CASE STUDY: St. Joseph Medical Center Compliance 360 GRC Software Suite
2 CASE STUDY: St. Joseph Medical Center Background Since June 1, 1887, when the doors opened at Houston s first hospital, St. Joseph Medical Center has offered compassionate health care to generations of Houstonians. From Houston s first emergency care facility, to Houston s first OB department (delivering one in every three Houstonians), to Houston s first teaching hospital, St. Joseph Medical Center has advanced patient care through technology, research and the experience of caring and dedicated physicians, nurses and staff. Today, St. Joseph Medical Center provides a full range of comprehensive medical and surgical services, such as, cardiology, cancer care, behavioral health, intensive care/ critical care, emergency care, neurosurgery, orthopedics and a full service women s hospital on the campus. St. Joseph Medical Center has earned The Joint Commission s Gold Seal of Approval by demonstrating compliance with national standards for healthcare quality and safety. Additionally, St. Joseph Medical Center was named by the Houston Business Journal as the #1 best place to work in Houston, among companies with 500 or more employees. Joint Commission s Gold Seal of Approval by demonstrating compliance with national standards for healthcare quality and safety Named #1 best place to work in Houston, among companies with 500 or more employees by the Houston Business Journal Objective: Protect legitimate revenues from being recouped through RAC audits
CASE STUDY: St. Joseph Medical Center 3 Increasing Challenges As a participating healthcare provider in Medicare and Medicaid programs, St. Joseph Medical Center is subject to a variety of medical claims audits as prescribed by the Centers for Medicare and Medicaid Services (CMS) and the Office of the Inspector General (OIG) of the United States Department of Health and Human Services (HHS). With the introduction of the Recovery Audit Contractor (RAC) program by CMS, St. Joseph Medical Center faces a new, much more expansive audit risk. The RAC program is unique in that the RAC auditors are paid a commission as a percentage of the Medicare payment errors they correct. This applies to the recoupment of overpayments to healthcare providers as well as reimbursement for underpayments. As a result of the commission payment structure, the RAC auditors are viewed as being more aggressive with their audits. The process outlined for RAC audits is also very complex with up to five levels of appeal and strict deadlines for initial record requests, as well as each level of appeal. If a deadline is missed by as little as one day, RAC auditors are known to automatically recoup the payments in question. Additionally, the Patient Protection and Affordable Care Act (PPACA) requires that states to establish contracts with one or more Recovery Audit Contractors (RACs) by the end of 2010. These state RAC contracts would be established to identify underpayments and overpayments and to recoup overpayments made for services provided under state Medicaid plans. Due to the aggressive nature and inherent complexities of the existing and impending RAC audits, St. Joseph Medical Center along with all Medicare and Medicaid providers face new challenges to revenue, margins and cash flow. Building A Case For The Right Solution During the RAC demonstration period, news circulated of the additional work the RACs were creating for hospitals and the potential impact on their bottom lines. St. Joseph Medical Center assembled a team comprised of members of various departments including their central business office, health information management (HIM), revenue integrity, case management, and physician services. The team performed a risk assessment to better understand the potential impact Claims Auditor has enabled us to achieve our objectives of responding to record requests in 30 days or less. Having the visibility into outstanding items and approaching deadlines really gives you peace of mind and I can t imagine having to manage this process without Claims Auditor. Cucharras Martin Vice President of Revenue Enhancement that RAC could have on their organization and ultimately determined that millions of dollars in legitimate revenue were at stake. After the assessment St. Joseph considered using spreadsheets and other tools to track their RAC audits, but upon further analysis of their resources they realized that scenario wouldn t be effective. Cucharras Martin, Vice President Revenue Enhancement at St. Joseph Medical Center explains, We considered building a tool through our I.T. department, but because people move
4 CASE STUDY: St. Joseph Medical Center or leave the organization, the same people that built and implemented the tool may not be with us two years from now. Managing and maintaining that tool would become a real challenge. Ultimately, St. Joseph decided that they needed a robust software application to better help them manage RAC and other claims audits. Upon making this decision, St. Joseph compiled a list of requirements. Martin explains, First and foremost, we wanted a solution that was internet based to allow for broader accessibility without having to manage the software on our own mainframe. We also wanted a solution that was adaptable enough to handle other audits beyond RAC. Martin continues, The right solution would help us analyze the data over time so that we could improve our coding and billing practices and would also include functionality to address other critical areas of our compliance program such as internal audit and policy management. After putting together their list of requirements and with upper management s blessing, St. Joseph began their search for a RAC software system in early 2009. They examined an assortment of different RAC tracking tools from a variety of different vendors. After an extensive search, St. Joseph determined that Compliance 360 GRC Software s Claims Audit Manager from SAI Global best met their requirements. Claims Audit Manager Solution The Compliance 360 Claims Audit Manager, licensed for use in over 800 healthcare facilities nationwide, helps healthcare providers take control of medical claims audits and appeals, and protect their legitimate revenues from being caught up in the recoupment of overpayments. With a sophisticated workflow engine, healthcare providers can manage the complexity of multiple, simultaneous recovery audits to ensure that due dates are not missed. Serving as the Virtual We are at the point where we are starting to get some really good data to analyze and are noticing trends that give us insight into areas we need to review; having this capability is really critical. Cucharras Martin, Vice President of Revenue Enhancement Audit Coordinator, the Claims Audit Manager automatically manages each step in the response and appeals process, allowing key personnel to concentrate on high-risk areas and monitor the overall program. The Claims Audit Manager also serves as the claims audit system of record, enabling healthcare providers to establish a common point of control for managing all claims audits including RAC, MIC, MAC, CERT, PERM, ZPIC and commercial payor audits. Working with the SAI Global Professional Service consultants, the implementation of the Claims Audit Manager began on September 3rd, 2009 and went live as scheduled on October 29th, 2009. Since St. Joseph was proactive in both defining their processes and acquiring a RAC management solution, they were well prepared when they started receiving RAC letters in early 2010. St. Joseph has the visibility necessary to determine if and when legitimate revenues are at risk and should not be recouped.
CASE STUDY: St. Joseph Medical Center 5 Results A Virtual Audit Coordinator To date, St. Joseph Medical Center has received requests for over 55 records, which equates to $1.1 million in revenue at risk of recoupment and St. Joseph cites Claims Auditor as being instrumental in helping them manage all of those claims. St. Joseph set an aggressive goal of being able to respond to record requests within 30 days even though the RACs allow 45 days and according to Martin, Claims Auditor has enabled us to achieve our objectives of responding to record requests in 30 days or less. Having the visibility into outstanding items and approaching deadlines really gives you peace of mind; I can t imagine having to manage this process without Claims Auditor. One Solution For Multiple Audit Types St. Joseph realized early on that they would have to contend with more than just RAC audits, so one of the main requirements they looked for in a solution was the flexibility to handle multiple audit types. In addition to managing RAC audits, St. Joseph is currently using Claims Auditor to manage commercial payor audits and based on the success achieve so far, their intent is to use Claims Auditor to manage the broader spectrum of claims audits including MIC, ZPIC, MAC, and CERT audits. TREND ANALYSIS AND REPORTING The reporting capabilities in Claims Auditor are helping St. Joseph refine and improve their coding and billing practices. Denied claims can be analyzed by diagnosis, claim codes, denial reasons, physician and department, and many other claim attributes. According to Martin, We are at the point where we are starting to get some really good data to analyze and are starting to notice trends that give us insight into areas we need to review; having this capability is really critical. Words Of Wisdom Martin states that educating the board of directors and upper management on the impact of RAC and other audits is absolutely critical. Very early on they kept the board and upper management apprised of the RACs and the impact on their organization. When we started down this road, we knew we had to get everyone on board from the beginning, from the hospital board and upper management on down, Martin explains, Our board understood the risk imposed by RAC, so the decision to purchase and implement a solution was driven by the hospital board. Martin goes on to say that because of the board s knowledge and involvement, they are a lot more prepared to handle RAC as well as other claims audits.
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