Corporate Compliance

1. Find and monitor all conflicts of interest
2. Define exclusions from your sample population
3. Gov't audit insider

Healthcare Auditing Weekly, May 1, 2003



Health Care Auditing Strategies
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Guide to Compliance Auditing: Applying OIG Techniques and Tools
Strategies for Health Care Compliance
Tuesday,
May 27, 2003
Vol. 1, No. 4


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EDITOR'S PICKS

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

The OIG Work Plan for Fiscal Year 2003

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Tip of the Week

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

Question of the Week

In This Week's Issue

  1. Find and monitor all conflicts of interest
  2. Define exclusions from your sample population
  3. Gov't audit insider

This Week's Headlines


1. Find and monitor all conflicts of interest

It's more important than ever for health care organizations to make sure their conflict of interest policies and procedures really work. Auditing these conflicts may help you determine whether management is responding consistently to any conflicts of interest already disclosed. Use the following steps:

1. Obtain a list of personnel with purchasing capabilities from the information services department.

2. Find out to whom your organization last sent conflict of interest forms. Obtain a list of current board members and their places of employment.

3. Compare the list of people who last received the conflict of interest form to the list you compiled in step one. Determine whether the recipient list complies with your organization's conflict of interest policy.

4. Determine whether your organization's current vendors employ any board members. If so, document the board member's relationship with the vendor and the year-to-date expenses the hospital has paid to the vendor.

Editor's note: To get all 12 steps to a conflict of interest audit program, go to "Find and monitor all conflicts of interest in your organization." 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.

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    2. Define exclusions from your sample population

    The first step in the sample selection process is to define a population or collection of entities. Depending on the hospital and the audit's purpose of the audit, there may be exclusions from the population.

    Think through any potential exclusions before selecting the sample; this is essential. For example, many hospitals elect to exclude all payers except Medicare from an inpatient audit-even when private payers in their state reimburse according to the diagnosis related group system. While a hospital may want to focus on Medicare claims, the Office of Inspector General recommends that compliance plans apply to all payers equally. Perhaps more important, significant data may be lost by excluding all payers except Medicare. For example, it would be valuable to know whether a hospital's Medicare coding error rate differs at all from the error rate for other payers.

    Although you need to be careful when making exclusions, it is often wise to exclude certain segments from the population-especially when certain segments may skew results. For an inpatient population, a hospital may want to exclude psychiatric cases and/or newborns. You may also discuss excluding very long or very short lengths of stay, as they are not representative of the population at large.

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    3. GOV'T AUDIT INSIDER

    Review of Medicare contractor administrative costs

    The OIG performed this audit in order to review the records and supporting documentation gathered by a Medicare contractor. The documentation related to $104.8 million of costs set aside for resolution by the Centers for Medicare and Medicaid Services. In its audit, the OIG determined whether the costs were reasonable, allocable, and allowable for Medicare reimbursement. To do so, it selected fiscal year 1998 costs for review from costs that were set aside in the OIG's initial audit. The OIG used the following steps as part of its audit of non-chargeback indirect costs claimed by one contractor:

    1. Obtain documentation of the allocation and flow of costs through the contractor's accounting system using the following reports and records:

  • General ledger
  • Unallocated detail expense report
  • Account control number report
  • Cost control sheet by department
  • Residual report
  • PowerPlay reports
  • "From to" and "To from" reports
  • Final Administrative Cost Report (FACP)/Interim Expense Report

    2. Use these reports to determine the following:

  • The nature of costs, both actual and budget
  • How costs were grouped by financial codes and account control numbers
  • The method of department cost allocation (ROSA)
  • The transition from budgeted costs to actual (residual) costs being claimed
  • The costs allocated in each layer of ROSA from CAN costs to Medicare Part A and Part B reimbursable costs claimed on the FACP

    Editor's note: For more on auditing administrative costs, go to "Follow Up Review of Administrative Costs Claimed by Blue Cross Blue Shield of Florida for Fiscal Years 1995 Through 1998."

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