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Written by: Bob Habasevich, PT on Wednesday, February 13, 2013 Posted in:

Today, I am again reminded how RACs have become the focus of our industry — sort of like driving by looking in the rear view mirror. In the new era of healthcare reform and accountable care, successful IRFs must not only focus upon defending critical dollars from RAC auditors, but also address the entire spectrum of revenue integrity and compliance issues threatening their bottom line.

This blog will review the issues affecting most hospitals and health systems; outlining the steps organizations should be taking to continue to serve their patients effectively and efficiently.

Assessing Revenue Integrity and Compliance

By now, most IRFs are somewhat prepared for RAC audits. Most have installed tracking systems and deployed teams to handle the onslaught of record requests and justifications why the hospital should be paid for doing what it did. But the RACs represent only the tip of the iceberg when addressing the more significant issue in the industry- Patient Care Accountability and Value. Going forward, the real test of revenue integrity and compliance will demand answers to the following questions:

How confident are you that your organization is able to:
(1) support every dollar of current revenue earned? And,
(2) justify and accurately classify each patient for payment , capture all appropriate charges and correctly bill for all services provided? And,
(3) prevent future losses?

If you are unable to provide a resounding “YES, Very” in responding to these questions, I offer for your consideration the focus upon several key performance issues.

Critical Revenue Integrity and Compliance Issues

Specifically, successful IRFs will pay attention to these factors:

Efficient, low-cost post acute rehabilitation care

Given the existing constrained payment environment and steady deterioration of payer mix, IRFs will have to run their inpatient operations much more efficiently – meaning reduced supply spending, increased clinician productivity and effective revenue management. The focus of care and payments will continue to shift to returning patients to the community with a significant reduction in the cost burden of care and avoiding readmissions and hospital acquired conditions will become increasingly important.

Appropriately documenting and justifying services provided

In response to thinning margins and greater scrutiny of appropriateness of payments to providers, hospitals must record all services provided and materials used accurately and in a timely manner.  Particular attention should be paid to identifying missed treatments and failure to deliver the patient plan of care.

Tighter integration with physicians

Physician documentation represents the key evidence needed to ensure that services provided and materials used are appropriately delivered and in compliance with all related guidelines. Clinical documentation performance improvement efforts are critical to revenue integrity and compliance. (Note also that, in the not too distant future paid physician oversight, joint payer contracting, and bundled payments under accountable care, physicians will have greater incentive to comply with documentation guidelines.)

Robust use of clinical IT

Successful IRFs will ramp up investment in information technology that enables tighter adherence to evidence-based guidelines, more rigorous data collection and management using performance metrics, and better transparency and exchange of patient information.

Greater investment in the “front end” of post acute care

Facilities should make use of enhanced approaches that enable clinicians to identify and manage patients in lower-cost settings and avoid unnecessary utilization of high-end, high-cost IRF settings services, thus aligning care with medical necessity while providing advantages to hospitals under accountable care.

Integration on the “back end” of care

Successful hospitals will seek to avoid excessive discharges to post-acute institutional providers (SNFs, LTACs), and in many cases may choose to align with home health providers and ambulatory care providers in order to reduce the financial risk of wide quality variability in the post-acute environment.

First Steps toward Success

With these issues in mind, the strategy that progressive organizations are taking to enact a more proactive and holistic approach to revenue integrity and compliance starts with the following steps:

1.   Engage CDM coordinators: Supplies and services listed on the charge description master (CDM) drive the majority of hospital claims reimbursements and a current and accurate charge master is critical to optimizing returns and avoiding misalignment therapeutic procedures and diagnostic or impairment codes. Proper maintenance and management of the CDM reduces overpayments, automated take backs, underpayments, fines and penalties. And yet, insufficient attention is given to the accuracy of what is coded and billed with what was clinically provided; an oversight in consideration of the fact that all audits are triggered by automated or focused review of these records.

2.   Scrutinize your care processes documentation: Implement a system to monitor and capture all care interventions on a continuing basis. We are finding that, at many organizations where a strict revenue integrity process is not in place, a significant amount of money is being denied due to failure to document the delivery of all elements of the patient’s care.

3.   Implement a clinical documentation improvement program: Accurate and comprehensive physician documentation is key to a provider’s ability to justify the appropriateness of care delivered and payment received. An increasing number of progressive organizations are investing in clinical documentation improvement programs to ensure the integrity of their claims.

4.   Appoint a dedicated physician advocate: A dedicated physician advocate provides medical expertise and clinical judgment to improve the appropriateness, quality and cost-effectiveness of patient care. The responsibilities of this role include serving the hospital through teaching, consulting and advising both the care-management process and the clinical staff on matters regarding physician practice patterns, utilization of resources, medical necessity and clinical documentation improvement. The dedicated physician advocate utilizes a series of compliance reports to share with the clinical team and streamlines communication between care managers and clinical staff, helping secure staff buy-in for continuing improvement efforts.

5.   Implement code alerts: Progressive organizations have looked into technology to eliminate conflicts between diagnosis, impairment and procedure codes on physician orders, care plans and clinical documentation. They rely on software to identify incorrect CMG assignments or lack of medical necessity.

With the changes and challenges looming on healthcare’s horizon, it is important that IRFs become proactive in managing their revenue integrity and compliance as a whole. Managing patient care and patient margin simultaneously raises the accountability and effectiveness of team delivered rehabilitation. It is not enough to prepare for the possibility of one of the many audits that will likely come our way. The focus upon revenue management and compliance management is the first step.

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