Health Information Management

Tip: Know what factors can affect financial risk

APCs Insider, September 23, 2011

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Financial risks can include anything that pertains to the revenue cycle or financial reporting. For example, a staff member decides to hold all claims for two months from the date of service to ensure that all charges are entered onto the billing claim form. This is a financial risk because the decision to hold these claims slows the revenue cycle drastically. This practice also increases accounts receivable and aged accounts.

Not all risk areas remain consistent from year to year. Several factors can affect a facility’s
risk, including:

  • New providers may have little to no formal coding training and could present a compliance risk.
  • New coders, whether they are entirely new to the profession or not, could also present a risk. Just because a coder has several years of experience does not mean the coder knows how to compliantly code the procedures most commonly performed in that facility.
  • New data entry staff may not know the system well. For example, particular codes may require staff members to override the price of a procedure and input the correct, higher or lower, price.
  • Changes in CMS regulations present a risk if a facility fails to stay current with respect to the most recent changes and instead continues to bill for services not covered or underbills or underdocuments for services rendered.
  • CPT® and ICD-9-CM codes change every year. Reporting the correct code for services and staying up-to-date with respect to all coding changes is essential for coders and providers. Educate and reeducate staff to notify them of new code changes.
  • Implementing a new software system, such as a new interface to a facility’s billing system, could also present a risk. Test and monitor the system to ensure that the altered system correctly bills claims and appropriately edits them as well.
  • Leadership changes often bring about new process changes, some of which are positive and some of which could lead to greater risk. When leadership changes, ensure that any process revisions are carefully reviewed and analyzed to determine how they could affect the facility.
  • Providers sometimes perform new procedures before the appropriate code is activated in the chargemaster (CDM). This could present a compliance risk. Coders may also be unsure how to code a new procedure, particularly when documentation does not completely support the appropriate CPT code for the type of procedure performed.

This tip was adapted from Auditing Evaluation and Management Services, A Step-By-Step Guide to Accurate Coding, Reimbursement, and Compliance, Second Edition. For more information or to order a copy of the book, visit HCPro’s Healthcare Marketplace.

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