Tag: Dana Finnegan

Sep 25
2024

Automation and Reimagining Revenue Integrity

Dana Finnegan

Revenue integrity has become harder to maintain as audits grow in volume and complexity. Payers are increasing scrutiny and regulatory agencies are reinforcing fraud mitigation. Navigating this evolving terrain requires a reimagined, automated approach to billing compliance, coding, and HIM, optimizing accuracy and efficiency to protect revenue.

We sat down with Dana Finnegan, Director of Market Strategy with MDaudit, to discuss what’s behind the scenes of reimagining revenue integrity and the role automation can play in achieving success.

EHR: What is driving the need for hospitals and other healthcare organizations to reimagine their approach to revenue integrity?

DF: We’ve identified four trends that are influencing the need for healthcare organizations to take a fresh approach to revenue integrity, maximize reimbursement and compliance outcomes, and optimize operational efficiency—all of which are critical to sustaining long-term results.

First, the average denied dollars per claim continues to rise. MDaudit data shows an overall increase in denied dollars per claim of more than 19% between 2023 and 2024 and a whopping 62% increase in Medicare Part A and B denials during that same period. At the same time, initial response times to claim submissions are also trending up and, once again, Medicare is the driver. Professional response time has increased by nine days, from 15 in 2023 to 24 this year, while hospital outpatient response days increased from 15 to 19 and hospital inpatient increased from 18 to 22 days.

A third trend we’re seeing is in denial rates, which were 21% for hospital outpatient and 27% for hospital inpatient segments. Finally, dollars at risk from external payer audits have doubled, with hospital billing driving most of the external audits in terms of risky dollars and commercial payers and RAC driving most external audits in terms of volume.

The good news is that we are also seeing an increase in technology investments among healthcare provider organizations, especially AI and automation, to push back against these trends and gain a competitive advantage in terms of revenue integrity.

EHR: How can automation provide a competitive edge in terms of revenue integrity?

DF: Manual healthcare billing audits are resource-intensive and prone to human error. The intricate nature of billing compliance, revenue integrity, and coding demands meticulous attention to detail, which makes it susceptible to oversights and discrepancies.

Consider that the 40 largest U.S. health systems average just under 55 hospitals per system, and bill to a wide mix of government and commercial insurance plans. Commercial, private and self-pay represent the largest payer group for U.S. hospitals with net patient revenue of nearly $689 billion, or just over 69% of the average payer mix. Clearly, billing compliance is a complex, high-stakes game even without the added scrutiny from payers and regulators.

Automating manual processes is a pivotal advancement during what is a very challenging time for the industry. Automated audit processes help billing compliance teams locate the proverbial “needle in the haystack” by identifying the highest billing risk patterns and mitigating risk while maximizing revenue—and it does so faster and more accurately than any human could manage. This lets providers stay on top of the rising flood of demand letters that regularly flow through their doors and leverage the power of data analytics to drive meaningful audit outcomes.

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Oct 6
2022

Corrective Action Plans: Leveling the Audit Playing Field with CAPs

Profile photo of Dana Finnegan
Dana Finnegan

By Dana Finnegan, MDaudit.

The Centers for Medicare and Medicaid Services (CMS) has made no secret of its intentions to crack down on fraud, abuse, and waste, throwing more budget dollars into audits, heightening program integrity oversight of Marketplace plans, and exploring new methods of using advanced technology to conduct more rapid and thorough documentation reviews.

Historically, as CMS goes, so do commercial payers, putting healthcare organizations in the crosshairs of an unprecedented level of third-party external audits. To emerge relatively unscathed, organizations need to put in place proven processes that guide immediate and effective actions in the wake of adverse findings.

With limited time to correct the internal processes or billing practices that contributed to the problems, many organizations are turning to corrective action plans (CAPs) to streamline and accelerate their response to unfavorable outcomes. Those that do also realize the added benefit of having their chances of future billing compliance risks significantly reduced while their ability to achieve revenue integrity is enhanced.

The Audit Environment

The signs of an aggressive audit environment are everywhere. The Department of Health and Human Services (HHS), in its 2022 budget, allocated a staggering $2.6 billion to halting fraud, abuse, and waste in its Medicare and Medicaid programs – up from $180 million in 2021. A primary target is Medicare medical review of fee-for-service claims – which CMS has likely increased due to a robust rate of return to the Trust Funds (estimated to be more than $9-to-$1, based on a three-year rolling average).

The Office of the Inspector General (OIG) has also ramped up its scrutiny of how well provider organizations complied with requirements tied to the use of nearly $180 billion in Provider Relief Funds and with recently enacted mandates such as the No Surprises Act. One survey found that almost 25% of hospitals respond to as many as 2,000 external audit-related monthly requests from multiple sources. While results of many of those audits are confidential, Medicare Fee-for-Service data show a 6.26% improper payment rate in their 2021 report.

When audits by commercial payers identify problems such as overpayments, they may require the provider organization to generate and implement an actionable CAP for the relationship to continue. And while a CAP is not required when a RAC audit uncovers issues with billing practices, the offending provider organization should act swiftly to not only remedy the immediate problem – generally by refunding the overpayments – but also to identify and address any underlying practices or processes that may put the organization at risk for future issues and liability.

Audit pressure isn’t just external. Many healthcare organizations are also ramping up internal scrutiny – and they’re not always happy with the findings. When looking specifically at internal audits, the Healthcare Auditing and Revenue Integrity: 2021 Benchmarking and Trends Report from MDaudit found that more than 30% of the time, audit outcomes are unsatisfactory and have not met acceptable thresholds.

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