Charge Capture Auditing .. HowHow to Uncover Revenue Leakage · PDF fileCharge Capture...

Charge Capture Auditing Charge Capture Auditing Charge Capture Auditing …. Charge Capture Auditing …. How to Uncover Revenue LeakageHow to Uncover Revenue Leakage

Bridget Johnson, CIA, CCSA, Audit SupervisorBridget Johnson, CIA, CCSA, Audit SupervisorJoanne Ouellet, CPA, CIA, Audit SeniorJoanne Ouellet, CPA, CIA, Audit Senior

The Methodist Hospital System

Association of Healthcare Internal Auditors2009 Annual Conference

About Us:About Us:The Methodist Hospital System Overview

• No. of Hospitals – 4• Total Net Patient Revenue ‐ $1.2B• Employees 12 153

• Employees – 12,153• Affiliated Physicians – 3,159• Licensed Beds – 1,464• Volumes:

– Inpatient Admits: 68,212 – Outpatient Visits: 498,823p 49 , 3– International Patients: 6,500

• Primary Academic Affiliations: Weill Cornell Medical College & NY Presbyterian Hospital

Association of Healthcare Internal Auditors2009 Annual Conference

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– Weill Cornell Medical College & NY Presbyterian Hospital

Who We Are:Who We Are:TMHS Internal Audit Department

Team Profile ‐ 9 team members – VP, Business Practices Officer & Chief Audit Officer

Di t I t l A dit– Director, Internal Audit– Audit Supervisor– 4 Senior Internal Auditors– 4 Senior Internal Auditors– 2 Senior IT Auditors

• Experienced: 6 ‐ 20 years p y• Credentialed: 21 designations

– CIA, CISA, CCSA, CHC, CISSP, CHFP, CPA, MBA• Recognized: IIA’s Recognition of Commitment Award

ffObjectives of SessionObjectives of Session

•• Identify Charge Capture Risks in Selected Clinical Areas Identify Charge Capture Risks in Selected Clinical Areas from Point of Service to Billfrom Point of Service to Bill

•• Design Tests to Discover Lost Reimbursement Design Tests to Discover Lost Reimbursement OpportunitiesOpportunitiesOpportunitiesOpportunities

•• Quantify Potential Reimbursement ImpactQuantify Potential Reimbursement ImpactQ y pQ y p

Consider….Consider….• A review of data from more than 100 hospitals, which

encompassed more than 30,000 complete medical records and comprehensive billing and collection records showed p gthat, on average, the organizations were losing 1 percent of revenue to errors in the charge master or charge capture.

• Hospitals typically are not aware of the degree to which they may be missing charges.

• Appropriate charge capture is not only important for capturing revenue but also for tracking use of resources.

Finding the LeaksFinding the Leaks

•• So how do you uncover So how do you uncover yythe leaks?the leaks?

•• Where should you look?Where should you look?

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Where to look…Where to look…

•• Start with clinical areas that should generate large Start with clinical areas that should generate large amounts of revenue such as:amounts of revenue such as:

–– Emergency DepartmentEmergency Department–– Cardiac Cath LabsCardiac Cath Labs–– PharmacyPharmacy

•• Focus on the reimbursement that matters:Focus on the reimbursement that matters:–– Commercial Payers : % of Charge ReimbursementCommercial Payers : % of Charge Reimbursement–– CarveCarve‐‐outs : Implants, High Cost Drugs (HCDs)outs : Implants, High Cost Drugs (HCDs)

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Next Steps . . .Next Steps . . .

•• Understand charge capture process in clinical Understand charge capture process in clinical areas. Specifically…areas. Specifically…p yp y–– How charges are captured (i.e., manually or How charges are captured (i.e., manually or

electronically)electronically)h ( l d l lh ( l d l l–– Charge Monitoring (i.e., reconciliations, daily volumes, Charge Monitoring (i.e., reconciliations, daily volumes,

etc.)etc.)

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Using CAATs toUsing CAATs toUsing CAATs toUsing CAATs toUncover LeaksUncover Leaks

•• Develop tests to uncover lost reimbursement. Develop tests to uncover lost reimbursement. Risks to consider when designing tests are:Risks to consider when designing tests are:g gg g–– Lost charges (i.e. Implants, ER level charges, etc.)Lost charges (i.e. Implants, ER level charges, etc.)–– Incorrect assignment of revenue codesIncorrect assignment of revenue codes–– Missing modifiersMissing modifiers–– Late chargesLate charges

I l t ili ti I l t ili ti –– Incomplete or no reconciliation processIncomplete or no reconciliation process

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How to Uncover Leaks in How to Uncover Leaks in How to Uncover Leaks in How to Uncover Leaks in Emergency DepartmentEmergency Department

Purpose of Test: Purpose of Test: •• To identify missing ER charges. Specifically,To identify missing ER charges. Specifically,To identify missing ER charges. Specifically,To identify missing ER charges. Specifically,

‐‐ ER level visitsER level visits

‐‐Missing injection/infusion chargesMissing injection/infusion charges

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Required Info to Perform Test(s): Required Info to Perform Test(s): ER charge data for all patients includingER charge data for all patients includingER charge data for all patients includingER charge data for all patients includingthe following fields: the following fields:

‐‐ Account NumberAccount Number Date of ServiceDate of Service‐‐ Account NumberAccount Number ‐‐ Date of ServiceDate of Service

‐‐ Insurance Plan CodeInsurance Plan Code ‐‐ Charge AmountCharge Amount‐‐ CDM NumberCDM Number ‐‐ Patient TypePatient TypeCDM NumberCDM Number Patient TypePatient Type‐‐ CDM DescriptionCDM Description ‐‐ CPT CodeCPT Code‐‐ModifierModifier ‐‐ Admit Source CodeAdmit Source Code

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How to Uncover Leaks in How to Uncover Leaks in How to Uncover Leaks in How to Uncover Leaks in ED ED –– Missing ER LevelsMissing ER Levels

Procedure Steps:Procedure Steps:1. 1. SummarizeSummarize on account number to obtain a Master on account number to obtain a Master

File of ER patientsFile of ER patients2. Using the ER Charges File, 2. Using the ER Charges File, ExtractExtract Level Visits using Level Visits using

CPT Code(s) =CPT Code(s) =CPT Code(s) =CPT Code(s) =•• 99281 99281 ‐‐ 9928599285•• 99291992919929199291

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How to Uncover Leaks in How to Uncover Leaks in How to Uncover Leaks in How to Uncover Leaks in ED ED –– Missing ER LevelsMissing ER Levels

Procedure Steps (cont.)Procedure Steps (cont.)3. 3. RelateRelate the ER patient file and ER charges file on account the ER patient file and ER charges file on account 33 p gp g

numbernumber4. 4. AddAdd the account number field from ER Charge file to the the account number field from ER Charge file to the

ER Patient file (Hint: Change the name of the second ER Patient file (Hint: Change the name of the second ER Patient file (Hint: Change the name of the second ER Patient file (Hint: Change the name of the second account number field to avoid confusion.)account number field to avoid confusion.)

5. All instances of blanks in the “second” account number 5. All instances of blanks in the “second” account number 55field field maymay indicate instances where an ER level visit was indicate instances where an ER level visit was not chargednot charged

6 S l t ll l d i di l d ith 6 S l t ll l d i di l d ith 1414

6. Select a small sample and review medical records with 6. Select a small sample and review medical records with your ED Charge Coordinatoryour ED Charge Coordinator

How to Uncover Leaks in How to Uncover Leaks in ED ED –– Infusion/Injection Infusion/Injection

ChargesChargesggProcedure Steps: Procedure Steps:

1. Identify patient’s who were given non1. Identify patient’s who were given non‐‐selfself‐‐administered administered drug; by RevCode = 0250 and HCPCS code = “J”drug; by RevCode = 0250 and HCPCS code = “J”drug; by RevCode = 0250 and HCPCS code = Jdrug; by RevCode = 0250 and HCPCS code = J

2. Using the ER Charges file, identify patients who had an 2. Using the ER Charges file, identify patients who had an infusion or injection charge using the following ACL infusion or injection charge using the following ACL command:command:command:command:

ER EXTRACT RECORD IF MATCH =ER EXTRACT RECORD IF MATCH =(CPT '90772' '90774' '90775' '90765' '90766' '90767' '90768') (CPT '90772' '90774' '90775' '90765' '90766' '90767' '90768') (CPT,'90772','90774','90775','90765','90766','90767','90768') (CPT,'90772','90774','90775','90765','90766','90767','90768') TO "ER_Drug InjTO "ER_Drug Inj‐‐Inf Procedures" OPENInf Procedures" OPEN

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ChargesChargesggProcedure Steps (cont.)Procedure Steps (cont.)

3. 3. SummarizeSummarize on account number in each file to obtain on account number in each file to obtain 33a summary file of accounts with drug charges and a a summary file of accounts with drug charges and a separate summary file of infusion/ injection chargesseparate summary file of infusion/ injection charges

4. 4. RelateRelate the Drug Summary File to the the Drug Summary File to the Infusion/Injection file on account numberInfusion/Injection file on account number

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ChargesChargesggProcedure Steps (cont.)Procedure Steps (cont.)

5. 5. AddAdd the account number field from Infusion Charges the account number field from Infusion Charges 55 ggSummary File to the Drug Charges Summary FileSummary File to the Drug Charges Summary File

6. All instances of blanks in the “second” account number 6. All instances of blanks in the “second” account number field ma indicate instances here an injection/inf sion field ma indicate instances here an injection/inf sion field may indicate instances where an injection/infusion field may indicate instances where an injection/infusion charge was missedcharge was missed

7. Select a small sample and review medical records with 7. Select a small sample and review medical records with 7 p7 pyour ED Charge Coordinatoryour ED Charge Coordinator

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Emergency Department Emergency Department ––Emergency Department Emergency Department Results & Next StepsResults & Next Steps

•• Results:Results:–– ER level charges ER level charges –– Identified accounts that were missing Identified accounts that were missing

ER level visit charges and accounts that had multiple ER ER level visit charges and accounts that had multiple ER level visit charges.level visit charges.

–– Infusion and Injection charges Infusion and Injection charges –– Identified inconsistent Identified inconsistent –– Infusion and Injection charges Infusion and Injection charges –– Identified inconsistent Identified inconsistent charging practice for infusion/injection of noncharging practice for infusion/injection of non‐‐self self administered drugs.administered drugs.

•• Next Steps:Next Steps:–– Apply charges for missed ER level visit and Apply charges for missed ER level visit and

infusion/injections charges to quantify impactinfusion/injections charges to quantify impact2020

infusion/injections charges to quantify impact.infusion/injections charges to quantify impact.–– Discuss with billing department whether the results Discuss with billing department whether the results

warrant rewarrant re‐‐billing accounts.billing accounts.

How to Uncover Leaks in How to Uncover Leaks in How to Uncover Leaks in How to Uncover Leaks in Cardiac Cath LabCardiac Cath Lab

Purpose of Test: To identify missing implant chargesPurpose of Test: To identify missing implant chargesRequired Info to Perform Test(s): Charge data for CathRequired Info to Perform Test(s): Charge data for CathLab patients including the following fields: Lab patients including the following fields: ‐‐ Account NumberAccount Number ‐‐ Date of ServiceDate of ServiceInsurance Plan CodeInsurance Plan Code Charge AmountCharge Amount‐‐ Insurance Plan CodeInsurance Plan Code ‐‐ Charge AmountCharge Amount‐‐ CDM NumberCDM Number ‐‐ Patient TypePatient Type‐‐ CDM DescriptionCDM Description ‐‐ CPT CodeCPT Codepp‐‐ModifierModifier ‐‐ UB Revenue CodeUB Revenue Code

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Procedure Steps:Procedure Steps:1.1. Identify your top 5 most costly implants. Identify your top 5 most costly implants. y y p 5 y py y p 5 y p2.2. Identify the CDM numbers associated with the Identify the CDM numbers associated with the

procedures that correspond to those implants.procedures that correspond to those implants.3.3. Obtain CPT codes for the procedures that correspond Obtain CPT codes for the procedures that correspond

to those implants.to those implants.

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Procedure Steps (cont.)Procedure Steps (cont.)4. 4. ExtractExtract charges that match the implant procedure CDM charges that match the implant procedure CDM

bbnumbers:numbers:Cath_Lab_Charges SET FILTER MATCHCath_Lab_Charges SET FILTER MATCH

(ChgCode,'00254607','00329086','00385153',(ChgCode,'00254607','00329086','00385153',(ChgCode, 00254607 , 00329086 , 00385153 ,(ChgCode, 00254607 , 00329086 , 00385153 ,'00376079','00387969','00388918')'00376079','00387969','00388918')

5. 5. SummarizeSummarize the resulting file by account number to obtain a the resulting file by account number to obtain a master file of patients that had Cath Lab implant master file of patients that had Cath Lab implant procedures performedprocedures performed

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p pp p


Procedure Steps (cont.)Procedure Steps (cont.)6. 6. Extract Extract all charges with a revenue code of 0275 or 0278 and all charges with a revenue code of 0275 or 0278 and g 5g 5

a charge amount greater than $1500 from the original Cath a charge amount greater than $1500 from the original Cath Lab charges file.Lab charges file.

7 7 RelateRelate the Cath Lab Proced re Patients file to the Cath Lab the Cath Lab Proced re Patients file to the Cath Lab 7. 7. RelateRelate the Cath Lab Procedure Patients file to the Cath Lab the Cath Lab Procedure Patients file to the Cath Lab Implants file on account number.Implants file on account number.

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Procedure Steps (cont.)Procedure Steps (cont.)8. 8. Add Add the account number field from Cath Lab Implant the account number field from Cath Lab Implant 8. 8. Add Add the account number field from Cath Lab Implant the account number field from Cath Lab Implant

Charges file to the Cath Lab Procedure Patients fileCharges file to the Cath Lab Procedure Patients file9. All instances of blanks in the “second” account number 9. All instances of blanks in the “second” account number

f ldf ld d h l hd h l hfield field maymay indicate instances where an implant charge indicate instances where an implant charge was missedwas missed

10. Select a small sample and review medical records with 10. Select a small sample and review medical records with 10. Select a small sample and review medical records with 10. Select a small sample and review medical records with your Cath Lab departmentyour Cath Lab department

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To Quantify the Dollar Impact:To Quantify the Dollar Impact:1. Extract accounts with missing implant charges that are 1. Extract accounts with missing implant charges that are g p gg p g

Managed Care Plan accounts eligible for carve out Managed Care Plan accounts eligible for carve out payments. payments.

2 Appl the CDM prices and car e o t rates to each 2 Appl the CDM prices and car e o t rates to each 2. Apply the CDM prices and carve out rates to each 2. Apply the CDM prices and carve out rates to each account based on CDM number and Insurance Plan account based on CDM number and Insurance Plan Code.Code.

3. Calculate a potential dollar impact and discuss with 3. Calculate a potential dollar impact and discuss with billing to determine whether rebilling to determine whether re‐‐billing should occur.billing should occur.

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How to Uncover Leaks How to Uncover Leaks How to Uncover Leaks How to Uncover Leaks in Pharmacyin Pharmacy

Purpose of Test: Purpose of Test: •• To identify high cost drugs (HCDs) not billed using the To identify high cost drugs (HCDs) not billed using the

high cost drug revenue code (e.g. 259)high cost drug revenue code (e.g. 259)

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How to Uncover LeaksHow to Uncover LeaksHow to Uncover LeaksHow to Uncover Leaksin Pharmacyin Pharmacy

Required Info to Perform Test(s):Required Info to Perform Test(s):Pharmacy charge data for all patients includingPharmacy charge data for all patients includingy g p gy g p gthe following fields: the following fields: ‐‐ Account NumberAccount Number ‐‐ Date of ServiceDate of Service‐‐ Insurance Plan CodeInsurance Plan Code ‐‐ Charge AmountCharge Amount‐‐ CDM NumberCDM Number ‐‐ Patient TypePatient TypeCDM D i tiCDM D i ti Q titQ tit‐‐ CDM DescriptionCDM Description ‐‐ QuantityQuantity‐‐ Rev CodeRev Code ‐‐ModifierModifier

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Additional Files Needed to Perform Tests:Additional Files Needed to Perform Tests:•• Pharmacy CDM that includes all of your Pharmacy Pharmacy CDM that includes all of your Pharmacy

CDM numbers that are assigned the high cost drug CDM numbers that are assigned the high cost drug revenue code (i.e., “0259” for your Managed Care revenue code (i.e., “0259” for your Managed Care accounts)accounts)))

•• List of Insurance Plan Codes from your Managed Care List of Insurance Plan Codes from your Managed Care department that includes High Cost Drug definitions department that includes High Cost Drug definitions (i d il h $ ) d (i d il h $ ) d (i.e., daily charge > $250) and carve out payment (i.e., daily charge > $250) and carve out payment percentagespercentages

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Procedure Steps: Procedure Steps: 1. 1. Limit your Pharmacy Charge data to those charges Limit your Pharmacy Charge data to those charges

whose CDM number is whose CDM number is not not already associated already associated with a HCD revenue codewith a HCD revenue code

2 2 SummarizeSummarize the extracted file on account number the extracted file on account number 2. 2. SummarizeSummarize the extracted file on account number, the extracted file on account number, CDM number and date of service and CDM number and date of service and Totaling Totaling the Charge Amount fieldthe Charge Amount field

3. 3. SummarizeSummarize again on CDM number, summing the again on CDM number, summing the Charge Amount field “IF” charge amount field Charge Amount field “IF” charge amount field does not equal zerodoes not equal zero

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does not equal zerodoes not equal zero


Procedure Steps (cont.): Procedure Steps (cont.): 4.4. Calculate an average daily charge by dividing the Calculate an average daily charge by dividing the

charge amount field by the count field.charge amount field by the count field.

Average Daily Charge Average Daily Charge Total Charge AmountTotal Charge AmountAverage Daily Charge = Average Daily Charge = Total Charge AmountTotal Charge AmountCountCount

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How to Uncover Leaks in How to Uncover Leaks in How to Uncover Leaks in How to Uncover Leaks in PharmacyPharmacy

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Procedure Steps (cont.): Procedure Steps (cont.): 5.5. Using your most recent file, Using your most recent file, extractextract the charges the charges

whose CDM numbers have an average daily charge whose CDM numbers have an average daily charge greater than your facilities threshold (i.e. $250)greater than your facilities threshold (i.e. $250)

This is the file of pharmacy items that should beThis is the file of pharmacy items that should bereviewed for HCDs reviewed for HCDs consider multiconsider multi‐‐dose vialsdose vialsreviewed for HCDs reviewed for HCDs –– consider multiconsider multi‐‐dose vialsdose vialsand ointments.and ointments.

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To Quantify the Dollar Impact:To Quantify the Dollar Impact:1. 1. RelateRelate the newly created HCD CDM file with your the newly created HCD CDM file with your y yy y

original Pharmacy Charges file to identify those original Pharmacy Charges file to identify those patient accounts with HCD drug charges. patient accounts with HCD drug charges.

2 2 RelateRelate the HCD Charges file to the Ins rance Plan the HCD Charges file to the Ins rance Plan 2. 2. RelateRelate the HCD Charges file to the Insurance Plan the HCD Charges file to the Insurance Plan Code file and extract only those Managed Care Code file and extract only those Managed Care Plan charges that are eligible for carve out Plan charges that are eligible for carve out payments.payments.

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How to Uncover Leaks in How to Uncover Leaks in How to Uncover Leaks in How to Uncover Leaks in PharmacyPharmacy

To Quantify the Dollar Impact (cont.):To Quantify the Dollar Impact (cont.):3. Calculate a lost reimbursement using the carve out 3. Calculate a lost reimbursement using the carve out

percentage chargepercentage charge4. Discuss the need to re4. Discuss the need to re‐‐bill and recover lost revenue bill and recover lost revenue

with the Billing Departmentwith the Billing Departmentwith the Billing Departmentwith the Billing Department

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QuestionsQuestions

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