There are four key strategies for reducing a provider's audit risk, with corresponding action steps for each strategy.

Ensure that proactive processes, policies, and procedures are in place to handle audit outcomes. Identify potential areas of risk in advance. Establish criteria for pursuing an appeal or payment. Set aside cash reserves to cover high-risk areas. Track costs to determine whether an appeal is worth the effort.

Know your most commonly billed procedures. Review a sample of your claims to identify top 10 MS-DRGs. Make sure appropriate codes and documentation are in place.

Use dashboard tracking technology to determine key metrics related to audit risk. These metrics include:

  • Dollars at risk
  • Dollars resolved
  • Response time-from request for review through appeal level
  • Performance at appeal level report-how many won (green), lost (red), pending (yellow)

Take corrective actions to reduce risk in specific areas. Improve clinical documentation, especially for medical necessity. Provide education to clinicians and physicians on coding issues. Invest in claims editing software. Make certain that encoding systems are up to date. Verify that interfaces are working accurately.

For more information see Lori Brocato, Lynne Byrd and Dawn Crump's "Decoding the Alphabet Soup of Future Audit Risks," hfm, June 2011.


Publication Date: Wednesday, June 01, 2011

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