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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
2011 AHIA Annual Conference www.ahia.org
PMC WestEscondido Surgery Center
Arch PartnersVilla Pomerado
Internal Audit Audit
Department Universe
Palomar Medical Center
Pomerado Hospital PCCC
PMC WestEscondido Surgery Center
Arch PartnersVilla Pomerado
Palomar Pomerado Health is California’s largest
healthcare district, serving communities of Inland
North San Diego County.
Palomar Medical Center
North San Diego County.
Pomerado Hospital PCCC
PMC WestEscondido Surgery Center
Arch PartnersVilla Pomerado
“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”
Palomar Medical Center
Pomerado Hospital PCCC
PMC WestEscondido Surgery Center
Arch PartnersVilla Pomerado“One of California’s
Best Places to Work by the Employers
Group”Palomar Medical Center
Group
Pomerado Hospital PCCC
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
2011 AHIA Annual Conference www.ahia.org
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.
2011 AHIA Annual Conference www.ahia.org
2. Integrating Continuous Monitoring into Internal Monitoring into Internal
Auditing
2011 AHIA Annual Conference www.ahia.org
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
2011 AHIA Annual Conference www.ahia.org
BENEFITS OF AUDIT AUTOMATION
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
2011 AHIA Annual Conference www.ahia.org
BENEFITS OF AUDIT AUTOMATION
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
2011 AHIA Annual Conference www.ahia.org
BENEFITS OF AUDIT AUTOMATION
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
2011 AHIA Annual Conference www.ahia.org
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
2011 AHIA Annual Conference www.ahia.org
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
2011 AHIA Annual Conference www.ahia.org
3. The ROC Formation
“Revenue Optimization Committee” Revenue Optimization Committee at
Palomar Pomerado Health
2011 AHIA Annual Conference www.ahia.org
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
2011 AHIA Annual Conference www.ahia.org
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
2011 AHIA Annual Conference www.ahia.org
REVENUE CYCLE DASHBOARD
REVENUE CYCLE DASHBOARD
2011 AHIA Annual Conference www.ahia.org
REVENUE CYCLE DASHBOARD
REVENUE CYCLE DASHBOARD
2011 AHIA Annual Conference www.ahia.org
REVENUE CYCLE DASHBOARD
$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
2011 AHIA Annual Conference www.ahia.org
REVENUE CYCLE DASHBOARDREVENUE CYCLE DASHBOARD
2011 AHIA Annual Conference www.ahia.org
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
2011 AHIA Annual Conference www.ahia.org
PROVEN SECRETS TO SUCCESSPROVEN SECRETS TO SUCCESS
ROC Ad Hoc ParticipationROC Ad-Hoc Participation
◦ Internal Audit
◦ IT
◦ Physician AdvisorsPhysician Advisors
◦ Nursing
Q lit◦ Quality
◦ Ancillary Departments
2011 AHIA Annual Conference www.ahia.org
PROVEN SECRETS TO SUCCESSPROVEN SECRETS TO SUCCESS
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
2011 AHIA Annual Conference www.ahia.org
PROVEN SECRETS TO SUCCESSPROVEN SECRETS TO SUCCESS
Maintain “HIGH PRIORITY”Maintain HIGH PRIORITY
Sustain Success
Continued Visibility
Support from Executive Team and
B dBoard
2011 AHIA Annual Conference www.ahia.org
PROVEN SECRETS TO SUCCESSPROVEN SECRETS TO SUCCESS
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
2011 AHIA Annual Conference www.ahia.org
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 TasksRevenue Cycle Tasks
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.
2011 AHIA Annual Conference www.ahia.org
Revenue Cycle TasksRevenue Cycle TasksMedicare Admissions Vs. Observations
Analysis identifies patients for case management f
Example
Revenue Cycle TasksRevenue Cycle Tasks
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
2011 AHIA Annual Conference www.ahia.org
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
2011 AHIA Annual Conference www.ahia.org
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)
2011 AHIA Annual Conference www.ahia.org
(chief complaint).
“Medically Unnecessary Setting”“Medically Unnecessary Setting”Admitted or Observation Patient?Admitted or Observation Patient?Admitted or Observation Patient?Admitted or Observation Patient?
“Medically Unnecessary Setting”“Medically Unnecessary Setting”Medically Unnecessary SettingMedically Unnecessary Setting
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.
2011 AHIA Annual Conference www.ahia.org
“Medically Unnecessary Setting”“Medically Unnecessary Setting”Medically Unnecessary SettingMedically Unnecessary Setting
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
2011 AHIA Annual Conference www.ahia.org
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.
2011 AHIA Annual Conference www.ahia.org
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.
2011 AHIA Annual Conference www.ahia.org
2011 AHIA Annual Conference www.ahia.org