Is Automation the Answer in Auditing?

In today’s healthcare environment, we are being asked to do more with less. There is an increasing pressure to cut costs, ultimately resulting in staff reductions, and all departments are affected. There has been significant loss of revenue over the past year due to cancelled elective surgeries and other non-urgent care. This has caused shrinking margins; therefore, it is more important than ever to optimize your revenue using current staff resources while remaining compliant.

How can that be accomplished? It boils down to a simple notion, related to the inevitability of external audits, making internal audits a necessity: if the government and major payors are using technology to identify potential errors, then so should you.

The traditional method of proactive internal auditing involved the U.S. Department of Health and Human Services-Office of Inspector General (HHS-OIG)-endorsed method of performing random audits of 10–25 claims per physician, per year; more generally, hospitals typically look at about 100–200 claims annually. The methodology is simple: select your claims, perform a review, enter results into a worksheet, and calculate accuracy rates as you go.

But those figures are a mere drop in the bucket, considering the fact that one physician can submit as many as 4,000 claims per year, while a single hospital can submit tens of thousands.

The traditional auditing method really gives little return on investment. Because the sample sizes are so small, it is likely you are not uncovering all of your opportunities and risks. This traditional method has been with us since the mid-1990s, and it is what we are all “comfortable with”; however, it does not yield the full picture of coding accuracy, and the financial impact of incorrect coding is difficult, if not impossible, to determine using this method.

But what if you could review 100 percent of your claims data—all inpatient admissions, outpatient visits, and professional encounters—using the same or even less manpower, while uncovering risks and new lost revenue opportunities?

That’s precisely what platforms such as Panacea’s own CLAIMSauditor® software provide. Leveraging rules-based AI technology, when setting up an audit, users can either select one or many rules already written from the CLAIMSauditor Rules Library, which consists of thousands of rules written by a team of coding and compliance experts. You can even write your own custom rules, or edit a rule to make it specific to your circumstances.

There are many benefits to using technology to audit claims. Technology gives you the ability to data mine all claims using criteria you specify without burdening IT. You can then search claims based on one or more criteria from the claim, such as CPT, HCPCS, modifier, diagnosis, DRG, revenue code, condition code, patient age, and so on. The combinations of criteria are endless. What’s more, the software allows you to search all claims using any of the data elements present or not present.

Some examples of commonly utilized search parameters include:

• Inpatient encounters with no MCC or CC with LOS and charges above the norm;
• Inpatient surgical accounts missing anesthesia or recovery charges;
• Outpatient pacemaker insertion with no pacemaker supply code;
• Outpatient add-on code with no parent code;
• Outpatient claims reporting procedures with age restrictions to patients not meeting the age threshold;
• E&M Level 5 reported with non-critical diagnoses; and
• E&M problem visit reported with preventive care diagnoses.

The takeaway is that leveraging technology enables you to search thousands, even millions, of claims with specific search criteria to find those claims with risks and opportunities in a matter of minutes. Compared to the traditional process of trying to find that needle in a haystack in a small random sample of claims, it’s clear that adapting your auditing strategy to incorporate automation yields much clearer and more comprehensive results for a fraction of the effort.

For more information about Panacea’s CLAIMSauditor software platform, click here.