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© 2016 CHAN Healthcare 1
Unleashing the Power of Data AnalyticsPresented to: 2016 Compliance Institute
© 2016 CHAN Healthcare 2
Today’s Agenda
What Makes CHAN Unique
Adding Value through Data Analytics
Using Data Analytics in the Audit Process
Examples of High Value Data Analytics
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© 2016 CHAN Healthcare 3
What Makes CHAN Healthcare Unique
The only U.S. provider of internal audit, risk consulting and cybersecurity services dedicated solely to healthcare organizations
Our dedication to healthcare gives us deep industry knowledge, insight, and intense focus that are unmatched by any other firm
We help approximately 600 provider care entities across the country effectively manage risk and meet their compliance obligations
We provide more than 5,000 action plans annually to improve controls and processes
CHAN identifies millions in revenue enhancements and costs savings for clients each year
We apply our deep industry knowledge and expertise to develop sound methodology and advanced technology tools
As a subsidiary of Crowe Horwath LLP, CHAN has access to additional subject matter experts and advanced technological innovation
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Data Analytics Definition
Process of identifying, gathering, validating, analyzing and interpreting various forms of data using computerized tools to provide meaningful intelligence.
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Cost
ValueRisk
More risk focused
Risk Value
Cost Cost
Risk Value
More efficient Higher value
Benefits of Data Analytics
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Why Data Analytics? Why Now?
Increasingly complex business landscape
Fast paced business environment
Increasing expectations of stakeholders
Limitations inherent in traditional audit techniques
Need to move towards an environment of more sophisticated risk analysis and monitoring
Availability of powerful data analytics tools
Explosion of data
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Emerging Risks in Healthcare
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Benefits
Investment
Benefits
Investment
Next Generation–With Data Analytics
Traditional Method –No Data Analytics
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Overview of the Internal Audit Process
Risk Assessment and Audit Plan Development
Audit Planning
Fieldwork
Follow Up
Continuous Auditing/Monitoring
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Data Analytics in Healthcare Video
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Risk Assessment and Audit Plan Development
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Data Analytics in Risk Assessment and Audit Plan Development
Provides knowledge and insight into operations
Facilitates and encourages conversations
Adds auditor confidence in uncomfortable areas
Offers a quantified risk assessment
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Examples of Data Analytics – Risk Assessment
Charge capture analysis
Healthcare compliance analysis
Financial analysis
Trending and Benchmarking
Other routines such as patient access, denials, LOS, CDM and E&M analysis
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Example of Data Analytics – Risk Assessment - Financial Analysis
Summarize Trial Balance
By revenue and expenses
By company
Compare current year to prior year
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Example of Data Analytics – Risk Assessment - Benchmarking
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Example of Data Analytics – Risk Assessment - Trending
Regulatory Findings
Audit Action Plans
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Audit Planning
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Data Analytics in Audit Planning
Focuses audit resources on high risk areas
Facilitates audit efficiency
Provides insight into operations
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Example of Data Analytics – Audit Planning – Managed Care
Managed care contract reimbursement risk identified
Management uncertainty of the payors/contracts most at risk
Data analytics identifies high risk payors/contracts of focus
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Example of Data Analytics – Audit Planning – Charge Capture
Perform to target specific department(s) or areas
Use to focus audit resources to high risk areas
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Example of Data Analytics – Audit Planning – Evaluation & Management Codes
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Example of Data Analytics – Audit Planning – Evaluation & Management Codes
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Fieldwork
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Data Analytics in Fieldwork
Uses scarce audit resources effectively
Increases audit efficiency
Allows for analysis of 100% of a population
Provides quantified results
Expedites fraud detection
AUDIT
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Example of Data Analytics – Fieldwork – Managed Care
Audited managed care contract reimbursement
Fieldwork results suggested that the payor was compliant
Gaps were found between charges and contracted rates
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Example of Data Analytics – Fieldwork – System Access
Identify terminated employees with access to critical systems
No process to communicate terminated employees
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Example of Data Analytics – Fieldwork – Payroll Fraud
Engaged to quantify the impact of a PTO fraud scheme
PTO diversion enabled by inappropriate access
Media pressure created urgency in resolution
Supported management in addressing issues
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Example of Data Analytics – Fieldwork – CDM Comparisons
CDM pricing compared to contracts and competitors
Revealed charges below contracted rates
Identified charges above or below market pricing
Success led management to request additional projects
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Example of Data Analytics – Fieldwork – Drug Diversion
Analyzed drug dispensing records and identified:
Late or incomplete drug administration records
Dispensing of drugs from unexpected stations
Excessive waste and witness nurse combinations
Exceptional override, waste and witness transactions
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Example of Data Analytics – Fieldwork – Pyxis Analysis
Audited Emergency Department drug dispensations
Identified dispensations not traceable to a patient log
Success led to ongoing monthly continuous monitoring
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Example of Data Analytics – Fieldwork – 340B Mixed Use
340B mixed use pharmacy audits identified:
Lost savings due to missed 340B accumulations
Ineligible accumulations
Inappropriate inclusion/exclusion of Medicaid activity
Inappropriate monitoring of Orphan drugs
Drug purchases in excess of eligible dispensing records
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Example of Data Analytics – Fieldwork – 340B Contracted
340B contract pharmacy audits identified:
Ineligible accumulations
Credit transactions not being processed
Inappropriate inclusion/exclusion of Medicaid activity
Ineligible carveout drugs
Drug purchases in excess of eligible dispensing records
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Follow Up
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Data Analytics in Follow Up
Very efficient use of resources
Simplified data access
More efficient data validation
Leveraged programming syntax
Straightforward and efficient exception testing
Identification of patterns, outliers and trends
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Example of Data Analytics – Follow Up
Examples of data analytics in Follow Up are as limitless, some examples include:
340B Drug Discount
Charge Capture
Payroll and Paid-Time-Off
AR Valuation (Hindsight)
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Continuous Auditing
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Data Analytics in Continuous Auditing
Traditional auditing
Broadens audit coverage
Uses scarce resources more efficiently
Best Practice
INVOICE
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Example of Data Analytics – Continuous Monitoring – AR Valuation
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Example of Data Analytics – Continuous Auditing – Three Day Rule
TEST DESCRIPTION POPULATION EXCEPTIONS %
Number of Clinic patients meeting 3 day rule requirement – SSN 798 10 12.5%
Number of Clinic patients meeting 3 day rule requirement - Name 798 7 8.8%
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Example of Data Analytics - Continuous Auditing – Duplicate Payments
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Key Takeaways
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Key Takeaways
Rapidly changing industry
Next Generation Internal Audit
Specialized resources
Deeper risk coverage
Innovative thinking
Knowledge growth for Auditors
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© 2016 CHAN Healthcare
The Sky is the Limit43
30 Day Readmissions Analysis 340B Drug Discount Program Review Accountable Care Organization Accounts Payable Review Accounts Receivable Valuation / Hindsight Analysis Anesthesia/CRNA Contract Analysis Balance Sheet Review Cardiac Catheterization and Electrophysiology Lab Charge Capture Charge Description Master (CDM) Review Data Profiling and Outlier Testing Denials Analysis Diagnostic Radiology Charge Capture Drug Diversion Detection Due Diligence Support Emergency Department Charge Capture Employee Expense Reimbursement Analysis Evaluation and Management Coding Analysis Excluded / Sanctioned Provider Analysis Fraud Detection Gastrointestinal (GI) Lab Charge Capture Hospital Acquired Condition (HAC)/Present On Admission (POA) Analysis Hospital NCCI Edit Analysis Interventional Radiology (IR) Charge Capture Invalid Social Security Number Testing and Deathmaster Comparison Journal Entry and Trial Balance Analysis Laboratory Charge Capture Late Charge Analysis Lawson Security / Segregation of Duties Testing Length of Stay Analysis Managed Care Contract / Reimbursement Modeling Maternity Charge Capture Medicaid Managed Care Contract / Reimbursement Modeling
Medicare Managed Care Contract / Reimbursement Modeling Medication Administration Observation Charge Capture Oncology Charge Capture One Day Inpatient Stays Review Paid Time Off (PTO) Fraud Detection Pain Management Charge Capture Patient Access / Admitting and Registration Review Patient Credit Balances Payment Processing Payor Incurred But Not Billed (IBNR) Analysis Payroll Review Pharmacy Charge Capture Physician Charge Description Master (CDM) Review Physician Contract Analysis Physician Practice Managed Care Contract / Reimbursement Modeling Post System Conversion Review Purchasing Cards Analysis Relative Value Units (RVU) Analysis Respiratory Therapy Charge Capture Risk Assessment Dashboard Risk Assessment Support Same Day Readmissions Analysis Scheduling vs. Billing Analysis Statistical Sampling Support Sterilization / Ethical and Religious Directives (ERD) Analysis Supply Chain / Procurement Review Surgery Charge Capture System Interface Testing Three Day Rule Analysis Transfer in Lieu of Discharge Analysis Two Midnight Rule Review Wage and Hour Analysis Wound Care Charge Capture
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Value through Data Analytics
Data analytics can help internal auditors meet their audit objectives. By analyzing data within key organizational processes, internal audit is able to detect changes or vulnerabilities in organizational processes that could expose the organization to undue or unplanned risk.
This enables internal audit to identify changes in organizational processes and ensure that it is auditing today’s risks — not yesterday’s.
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THANK YOU for your time today.
© 2016 CHAN Healthcare 46
We appreciate the opportunity to tell you about CHAN Healthcare and the value
we can bring to your organization.
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© 2016 CHAN Healthcare 47
For more information, please contact:
Terri Allen
Data Analytics Audit Director
Direct: 501.552.6506
In accordance with applicable professional standards, some firm services may not be available to attest clients.
This material is for informational purposes only and should not be construed as financial or legal advice. Please seek guidance specific to your organization from qualified advisers in your jurisdiction.
© 2016 Crowe Horwath LLP, an independent member of Crowe Horwath International crowehorwath.com/disclosure
