inpatient status.



Admission or Observation Patient?Admission or Observation Patient?RESULTS:

Timely notificationEfficient use of resourcesEfficient use of resourcesAny discrepancies are correctedCompliance errors are minimizedCompliance errors are minimized


Other ACL Healthcare ApplicationsOther ACL Healthcare ApplicationsOther ACL Healthcare ApplicationsOther ACL Healthcare Applications

Contractual Allowances and Zero Balance AccountsPerforms summary analysis on Zero Balance Accounts and Bad Debt Write-Offs on monthly basisDebt Write-Offs on monthly basis.


Other ACL Healthcare ApplicationsOther ACL Healthcare Applications

OIG LEIE Excluded Provider Test

Other ACL Healthcare ApplicationsOther ACL Healthcare Applications

OIG LEIE Excluded Provider TestAutomated process developed to meet a CMS compliance requirement - replaced less-effective, manually intensive process Employee, physician and vendor master files are harmonized p y , p ymonthly and compared with list of excluded providers and entities

Added BenefitWrote ACL script to create and distribute (via email) current list of physicians to patient billing staff who use it for reference and confirmation.



Documents

Internal Audit: Leading Revenue Cycle Improvements … · Internal Audit: Leading Revenue Cycle Improvements and Providing Value Thomas Boyle, CIA, CISA, CFE, CCP, MBA, District Audit