Modernize Your Program Integrity Operations With These 6 Audit Efficiencies

October 13, 2020

With economic downturn comes increased demand on government and state-funded services — a countercyclical effect that has left state Medicaid agencies with the challenge of having to do more with less. At the same time, healthcare providers are working to balance their own sliding scale of supply and demand, as COVID-19 has thrown many hospitals and health systems into financial disarray.

This all comes at a time when the integrity of the healthcare system and its safety net is particularly crucial, in light of the ongoing pandemic crisis. Simple measures that improve the functionality and effectiveness of program integrity audits may help to enhance sustainability of the Medicaid program by containing costs, maximizing operational efficiencies and alleviating common sources of provider burden. Here are six powerful, yet easy-to-implement audit efficiencies to help bolster your program integrity operations for the current and future healthcare landscape.

1. Build a Pre- and Post-Pay Cost Containment Engine

Implementing pre-payment claim reviews helps to prevent improper payments, while also reducing administrative burden for both payer and provider. However, given the strain on the healthcare system in recent months especially, program integrity activities must span the full eligibility and claims payment continuums. Supplementing pre-payment reviews with strategically defined post-payment audits creates a well-balanced and high-functioning program integrity effort that prioritizes both cost avoidance and overpayment recovery.  

2. Adopt Accuracy- and Efficiency-Enhancing Technology

With state budgets and healthcare resources stretched increasingly thin, new and emerging technology is key to streamlining processes and improving payment accuracy. For instance, solutions using robotic process automation can reduce or even eliminate the need for manual intervention around the claim selection and review process. Similarly, artificial intelligence and machine learning-driven technologies can enhance the accuracy of claims selection, targeting only those with a high likelihood of errors for review. This not only yields a higher savings potential for the payer, but also cuts down on unnecessary documentation requests from the provider.

3. Leverage Extrapolation

Extrapolation broadly describes the process of conducting a statistical sampling of claims in order to calculate overpayments. Extrapolation is a commonly used tool in many industries, including healthcare. Transparent, fair and judicious application is imperative. Methodology and application must be widely known and consistent among all stakeholders. Generally, this method should be reserved for high volume, low dollar claims.

4. Promote Timely Receipt of Documentation

Documentation delays are a common source of audit inefficiency. Instituting policies and procedures that facilitate the timely receipt of documentation can accelerate the review and recovery process. New and emerging solutions are simplifying documentation requests by extracting the necessary information from the medical record, cutting down on extraneous paperwork for providers. 

5. Allow Providers to Self-Audit

Provider self-audits — in which providers review select claims against the appropriate criteria as provided by the payer — can be a highly effective cost containment tool in both the immediate and long term. This method not only allows providers to correct potential errors before an overpayment is made, but it also gives them the opportunity to implement the changes going forward. For the highest likelihood of success, provider self-audits should be deployed in conjunction with a strong education and outreach program to ensure providers are equipped with the tools they need to bill correctly the first time — and to sustain these efforts over the long term.

6. Partner With Providers

Now, more than ever, payers and providers must work together to enhance program integrity and strengthen the healthcare safety net for all of its stakeholders. Provider engagement and education is key to mitigating billing and payment errors that may occur during the COVID-19 emergency and in its aftermath. But more than that, this crisis has amplified the need to eliminate longstanding barriers to collaboration and information sharing; adopting programmatic flexibilities, including adapting audit strategies as the situation may warrant, can help pave the way toward a more efficient and sustainable healthcare environment.

This piece is one of a series of blogs on containing healthcare costs in the age of COVID-19. Our previous post, 5 Potential Sources of COVID-19-Related Fraud, Waste & Abuse, identifies key areas in which payers may be vulnerable to improper payments amid the pandemic crisis, along with practical strategies for preventing and recovering overpayments that have occurred as a result.

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