Corporate Compliance

1. How to use the S-O to increase audit effectiveness
2. Pay-per-view article: Same-day readmissions
3. Gov't audit insider

Healthcare Auditing Weekly, May 1, 2003

Health Care Auditing Strategies
NEW Newsletter
Guide to Compliance Auditing: Applying OIG Techniques and Tools
Strategies for Health Care Compliance
May 6, 2003
Vol. 1, No. 1

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Auditing news and tips

Sample compliance policies and procedures. (For subscribers to Strategies for Health Care Compliance only)

The OIG Work Plan for Fiscal Year 2003

Ask the Expert

Tip of the Week

Compliance Hot Topics: Billing and Coding, EMTALA, Stark, HIPAA

Question of the Week

In This Week's Issue

  1. How to use the S-O to increase audit effectiveness
  2. Pay-per-view article: Same-day readmissions
  3. Gov't audit insider

This Week's Headlines

1. How to use the S-O to increase audit effectiveness

Audits are an organization's first line of defense against misstated financial statements-and the Sarbanes-Oxley Act (S-O) emphasizes that. Auditors looking for a more prominent role in their organization can use S-O to establish their proper reporting role, says Mark Ruppert, CPA, CIA, CISA, director of internal audit for Cedars-Sinai Health System in Los Angeles.

Use the following tips for proactively addressing S-O's requirements:

1. Help set up a system to allow auditors to report up the corporate ladder, says Frank Sheeder, Esq., a principal with the Dallas-based law firm of Sheeder & Welch.

2. "Be proactive," says Ruppert. "Present S-O, including the changes your organization should consider to comply, as well as action plans for implementation."

3. Use S-O to support changes related to the audit committee and other internal audit related activities, says Ruppert.

4. Strictly adhere to the document retention policies to avoid exposing yourself to obstruction of justice charges, says Sheeder.

To learn more about the Sarbanes-Oxley Act's impact on health care organizations, sign up for the HCPro audioconference "The Sarbanes-Oxley Act: What Healthcare Organizations Need to Know."

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2. Pay-per-view article: Same-day readmissions

Watch for overbilling risk areas

If your hospital routinely discharges patients too soon, then readmits them later the same day, you may have quality and overbilling problems. Conduct a prospective review of all same-day readmissions using the following nine steps from Hank Vanderbeek, MPA, CIA, CFE, a former auditor for the Office of Inspector General's audit services division:

1. Look for past internal reviews of readmissions.

2. Find out whether your fiscal intermediary and/or peer review organization are reviewing your same day readmissions. If they conduct reviews, decide whether the reviews are sufficient.

3. Notify management and applicable staff of your review objectives.

4. Obtain inpatient claims from your claims database or the Centers for Medicare & Medicaid Services' Standard Analytical File.

5. Research applicable federal and state regulations and policies.

6. Analyze discharge codes to determine which location patients were discharged to between the initial admission and readmission.

For the rest of the steps, and more tips on same-day readmissions, go to "Tips for auditing same day readmissions" for the rest of this article. The cost is $10. Subscribers to the online version of Health Care Auditing Strategies have free access to this article. Subscribers to the print edition can find it in their January issues. 28941

You can get even more auditing best practices and how-to articles by subscribing to Health Care Auditing Strategies. Save 10% by ordering online at

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Do your auditing and monitoring practices meet OIG standards?

"Health Care Auditing Strategies," the new 12-page monthly newsletter, can help you get the most out of your audits. It offers practical how-to articles, sample policies and procedures, best practices, and auditing techniques for specific areas, including coding systems, billing systems, cost reports, credentialing processes, employee background checks, education and training programs, and quality of care. For more information, including how you can save 10%, go to Or, call 800/650-6787 and mention Source Code EN1231A.


OIG review of graduate medical education (GME) costs

The OIG's objective for this audit was to determine the accuracy of medical resident, full-time equivalent (FTE) counts used by the hospital for claiming $9 million in GME and $18 million in indirect medical education (IME) payments in its FY 1999 Medicare cost report.

Consider the following OIG recommendations in your next GME audit (based on the agency's FY 1999 review):

1. Review the results of past GME/IME audits with the Medicare fiscal intermediary.

2. Obtain copies of the hospital's FY 1999 Medicare cost report and support intern and resident information system files.

3. Identify all residents who were claimed on the hospital's FY 1999 Medicare cost report for GME and IME and reconciled the FTE counts to Medicare cost report, Worksheet E-3, Part IV for GME, and Worksheet E, Part A for IME.

4. Review the residency programs from which residents rotate at the hospital and determine whether these programs were approved in accordance with federal regulations.

5. Ascertain the length of the [spell out]IRP per specialty and verify whether FTEs were properly weighted.

6. Identify all foreign medical school graduates and determine whether these residents should be included in the FTE count.

7. Obtain the rotation schedules for all claimed residents and verify whether individual FTE time was properly computed and that such time was claimed in accordance with Medicare regulations.

8. Discuss the results of your audit with the hospital.

9. Determine the net dollar effect of your audit adjustments to the GME and IME FTE counts. To do this, recalculate the hospital's FY 1999 Medicare cost report Worksheets E-3, Part IV for GME and Worksheet E, Part A for IME.

For more information, read the OIG audit report "Review of Graduate Medical Education Costs Claimed By The Baystate Medical Center For Fiscal Year Ended September 30, 1999."

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