Self-auditing: Use nurse, staff expertise

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Editor's note: The following is an excerpt from FierceHealthFinance's new eBook, Best Practices For Surviving Audits And Denials. Download the eBook here to read more.

Nothing can bring you peace but yourself. So said Ralph Waldo Emerson, the great champion of self-reliance. When it comes to surviving audits, the maxim also holds true for providers: In pursuit of self-reliance, you can scrutinize your own records before you're audited by someone else.

Many audits and attempts to recoup payments are linked to patterns, such as errors. For instance, a nurse or coder translates a physician's bad handwriting into an inappropriate procedure or the payer or their contractor uploads claims data for billing purposes that contain glitches. Should these errors go undetected, they can be systematically repeated, leading to a snowball of claims rejections.

"An innocent mistake can be blown into something much more than that, and it really reinforces the need for compliance programs," said Anna Grizzle, a partner with the Bass, Berry and Sims law firm in Nashville, Tenn., which represents hospital systems.

Grizzle noted that these kinds of errors can lead to hospital executives' worst nightmare--a False Claims Act investigation from the U.S. Department of Health & Human Services' Office of the Inspector General (OIG).

Providers agree self-auditing is a worthwhile practice, assuming, of course, that providers have the personnel to handle them. As a matter of fact, the OIG recommends it as a best practice. The quality of the self-audit can be limited though, depending on the size and budget of provider resources.

A best practice for conducting self-audits is tapping into existing resources of nurse auditors or coders. As front-line staffers, nurse auditors interface with commercial payers, recovery auditors (better known as RAC) and Medicare administrative contractors (MAC) regularly and have extensive coding experience, which helps them spot potential audit triggers in claims. For instance, nurse auditors can lead the "pre-scrubbing" process, the cleaning up of claims before submitting for payments.

Nurse auditors, by training, are skilled in reviewing recently submitted claims and detecting overcharges, another audit trigger. With thorough review, providers therefore can avoid potential False Claim Act suits by making consistent payments within a 60-day window, according to Grizzle. Not to mention, nurse auditors can identify potential underpayments to the provider, cashing in on money otherwise left on the table.