As health systems, payers, and regulatory agencies ramp up payment integrity and compliance audits, healthcare organizations find themselves embroiled in a high-stakes game where what happens after the audits findings are revealed cannot be ignored.
In one survey, nearly a quarter of hospitals indicated they respond to 500 to 2,000+ external audit-related requests each month from a variety of sources. While the 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 looking specifically at internal audits, the Healthcare Auditing and Revenue Integrity: 2021 Benchmarking and Trends Report from MDaudit found that nearly 33% of the time, audit outcomes are unsatisfactory and have not met acceptable thresholds.
Whether the result of internal audits or external audit requests, once the problematic findings are discovered, the clock starts ticking for healthcare organizations to put into place a plan to correct any internal processes and/or billing practices that contributed to those findings.
A corrective action plan (CAP) is a step-by-step plan of action to be followed to ensure below-par outcomes are swiftly addressed and mitigated. Healthcare organizations create CAPs to drastically reduce the chances of future billing compliance risks and to achieve revenue integrity.
For example, if a RAC audit uncovers issues with billing practices, both the provider and organization must be prepared to act swiftly to not only remedy the identified problem (generally refunding the overpayments) but also to unearth any underlying practices and/or processes that may put the organization at risk for future issues and liability.
Designing Your CAP Checklist
When properly designed and implemented, CAPs are an important tool for guiding appropriate response to problematic audit findings. The most effective plans are designed using a consistent and trackable process to ensure the proper steps are taken, and a paper/digital trail is recorded.
Most CAPs are developed when problematic findings are discovered, and the cause has been identified. Understanding the underlying cause is a crucial step that can be easily overlooked. For example, imagine discovering through an internal audit that a specific procedure is being overcoded about 25% of the time. The organization can do the bare minimum – identifying the claims and submitting a refund – but they should also be analyzing and drilling down to discover the “root cause.” What provider(s) and/or coder(s) were responsible? Was this happening for a specific payer or all payers? How long has this been happening?
Once these and other circumstances are vetted, mitigation and remediation steps can be taken.
Next is the development of the CAP itself, which sets out the process for correcting the root cause by detailing all the necessary steps relating to responsibilities, communication, and how employees will be trained and held accountable for the corrective actions. Once the plan is implemented, the final step is to follow up and report on CAP outcomes, measuring how effective it was at resolving the issue.
Corrective Action Planning Process
- Identification of the problem.
- Understand the root cause to build the appropriate plan.
- Develop the CAP, including timeline and responsibilities. The plan activities may include:
- Correcting the claims and resubmission
- Returning overpayments if applicable
- Implementing organizational changes such as updated policies and/or procedures
- Educating the provider(s) and/or coder(s) on coding integrity and accuracy best practices
- Ensuring corrective action was effective through prospective auditing and future planned audits for said providers and coders
Streamlining the CAP Process with Technology
A growing number of healthcare organizations are seeking to leverage technology to help manage CAPs by deploying solutions that automate the more time-consuming tasks such as building the plan, tracking communications, ensuring deadlines are met, and streamlining the reporting process.
Some examples of software capabilities that will help you manage your corrective action plans include:
- Automated task management to ensure tasks are assigned to responsible parties and are carried out in a defined timeframe.
- Document management and storage to enable a central repository for all the collateral and documentation that needs to be passed between stakeholders during the CAP process.
- Reporting and dashboards to visually track the CAPs and their outcomes.
- Integration within auditing workflows to enable easy visibility into audit results and all corrective action steps taken post-audit.
Ultimately, streamlining CAPs will ensure the follow-up activities are carried out swiftly and accurately – empowering healthcare organizations to mitigate further tangible financial and compliance risks associated with problematic audit findings.
