The end of the Public Health Emergency (PHE) in May marks the official end of the pandemic that’s disrupted our lives and livelihoods for more than three years, which is welcome news, indeed. But for hospitals, health systems, and provider organizations, it also marks the period when Medicare Administrative Contractor (MAC) and Recovery Audit Contractor (RAC) audits begin for claims submitted during the PHE.
The pandemic years brought many federal workarounds, exceptions, and waivers to speed care to those who needed it. Some of those waivers will expire, while there will be a transition period for others. For most providers, this will bring confusing circumstances where certain claims are not allowed on one day but are okay the next.
Establishing and maintaining robust external audit workflows can help organizations respond to demand letters in a timely manner, gather the necessary documentation, easily send supplementary materials, and quickly appeal negative audit findings.
“When the audit request comes in, the clock starts ticking for an organization to respond,” says Dana Finnegan, Director of Market Strategy for MDaudit. “The time is now to create external audit workflows that support fast, efficient, and complete responses to any audit requests.”
What is certain is that more external audits are coming. Is your organization prepared?
How Astute Organizations Should Prepare for External Audits
MDaudit research shows that organizations with manual external audit processes or even those with rudimentary software lose over 50% of the claim dollars that get audited. Think about the collective value of, say, 100 claims. Now, reduce that dollar amount by half.
Effective workflows and robust software can help organizations quickly compile the necessary documentation to respond to audit requests. Prompt and accurate responses can result in less lost revenue, which means providers keep more of their reimbursements and don’t always need to file appeals or deal with escalations.
In addition to developing audit workflows before an audit request occurs, ensure these facets of the audit process are fully addressed.
1. Centralize how demand letters are handled.
Receiving a demand letter is like responding to a fire — the longer one waits, the worse the situation becomes. Treat every demand letter as time-sensitive. Such letters should go to a designated person or department as quickly as possible because the response clock starts when the letter arrives.
Your organization should have a team ready to go, with specific deadlines for each person or department involved. Don’t forget to budget time to review audit responses before they are due back to the requestor.
2. Find the appropriate claims within your software system.
Demand letters can cover dozens, if not hundreds of claims. Finding each claim manually takes considerable time and is prone to human error, which is why a strong auditing workflow supported by software is advised. Storing claims in a central electronic location creates a de facto filing cabinet where the claims being challenged and the documentation can be accessed without the need to click through multiple systems to find needed materials.
3. Review documentation and additional documentation requests (ADRs).
Reviewing each claim for the necessary clinical documentation is a critical process that will be slowed considerably by manual processes. With a robust process, the clinical documentation integrity (CDI) team can call up a claim and find the supporting documentation on the same screen while reviewing the items specified in the demand letter. Ideally, audit software allows a particular claim and the supporting documentation to become electronically attached as part of the audit record.
4. Ensure a timely response.
Much like a complex dance, every step in the external audit process must be carefully choreographed, with particular attention paid to the timing of each as part of the overall response. An auditing workflow dashboard can provide important insight into the process, with appropriate timelines for each task. Is the CDI staff falling behind? How will that impact downstream tasks and the overall schedule?
5. Submit responses electronically when possible.
The ability to receive and respond to demand letters electronically depends on the payer. However, it’s always best to do so when supported, as electronic submission is often easier and it provides an immediate acknowledgement that the response was received. Not only does electronic submission save time and headaches, but it also saves printing, mailing, and labor costs.
6. Be prepared for possible appeal or escalation.
As you know, an external audit often results in much back-and-forth between the provider’s audit team and the payer or auditor from whom the demand letter originated with questions, concerns, and requests for additional documentation. Ensure that your auditing software supports the easy escalation of audits and multiple appeals, making a fraught process a bit easier.
Advanced Planning Is the Right Call
Regulators approved additional federal dollars to support increased audits even before the end of the PHE was announced, leaving little doubt that organizations of all sizes will face a sharp increase in external audit requests in the coming months and years.
Like any workflow, it’s far better to create a plan in advance – including defined roles, responsibilities, and deadlines – and have a streamlined, technology-enhanced audit workflow than wait for auditors to knock before acting.
Learn more about streamlining your external audit management here.
