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Battling the Onslaught of Payer Audits

Oct 10, 2022 4 minute read

Revenue cycle management (RCM) workforce reductions of 50%-70% have put healthcare organizations in a very tenuous position when it comes fighting back against the onslaught of post-payment audits – which for Medicare have skyrocketed by more than 900% over the past five years. Nor is it likely that those figures will go down anytime soon, given that for every $2 payers invest in post-payment activity, they get a $17 return – an 850% return on investment.

Across the MDaudit user community, external audits were triggered in part by more than $100 billion in denials over a 12-month period. That’s a devastating blow to the bottom lines of organizations that are still struggling to recover from pandemic-driven financial losses – too devastating to simply walk away from without a fight.

Exacerbating the situation is the reality that more than 31% of hospitals are still using spreadsheets to manage their audit programs. Not only does this manual approach increase the risk of error, but it also makes it nearly impossible to do any kind of meaningful tracking and/or trending of where the requests are coming from, audit targets, and/or final outcomes – were dollars retained or returned to the payer – information that payers are most certainly using to manage their own audit programs.

Avoiding Costly Delays

The stakes are high for post-payment payer audits and the process is messy. Any hiccup along the way can result in the loss of thousands – even millions – from a healthcare organization’s revenues. Considering there are typically just 45 days to respond to audit requests, even a short delay can be a costly oversight. Problems can start at the very beginning with the audit demand letter, which is too often directed to the wrong department, stuck in the mailroom, or left undelivered for any number of reasons.

Efficient audit responses require advanced planning to ensure systems are in place to manage the plethora of details involved. Establishing payer audit response teams and procedures in advance enables billing compliance departments to define and efficiently manage all the required audit tasks and individual audit responses as they arise. Comprehensive plans will include such details as who is responsible for the various tasks and when each is due, what services are being audited and by which payer, and who is ultimately in charge of finalizing and sending the audit response – including resubmitting claims or repaying any monies received inappropriately.

For forward-looking organizations focused on revenue integrity, audit management work does not end when the response is submitted. Identifying the root causes and rectifying any systemic issues that led to the denial and audit in the first place is imperative to proactively reduce billing compliance risks and avoid future issues and liabilities.

The Best Defense

The unprecedented onslaught of external post-payment audits makes it imperative for healthcare organizations to get proactive about managing demands and seeing their efforts yield positive results. It is no longer possible to fight back with spreadsheets.

Instead, the first and best line of defense against external audits is a centralized and streamlined process for receiving requests, assessing claims, and qualifying appeals and payment – a process that improves cross-departmental collaboration and productivity to meet even the toughest audit workloads and schedules.

Technology for the Upper Hand

Technology like MDaudit External Audit Workflow makes the process of managing payer audits more efficient by automating the previously manual processes of tracking requests, obtaining, and submitting records, reporting, and staying on top of due dates.

External Audit Workflow allows external audit requests to be managed via a single centralized and secure platform. It streamlines the process of managing and responding to external requests with automated workflows, the ability to electronically submit medical documents via esMD and robust analytics, and improves collaboration between case management, revenue integrity, coding, CDI and physicians through a single centralized platform. Missed deadlines are prevented with task management capabilities and task dashboards, ad-hoc and curated audit reports and robust analytics which provide actionable insights to easily track and trend external audit activity.

The ROI is significant and rapid. One MDaudit External Audit Workflow customer performed 19 audits and was able to retain more than $1 million, which is a 98% retention rate on those dollars under review. Another customer retained about 96% of the total dollars under review, resulting in approximately $90,000 retained. In both cases, these results were achieved within four months of launching External Audit Workflow – and represent just a fraction of the opportunity that exists for both organizations to retain revenues over time.

To see how your organization can benefit from an external audit solution, talk to us today.

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