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TOPIC: Use settlement agreements as a model for coding audits

HIM Connection, August 16, 2003

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As a general rule, it's a good idea to model a coding compliance program after something the government has already done. Settlement agreements between the government and health care organizations are a great source for such information. Some important lessons that all providers can take from settlement agreements include the following:

--Perform both auditing and monitoring. Every settlement agreement requires that a provider perform both auditing and monitoring. Monitoring is a review mechanism that occurs on an ongoing basis. The rationale for monitoring is twofold: First, the monitoring mechanism allows the provider to identify and rectify issues early; and second, the monitoring results can be used by the audit group in focusing audit content. The monitoring process can be performed internally by the coding manager or supervisor. There should be open communications between the coding manager and the auditor about the process.

--Follow up all audits with focused education. Some settlement agreements have required as many as 30 hours of ongoing coding and billing education per year for an organization's staff. Every settlement agreement has required at least three to five hours of reimbursement-related education for employees involved in the reimbursement process. To maximize the effect of the education sessions, providers should shape the content of the programs based on the audit findings.

--If you aren't sure, educate. Then educate some more. Education is one of the most effective tools to ensure compliance. The HIM department is the department with the most resources in the areas likely to affect compliance. HIM professionals can educate about documentation requirements, coding guidelines, patient confidentiality, medical necessity, and unbundling. Educate your staff in smaller groups to allow for questions and clarity. Educate on focused areas. Follow up each education session with a multiple-choice test to determine retention. Keep all test results on file. Re-educate and re-test often.

--Don't let the finance department become involved in medical record and coding audits. Just as the HIM department should not perform coding compliance auditing, neither should the finance department. Each of these departments carries with it inherent conflicts that would destroy the credibility of an audit.

This week's HIM Connection was adapted from an excerpt of the book, "Coding Compliance: A Guide to the Audit Process." Go to