Corporate Compliance

1. Steps for monitoring during transactions and code sets implementation
2. Copayments: Strategies for auditing your organization's collection efforts
3. Gov't audit insider

Healthcare Auditing Weekly, June 1, 2003

Health Care Auditing Strategies
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Strategies for Health Care Compliance
June 10, 2003
Vol. 1, No. 6

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Sample audit programs (For subscribers to Health Care Auditing Strategies only)

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

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In This Week's Issue

  1. Steps for monitoring during transactions and code sets implementation
  2. Copayments: Strategies for auditing your organization's collection efforts
  3. Gov't audit insider

This Week's Headlines

1. Steps for monitoring during transactions and code sets implementation

The privacy rule may have stolen the limelight, but the transactions and code sets deadline under the Health Insurance Portability and Accountability Act (HIPAA) is about ready to make headlines. The deadline to comply with these regulations is October 16.

According to Sheryl Vacca, director of Deloitte and Touche's West coast health care compliance practice in Cosa Mesa, CA, while your organization tests the new transactions and code sets, do the following to make sure they are implemented by the deadline:

During implementation
To measure implementation progress against detailed HIPAA readiness work plans, do the following:

  • Check implementation progress against established deadlines
  • Review electronic testing plans and test results
  • Run code scans to determine whether your organization has eliminated prohibited codes

    Ongoing monitoring activities

  • Determine whether your organization has edit mechanisms in place to flag noncompliant transactions, then test system edits
  • Perform ongoing testing of transactions to confirm that your organization has implemented the HIPAA transactions requirements (e.g., new transactions and addenda to existing ones)
  • Review the budget to determine whether administration should update it for additional remediation costs

    Editor's note: Find out more about auditing for HIPAA compliance, coding, EMTALA, and much more by subscribing to Health Care Auditing Strategies (HCAS), a 12-page monthly newsletter. Click here for more information and to order HCAS. See below for more information on benefits available to HCAS subscribers.

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    In addition to each 12-page monthly newsletter, Health Care Auditing Strategies (HCAS) subscribers receive the following benefits:

  • Audit talk-This is a free forum to network, share ideas, and solve problems for HCAS subscribers.

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    2. Copayments: Strategies for auditing your organization's collection efforts

    Consistently waiving copayments may be a recipe for disaster. Not only do you miss out on revenue-you may also get in trouble with the government and private insurers.

    Start your audit by learning about contractual requirements, including your facility's payer mix and the various co-pays and deductibles of each payer, says Laurisa Riggan, CPA, vice president of corporate compliance and internal audit for Children's Mercy Hospitals and Clinics in Kansas City, MO. "This can get very difficult because one contract can result in numerous co-pays and deductibles," Riggan says.

    Expert Hank Vanderbeek suggests the following seven steps for a successful copayment collection audit:

    1. Audit based on the rules Congress set for allowing waivers, which provide limited protection for certain waivers and incentives.

    2. Review your organization's process to determine when to send patients to the business office for financial arrangements, including payment of deductibles and co-insurance.

    3. Check whether all registration areas have access to current preferred provider organization or health maintenance organization (HMO) contracts. If not, determine ...

    For the rest of step 3 and the other four steps, plus more tips on auditing copayment collection, go to "Copayments: Strategies for auditing your organization's collection efforts." The article costs $10. Subscribers to the online version of Health Care Auditing Strategies have free access to it. Subscribers to the print edition can find it in their June issues.

    Or for only $23 per month, you can get even more auditing best practices and how-to articles by subscribing to Health Care Auditing Strategies. Save 10% by ordering online.

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    Looking for an audit tool from a proven source?

    Coding compliance book streamlines your audit process

    Accurate medical records documentation and coding is a universal, perennial concern that's becoming all the more critical in today's environment of fraud and abuse investigations. "Coding Compliance: A Practical Guide to the Audit Process" will help you to make your medical records/coding compliance audits effective and efficient! For more information, go to Click here or call our customer service department at 800-650-6787. Be sure to mention source code EB1269B.


    Review of Medicaid drug rebate collections

    The Office of Inspector General (OIG) performed this audit to evaluate whether the Arkansas Department of Human Services (ADHS) had established adequate accountability over the Medicaid drug rebate program. The OIG concentrated its review on the ADHS' current policies, procedures, and controls.

    The OIG used the following methodology:

  • Interviewed ADHS officials and fiscal intermediary (FI) staff to determine the policies, procedures, and controls that existed for its Medicaid drug rebate program
  • Interviewed ADHS and FI staff members that performed functions related to the rebate program
  • Obtained and reviewed drug rebate accounts receivable records and compared this data to the Form CMS 64.9R report for June 30, 2002
  • Selected and tested a sample of labelers to determine that source documents matched up with detailed accounts receivable records in the rebate management system

    For more information on the OIG audit, "Review of Medicaid Drug Rebate Collections - State of Arkansas," go to 00042.pdf.

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    To learn more about the Sarbanes-Oxley Act and how it affects internal auditors and compliance officers, order the special report "Sarbanes-Oxley Act: Impact on Health Care Organizations"

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