Using data analytics to assist in compliance auditing and monitoring

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1 Using data analytics to assist in compliance auditing and monitoring HCCA South Atlantic Regional Annual Conference January 27, 2012 Scott Didion Senior Manager Healthcare Governance and Risk Oversight Deloitte & Touche LLP Susan Shiflett, RHIA, CHC Vice President Corporate Responsibility Catholic Health Initiatives Objectives Review data analytics in other industries Understand data analytics in healthcare from the enforcer and provider perspective Understand the value of internal data Discuss how to get started, what to anticipate and how to evaluate effectiveness of the process Explore the expected and unexpected outcomes of data analytics and data forensics 1 1

2 Information governance lead Stewards Metadata Source to Communication enforcement management report Change Data quality Stewardship management 1/22/2012 Lessons learned from other industries Organizations are investing in programs that improve their ability to execute in those areas that contribute to value, and, the successes of strategic improvement initiatives are dependent on the availability, accuracy, and consistency of a wide range of enterprise data Shareholder value Revenue growth Operating margin Asset efficiency Risk management Increase customer growth Location data Strengthen pricing Improve SG&A Financial data Improve cost of goods sold Enterprise data Data outside the enterprise Unstructured data Semi-structured data Structured data Improve PP&E efficiency Improve working capital Hierarchies and categorization data Mitigate corporate/ regularity risks Improve planning and analysis Asset data Data governance Master data Data quality Meta data Data retention and security Data architecture Grow investor trust 2 Lessons learned from other industries (cont.) The data management is top-down, while data integrity is bottom-up Executive IT sponsor Executive business champion Data management review board (LKC council) Sponsorship Direction Data governance program Information governance team Compliance and change management officers Information governance team Enterprise modeling and metadata management team Data stewardship council Management and execution Data domain experts Data architects/data acquisition developer Technical Operations and applications data owners Data stewards Business analyst`s (Users)/reconciliation analyst Business Application in the business 3 2

3 Lessons learned from other industries (cont.) Enterprise information management is an organizational commitment to maximize business value by creating an integrated semantic layer which leverages structured and unstructured information within and external to the enterprise 4 Lessons learned from other industries (cont.) 5 3

4 Data analytics in healthcare compliance In many industries, information management impacts revenue growth, operating margin, asset efficiency, and risk management This is true in healthcare, however, for hospitals, risk management and compliance tends to have added emphasis Enforcement, reputation, quality, efficiency Hospitals are ripe with data and there is going to be more Effective data analytics and information management can provide hospitals with an advantage that safeguard them from reputational/regulatory risks while improving their quality and patient experience Using data to manage readmission rates is a good example of this 6 Data analytics in healthcare compliance Readmission model Data source and model variables In-patient data Demographics Admission status Type of admission DRG/primary Dx Secondary Dx Discharge status Service/revenue codes Out-patient data Demographics Procedure code Diagnosis code Service/revenue codes Pharmacy data NDC/therapeutic class Quantity dispensed Extract transform load + Feature derivation Model variables Age Sex DRG on present claim Type of admission Discharge status Clinical history Diabetes, hypertension, depression, etc. Prescription history Nitrates, beta blockers, lipid regulators, etc. Service history Transport, physiotherapy, laboratory test, etc. 7 4

5 Data analytics in healthcare Enforcer perspective Data direct from MACs and CMS common working file Data is unwieldy and at times too aggregated Often the data is 835/837 specific but does not truly reflect the patient encounter Enforcers may have enough to identify simple errors (i.e. MUEs) but often lack the level of data for an in-depth review Medical necessity review, additional data required Through the appeal process provider and enforcer resources are expended 8 Data analytics in healthcare Provider perspective Start simple, show the value A few simple edits/queries can make a business case Showing the value can free up resources for more edits While enforcers lack depth of data, providers are data-rich Supplemental data can be added to standard reportable data sets Data can be screened prior to bill drop, and corrected real-time before the bill leaves the door Data screening can ear-mark data to identify certain issues making audits time and resource friendly Now is the right time With HITECH/EMRs, 5010 and ICD-10, now is an ideal time to lay down data architecture while systems are being installed/updated and data pulls are being developed 9 5

6 How data analytics applies to you Even the smallest providers can begin being data-savvy Know what internal data is available or potentially available to you Use data warehouse outside the system if necessary (i.e. AHCA, MEDPAR, RAC TRAC, etc.) Running small reports and teaming with internal audit, to provide audit intelligence and support is a great ramp-up to a more data intensive project Data analytics is an investment with very tangible rewards It is not an overnight process, and not without costs The rewards do not come instantly but there is value, obvious, and some unexpected, to investing in a data analytics initiative Real life examples of data becoming actionable information CHI takes data analytics from concept to reality 10 Who Can Relate? How many people currently do some sort of data mining to look for audit issues? What sources do people currently use to identify the audit issues that they should be aware of? Does anyone have any data mining success stories? 11 6

7 Catholic Health Initiatives (CHI) CHI is the nation's third-largest Catholic health care system CHI operates in 18 states: 70+ hospitals; 40 long-term care, assisted living and residential facilities; two community health services organizations; and home health agencies 65,000+ employees Annual revenues of approximately $9 billion 12 Why data analytics? Provider perspective Claims submission Quality of care Strategy and growth Internal data analytics Reimbursement Decision making Operations 13 7

8 Why data analytics? Enforcer perspective MACs RACs ZIPCs MICs Data analytics OIG State RACs DOJ Other 14 Integrated information management model 5 Integrated analytics Integrated analytics Consistent information hierarchies an information structure that supports easy and meaningful consolidation 4 Head Light analytics Financial analytics Operational/ Clinical analytics Common definitions and names a classification system to ensure consistent application and understanding of the meanings and labels of the information 3 2 Tail Light analytics Information process layer Revenue Budget plan and forecast Financial metrics and analytics Operating margin Consolidation, financial reporting and analysis Asset efficiency Operational/ Clinical metrics and analytics Productivity management Implementation capabilities Operational/Clinical data marts Standard calculations application of consistent definitions, calculation methodologies, and assumptions Defined policies a consistent application of policies and procedures Financial HR Clinical Supplies Patient (PDR) 1 Transaction system General ledger Core financial systems Accounts payable Accounts receivable Fixed assets HR Incident/ claims Business systems Adv. clinical outcomes Supplier Cost acctg. Also: External and manual data sources 15 8

9 Compliance data analytics FY 2010 Purpose Identify educational opportunities Mitigate financial and compliance risks Stakeholders Methodology Utilize data analysis to identify potential areas of vulnerability Perform testing of a small random sample Designed as quality reviews 16 Compliance data analytics FY 2011 Purpose Develop internal capability to mine data Identify potential vulnerabilities Identify educational opportunities Mitigate financial and compliance risks Ability to compare data across CHI entities IPPS hospitals Critical access hospitals 17 9

10 Compliance data analytics FY 2011 (cont.) Methodology Risk-based auditing approach Pull from OIG/DOJ/RAC focus areas Utilize claims data from CHI data warehouse PEPPER data as benchmark Identify potential risk populations and outliers 18 Compliance data analytics FY 2011 (cont.) Inpatient risk areas PEPPER target areas Medical and surgical short stays MS-DRG with and without complication/co-morbidity Cardiac procedures (stents, defibrillators) 19 10

11 Sample three-day stay with SNF transfer 20 Sample three-day stay with SNF transfer (cont.) 21 11

12 Compliance data analytics FY 2012 Inpatient RAC focus MS-DRGs Outpatient Inpatient-only procedures performed on outpatients Duplicate surgical procedure codes Evaluation and management visits Observation Transfusions Injections and infusions Debridement procedures 22 Outcomes of compliance data analytics Confirmation that effective controls are in place Identification of best practices Collaborative opportunities Identification of risk areas Process improvement opportunities Data standards Education and training opportunities 23 12

13 Next steps Restructure compliance auditing and monitoring function across CHI Continue to evolve risk-based auditing Increase internal data analytics by utilizing enterprise patient data repository Explore external data analytic resources with clinical services and other data owners/users Medically necessary care settings Clinical appropriateness Other outliers Enhance denials management function 24 How is your organization using data analytics for compliance auditing and monitoring? 13

14 Conclusion Just start! Partner with other data owners in your organization Identify current data analytic activity Understand what external data analytics is being done by regulatory agencies and payers Work with internal and external auditors to do risk-based auditing/monitoring It is an evolving journey! 26 Questions? Scott Didion Deloitte & Touche LLP Susan Shiflett, RHIA, CHC Catholic Health Initiatives 14

15 About Deloitte Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited, a UK private company limited by guarantee, and its network of member firms, each of which is a legally separate and independent entity. Please see for a detailed description of the legal structure of Deloitte Touche Tohmatsu Limited and its member firms. Please see for a detailed description of the legal structure of Deloitte LLP and its subsidiaries. Certain services may not be available to attest clients under the rules and regulations of public accounting. Member of Deloitte Touche Tohmatsu Limited 15

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