Providers today are facing a record number of audits, denials, and payer revenue recoupments, which not only affect an organization’s bottom line but create costly administrative burdens as well. This increase can be attributed to the growing number of private insurers now conducting their own audits after observing the success of government auditors. While providers might feel that facing regulatory and commercial audits is insurmountable, the right audit management processes can help providers conquer audits and maintain control during uncertain times.
With recent changes in the audit landscape, The SSI Group, a leading audit management solution provider, has observed a significant increase in the volume and complexity of audits facing healthcare organizations today. While government audits are a constant battle, there has recently been an uptick in commercial audits, with SSI clients reporting an astounding 64 percent increase in just one year. Though providers are familiar with the requirements of regulatory audits, it is challenging to identify what private payers require, in terms of documentation, to substantiate a claim.
Further challenging is the fact that each payer has its own internal set of rules and decision-making criteria; what may have been sufficient for Centers for Medicare and Medicaid Services (CMS) may not necessarily work for commercial payers such as Aetna, United Healthcare, or a regional health plan – just to name a few. Moreover, the onset of ICD-10 coding and change to reimbursement structures for public and private payers has added complexity to the audit landscape.
Providers today are facing a record number of audits, denials, and payer revenue recoupments, which not only affect an organization’s bottom line but create costly administrative burdens as well. This increase can be attributed to the growing number of private insurers now conducting their own audits after observing the success of government auditors. While providers might feel that facing regulatory and commercial audits is insurmountable, the right audit management processes can help providers conquer audits and maintain control during uncertain times.
With recent changes in the audit landscape, The SSI Group, a leading audit management solution provider, has observed a significant increase in the volume and complexity of audits facing healthcare organizations today. While government audits are a constant battle, there has recently been an uptick in commercial audits, with SSI clients reporting an astounding 64 percent increase in just one year. Though providers are familiar with the requirements of regulatory audits, it is challenging to identify what private payers require, in terms of documentation, to substantiate a claim.
Further challenging is the fact that each payer has its own internal set of rules and decision-making criteria; what may have been sufficient for Centers for Medicare and Medicaid Services (CMS) may not necessarily work for commercial payers such as Aetna, United Healthcare, or a regional health plan – just to name a few. Moreover, the onset of ICD-10 coding and change to reimbursement structures for public and private payers has added complexity to the audit landscape.
Providers not only have to balance the external stressors on the audit process, but must also examine, and minimize, the internal issues and errors. Specifically, billing errors – caused by poor documentation, understaffing or a lack of understanding of the proper coding procedures – greatly cripple the audit management process. Through the identification of organizational weak spots, hospitals can devote resources, training, and education to reducing these errors and subsequent audits. When an audit does occur, facilities are then fully prepared to provide the documentation necessary to validate the claim.
Providers must find a way to successfully manage the audit process, especially given the intricacies of audits and individual payers’ nuances. Effectively identifying dollars at risk, ensuring compliance with audit requirements, and trending concurrent audits, denials, and appeals is achieved via a centralized audit management system. These solutions provide the ability to match an auditor with an information request, determine the reason for an audit, and identify the appropriate document to provide to prevent recoupment. Moreover, they enable providers to trend their own data and understand the patterns impacting revenue.
Providers Face Surge in Audit Frequency
On the regulatory side, the variety of audits has continued to expand as well via CMS initiatives, state Medicaid audits, diagnosis-related group (DRG) payment integrity reviews, and other programs. Commercial payers, on the other hand, do not publicize where their efforts are focused. With limited knowledge of commercial payers’ activities, statistics and details on commercial denial trends are sparse, and difficult to collect and analyze.
The Cost of Increased Audits
While there are no public figures available on the cost of private payer audits, the American Hospital Association does track the cost of CMS Recovery Audit Contractors (RACs) reviews of Medicare payments via its RACTrac survey.
AHA’s Q4 2015 figures showed how much hospitals spent to manage the RAC process:
- 48% of spent more than $10,000
- 29% spent more than $25,000
- 7% spent more than $100,000
In all likelihood, private payer audits are equally as costly, or possibly more, because of the lack of visibility into their processes. These administrative costs include the resources allocated to evaluating and preparing documents, conducting audit training, providing documentation, hiring additional staff, and investing in the technology required to respond effectively.
The Case for Audit Management Solutions
If providers rely on manual practices to sort and route documents to appropriate personnel, they run the risk of experiencing routing errors and costly delays. Unlike CMS audit notifications, which may arrive electronically, most commercial audit processes are highly paper-based.
In an age where providers are inundated with complex audit requests, audit management software has become a necessary tool helping providers respond to requests and analyze audit trends in ways that will help them improve performance and identify revenue at risk in the future. The software can help classify and sort data from different types of audits, including automated and complex denials, pre- and post-payment audits, and formal or informal audits. These solutions also integrate with contract management tools to identify overpayments and the trends related to overpayments for any given time period designated by audits.
Identify Revenue at Risk
With an automated audit system, providers can identify revenue at risk based on the types of appeals that have been won or lost, and evaluate denial and appeal trends for each facility. They can also identify facilities or procedures that are most likely to be audited, along with the source of billing or administrative errors that can lead to audits. With this information in hand, they can proactively implement corrective measures. Plus, with an electronic record of each audit, the system can alert users to “double jeopardy” situations – attempts to audit a previously reviewed procedure a second time for a different reason.
By replacing manual processes with a sophisticated audit management tool, providers can:
- Automate workflow
- Eliminate time-consuming printing, re-scanning, and redundant data entry
- Track appeals and identify successfully appealed claims for further analysis
- Track and trend denials and audits
- Store all audit data
- Protect revenue through avoidance of future take-backs
Reducing Risk
Ultimately, audit management software reduces risk for providers. Facilities can ensure compliance across the organization, avoid timely filing delays, and gain the ability to proactively manage documentation. A centralized audit management system, rather than multiple disparate systems, provides an organization-wide view of audit activity and a means of ensuring consistent responses.
These solutions provide the ability to identify under- and overpayment cases and offer transparency into dollars at risk of audit take-backs and dollars currently in a denied status. They also help facilities identify the most at risk audit issues.
An Automated Approach
As the healthcare landscape continues to evolve, the volume and variety of claim audits will inevitably increase. Responding to audit requests quickly, accurately, and efficiently requires an automated approach, which will ensure compliance while also providing access to trending data. In order to conquer this uncertainty and take control, providers should select an audit management solution to streamline the process and protect future revenue.
About SSI
The SSI Group, Inc. (SSI) offers an advanced portfolio of revenue cycle management solutions to help health systems get paid quickly and accurately. The company’s product portfolio is comprised of Access Management, Claims Management, and Financial & Performance Management. A privately held company with over 25 years of steady growth, SSI has earned client trust and is recognized as providing the highest level of support in the industry. As healthcare evolves, SSI continues to expand and develop solutions in response to providers’ changing needs.
For more information about SSI, please visit www.thessigroup.com.
For more information about SSI’s audit management solutions, visit: connect.thessigroup.com/auditmanagement
