Corporate Compliance

1. Choose which testing method is right for your audit
2. Rehab: Marketing audits help find hidden money
3. Gov't audit insider

Healthcare Auditing Weekly, August 26, 2003

Health Care Auditing Strategies
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Guide to Compliance Auditing: Applying OIG Techniques and Tools
Strategies for Health Care Compliance
August 26, 2003
Vol. 1, No. 17

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In This Week's Issue

  1. Choose which testing method is right for your audit
  2. Rehab: Marketing audits help find hidden money
  3. Gov't audit insider

This Week's Headlines

1. Choose which testing method is right for your audit

There are three major categories of auditing tests:

1. Control tests-Do these to obtain evidence about the achievement of control objectives. If the auditor obtains the necessary assurance regarding objectives through the use of nonsampling tests, sampling tests are not necessary.

When planning your control tests, consider the objectives of each test, including what constitutes a deviation. Clearly indicate the specific control test and your plan to evaluate operating effectiveness. You should measure effectiveness in terms of the rate of deviations in units or dollars from prescribed controls.

2. Compliance tests-Do these to obtain evidence about compliance with significant provisions of laws and regulations.

3. Substantive tests-Do these to obtain evidence that provides reasonable assurance that financial statements (such as Medicare cost reports) are free of material misstatements. There are two types of substantive tests: (1) substantive analytical procedures and (2) tests of details.

For more information on audit testing, order the book "Guide to Compliance Auditing: Applying OIG Techniques and Tools." This book also offers ideas for planning a compliance audit, ready-to-use standards and working papers the Office of Inspector General uses, step-by-step audit programs for areas such as research and bad debts, plus information on how to apply the Government Auditing Standards to your own compliance and monitoring program. For more information, click here.

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Health Care Auditing Strategies, the 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%, Click here or call 800/650-6787 and mention Source Code EN1614B.

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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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    Take advantage of these subscriber benefits, as well as auditing best practices and how-to articles by subscribing to Health Care Auditing Strategies. Save 10% by ordering online.

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    2. Pay-Per-View article: Rehab: Marketing audits help find hidden money

    A marketing audit allows rehabilitation providers to maximize the amount of money they receive from new patients and take stock of competitors. Marketing audits show you where your marketing dollars are going and whether they are working for you. After these audits, you ought to be able to spot holes in your practice where you've wasted marketing money, and then create a plan to fill them.

    To find out how to perform a marketing audit, order the pay-per-view article "Rehab: Marketing audits help find hidden money." 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 August 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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    Network with your audit colleagues

    "Audit Talk" is a new, moderated chat forum that members can use to post messages or questions for their peers 24-hours-a-day. "Audit Talk" offers a free forum to network, share ideas, and solve problems for those in the audit industry. Getting involved is easy. To subscribe, just send your request to this e-mail:

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    Outpatient cardiac rehabilitation services

    The Office of Inspector General's (OIG) objective for this audit was to determine whether Medicare properly reimbursed Saint Luke's Medical Center (SLMC) in Milwaukee for outpatient cardiac rehabilitation services. Specifically, the OIG determined whether

  • the SLMC's policies and procedures reflected Medicare cardiac rehabilitation coverage requirements for direct physician supervision, "incident to" services, and Medicare covered diagnoses
  • payments to SLMC for outpatient cardiac rehabilitation services provided to Medicare beneficiaries during calendar year (CY) 2001 were for Medicare covered diagnoses, were supported by adequate documentation, and were otherwise allowable for reimbursement
  • services related to outpatient cardiac rehabilitation services provided by SLMC were separately billed by and reimbursed to SLMC or any other Medicare provider

    The OIG did the following to meet its objective:

    1. Compared SLMC's current policies and procedures for outpatient cardiac rehabilitation to national Medicare coverage requirements, and then identified any differences.

    2. Documented how SLMC's staff provided direct physician supervision for cardiac rehabilitation services and verified that SLMC's cardiac rehabilitation program personnel were qualified in accordance with Medicare requirements.

    3. Verified the availability of advanced cardiac life support equipment in the cardiac rehabilitation exercise area.

    4. Obtained, for each sampled beneficiary, the CY 2001 Medicare outpatient cardiac rehabilitation paid claims and lines of service, and then compared this data to SLMC's outpatient cardiac rehabilitation service documentation.

    5. Reviewed medical records maintained by the cardiac rehabilitation program to determine whether services were provided "incident to" a physician's professional service.

    6. Verified the accuracy of the diagnoses identified on the Medicare claims to each beneficiary's inpatient medical record, the referring physician's medical record and referral, and SLMC's outpatient cardiac rehabilitation medical record.

    7. Verified that Medicare did not reimburse SLMC beyond the maximum number of services allowed. The OIG did this by obtaining Medicare payment history data for its statistical sample of beneficiaries, identifying any claims related to the outpatient cardiac rehabilitation services provided by SLMC, and ensured that services were not billed separately to Medicare.

    8. Determined the extent to which providers were currently complying with existing Medicare coverage requirements.

    To read the audit report "Review of Outpatient Cardiac Rehabilitation Services at Saint Luke's Medical Center in Milwaukee, Wisconsin," click here.

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