I sat down with Lise Rauzi, Vice President of Training Development for HCCS, to discuss the government's programs for integrity and recent increases in government audit activity.  I asked Lise to help outline the purpose of the programs and how organizations might best prepare.

DR: Why is the government ramping up its audit activity?

LR:  Simply put, recent government figures show that of the estimated $700 billion wasted in the US Healthcare System, about 40% is due to unnecessary care.  This is why the government has awakened to the idea that strategically improving Quality of Care (QOC) can have a substantial impact on reducing healthcare costs.

All of the government auditing entities, federal and state, are beginning to look at QOC as the foundation for controlling costs.  Their belief is that improving quality of care can bend the cost curve down.  One approach to improving QOC is through their traditional method of auditing.  They intend to impact costs by finding problems in the way care is being delivered and billed that will both improve the QOC and reduce the cost.  They intend to get money back where organizations are not following either government program stated policies or national or regional standards of care.  There is an opportunity during these audits to learn more about what the government’s reasons are for recouping money either through questions asked during the audits or appealing a negative determination.  Data analysis is being used to uncover national or regional aberrant practices in coding and billing.

DR: What do you mean by aberrant practices?

LR:  The government considers aberrant practices to be of two types.  First, if there is an evidence-based standard of care that is widely accepted, the government expects that the care given will conform to that.  If it doesn’t, it is an aberrant practice.  Examples of these would be the many CMS quality measures that organizations are expected to follow and on which they must report.  Other examples might be quality measures which the National Committee on Quality Assurance has adopted, but which might not be in the CMS quality measure set yet.  The second type has to do with accepted national or regional standards of practice.  This is usually based on standards that are publicly available from national, regional or local specialty societies.  Where there are aberrant practices in one region versus others, it can often be traced back to a failure to follow a standard of care (SOC).  The basic question becomes, “Was the care delivered based on some other widely accepted evidence of effectiveness?”  If not, then it is considered unnecessary care.

Questions you can ask to get an idea of how an auditor might approach documentation of services are: “Is this within the SOC for the community?  How does this compare to the National SOC?  How does this relate to evidence based medical practices in similar circumstances?  What other evidence is there that supports the care being delivered?

The easiest way for auditing agencies to uncover potentially aberrant practices is through data analysis.  For example, if one region in the country is doing double the amount of a given service than the rest of the country, and the population size in that region does not explain the variance, then they may elect to audit that service in the region to see whether there are good explanations for the variance.  If there are no good explanations, then some recoupment of payments will follow.

DR: Can you give me an example of an aberrant practice they might be looking for?

LR:  Sure.  Let’s look at the example of admission versus observation.  Should some admissions have been observation status only, should some observations have been admissions?  What would have lead to the best QOC for the patient?  If you choose observation and release, but two days later the patient is back in the ER and needs to be admitted, you may have increased the overall cost of care.  If you admit when the patient only needed to be under observation, you may also have increased costs.  Observation versus admission is one of the targeted areas for RAC audits precisely because they found wide national variances in their data analysis of the number of both observation care services and admissions.

DR:  In Part 2 of this interview, we’ll discuss documentation, how organizations can best prepare for government audit programs and more about quality of care initiatives.