Successfully reported this slideshow.
We use your LinkedIn profile and activity data to personalize ads and to show you more relevant ads. You can change your ad preferences anytime.

Confessions of an Internal Auditor 2014 Florida HMFA Fall Institute

915 views

Published on

Operations traditionally views Internal Audit as a necessary evil that hopefully doesn’t show up during budget season. With constant budget cuts and reduced reimbursement, Internal Audit can help improve both financial and operational outcomes with in-depth revenue cycle and hospital/clinic operations reviews at no cost to the department.

Published in: Healthcare
  • Be the first to comment

  • Be the first to like this

Confessions of an Internal Auditor 2014 Florida HMFA Fall Institute

  1. 1. TODAY’S OBJECTIVES • Identify strategies to engage Internal Audit and focus their efforts on bottom-line outcomes and departmental priorities. • Explore audit methodologies designed specifically for the revenue cycle and hospital/clinic operations. • Review common findings related to the revenue cycle and patient care operations. • Describe strategies to respond to internal audit reports.
  2. 2. ABOUT VANDERBILT UNIVERSITY MEDICAL CENTER • $2.3 Billion Annual Healthcare Operating Expenses (excludes academics and research) • $471.6 Million Annual Sponsored Research Budget • $843.6 Million Annual • Charity Care, Community Benefits, and other Unrecovered Costs
  3. 3. UNDERSTANDING AUDITORS
  4. 4. THE CLAW HAS SPOKEN
  5. 5. PREVIOUSLY CHOSEN Bad Debt & Charity Care Write-offs Data Center Security Preoperative Services: Implants & Supplies Blood Bank Electronic Claim & Payment Processing POS Collections & Deposit Process Center for Women’s Imaging User Account Security Reference Lab Chemotherapy Pharmacy & Infusion Clinics Otolaryngology Administration Respiratory Care Meaningful Use Pediatrics Sponsored Research Software Change Management Controlled Substances Retail Pharmacy Physician Practice Acquisitions
  6. 6. PRELIMINARY PLANNING • Auditors are trying to: • Gain a high-level understanding of operations. • Establish relationships. • Identify key personnel and systems. • Determine audit scope.
  7. 7. PRELIMINARY PLANNING • Client departments need to: • Provide prompt responses. • Explain operational strengths and weaknesses. • Share current trends and industry issues. • Clearly communicate management’s audit goals.
  8. 8. WHAT TO EXPECT AT THE ENTRANCE CONFERENCE • Meet all audit team members. • Review audit objectives and scope. • Discuss audit progress/ timeline. • Send out scope memo.
  9. 9. PROCESS DOCUMENTATION FRONT-END • Orders/Referrals • Registration/ Pre-authorization • Check-in/ POS Collections • Medical Records • Charge Capture • Denial Follow-up BACK-END • Charge Interfaces • Claim Edits • Claim Submission • Payment Processing • Denial Management • Account Follow-up • Patient Collections
  10. 10. CHARGE CAPTURE • Compare arrived appointments/schedule or orders to posted charges. • Look for charges that should always be together (e.g., chemo drugs & infusion). • Data entry controls (e.g., batch totals). • Compare medical record to posted charges. • Identify issues with the charge interface by comparing original charges to posted charges.
  11. 11. CHEMOTHERAPY INFUSION CPT Description Billed Minimum Correct 96409 Push, first drug 0 1 0 96143 Infusion, first drug 1 0 1 96411 Push, additional drug 0 2 1 96417 Infusion, additional drug 0 0 1 96415 Infusion, additional hour 0 0 2 HCPCS Description J9070 Cyclophosphamide, 100 mg J9000 Injection, doxorubicin hydrochloride, 10 mg J9370 Vincristine sulfate, 1 mg J7510 Prednisolone oral, per 5 mg
  12. 12. CLAIMS & PAYMENTS • Compare original charges (codes, quantity, and dollars) to final claim submission. • Discuss problem payers with Contracting, Informatics, and Business Office. • Compare contracted payments to actual payments. • Look for no charge services or write-offs before claims are submitted. • Review co-pay collection rates.
  13. 13. DENIALS REVIEW DENIALS BY • Category (e.g., registration, coding, business office, and authorization) • Payor • Clinic/Service • CPT/HCPCS Code • Date of Service • Provider ASK ABOUT • What denial reports are provided to management? • Any recent changes to contracts or payor procedures? • Any staffing changes, leaves, or issues? • Changes to coding regulations.
  14. 14. DENIALS BY PATIENT ADDRESS
  15. 15. FINANCIAL REPORTING QUESTIONS TO ASK • What are the data sources? • Who prepares the reports? • How often are they updated & distributed? • What benchmarks are used & what are the sources? TESTS TO PERFORM • Reconcile reports to source systems and re-perform calculations. • Review methodology for any estimates, allowances, or allocations. • Review variances and trends with similar or related departments or services.
  16. 16. AUDIT REPORTS & COMMON FINDINGS
  17. 17. EXECUTIVE SUMMARY WHAT TO EXPECT • Summary of two to four key issues and recommendations. • Background about the area audited including an overview of unique process and/or information systems. • Key financial metrics and/or key performance indicators to support highlighted issues. WHAT TO DO • Scrutinize the wording, this is negotiable. • Review the background, some of this may not have been explicitly discussed during the audit and could contain errors or assumptions. • Recalculate/reconcile financial metrics and KPIs.
  18. 18. AUDIT OBJECTS & ASSESSMENT Audit Objectives Assessment 1 Determine that charge capture is complete and accurate. 2 Payroll transactions are appropriate, properly supported, and approved. 3 Equipment is properly maintained and monitored by Clinical Engineering. Effective Needs Improvement Ineffective
  19. 19. RECOMMENDATIONS • Grouped by topic or function. • Include a benefit and basis. • Specify the area/department responsible for implementation the corrective action. • Allow space for management’s action plan with target implementation date.
  20. 20. COMMON ISSUES: FRONT-END • Cash Controls • Inaccurate Pricing Calculation (Implants, • Co-Pay Collections Pharmaceuticals) • Upfront Collections for • Equipment Self-Pay Services • Asset Tags • Missing Charges • Preventative • Security of PHI Maintenance
  21. 21. COMMON ISSUES: BACK-END • Segregation of Duties • Invoice Accuracy • Transaction Review • Use of Procurement Cards • Overtime Approval • BAA Agreements • Authorized Vendors • Inventory Management • Executed Contracts
  22. 22. COMMON ISSUES: IT • Storage of PHI on unsecured media • CD/DVD with Medical Images • Department File Servers, Local PCs, Laptops, etc. • Inadequate Password Policy/Enforcement • Unsecured/Sharing of Clinic Workstations • Disaster Recovery • Documented Downtime Procedures • Oversight/Security of Portable Devices (e.g., iPads)
  23. 23. FOLLOW-UP REVIEWS • Depends on the Severity of Findings • Often Requested by Senior Management • 12 to 18 Months After Report is Issued • Limited to Items in Audit Report • Significantly Reduced Time Compared to Original Audit
  24. 24. QUESTIONS

×