Software Audit Tools

The Right Tool for the Job

Since the beginning of 2011, providers have been overwhelmed by a tidal wave of pre- and post-payment Medicare audits that has upended the industry. Providers have been trying to keep their heads above a sea of requests for documentation, and didn’t necessary have the tools or business processes in place to respond to the requests. And the longer the process, the longer their funding is held in limbo.

And there’s no end to this audit storm surge in sight. CMS’s commitment to Medicare audits has been immense. CMS ramped up its program integrity budget over the past two years, building up a vast reservoir of auditing resources. In the fiscal year of 2010, $311 million was invested for program integrity; a 50 percent increase from 2009’s outlay. The payoff for CMS has been considerable. Approximately $3 billion was recovered in 2010, and the government estimated it would recover more $10 billion in 2011 (the results of last year’s audits are still being tabulated by CMS).

Moreover, not only has the volume of audits been ramped up, but the intensity of the auditing process. Some types of CMS audits, such as ZPIC audits, can be extremely aggressive. If a provider suffers from numerous claims lacking the proper documentation, the ZPIC auditors can put the provider on 100 percent pre-payment audit. That means every claim is held up until the auditors are satisfied.

So, providers have had to beef up their documentation efforts to ensure that they are getting the right documentation with each and every incoming claim, and that it is formatted in such a way that it will not raise a red flag. To that end, one of tools to help providers make the audit process as smooth and rapid as possible is software. The billing, claims and management systems they have in place often can help providers respond to audits in many ways. Without a doubt, information technology has become a central asset in providers’ audit response strategies.

Software doesn’t help providers avoid audits, but it does help them prepare for, respond to and weather an audit. HME software gives providers access to the data houses all documentation electronically which inherently makes responding to audits much easier for HME providers. When audited the provider is made aware of what documentation it needs to provide auditors to demonstrate a claim’s validity and can use its information technology to quickly find that documentation and send it to auditors. And the software system should help provider ensure that it is doing that

In an HME software system, when an order is taken and claim is started, documentation and the requests to referral partners and other parties for necessary documentation should be generated and tracked and managed through the software’s workflow process.

Document Imaging and Management

A key software tool that can help HME providers quickly retrieve the necessary information is document imaging and management. Document imaging lets employees can quickly scan paper forms in order to update patient records, and update those files easily. Document management lets staff organize, access and share those files. In many cases the two will be referred to together as “document management.” In any case, this remains the pivotal tool in helping providers quickly respond to audits.

With in the proper use of our software, documents are tracked and monitored and imaged, and we are also interfacing with the carriers for proof of delivery, which has also become a critical portion of the audits, as it is another form of documentation to confirm that the patients are being serviced properly.

“We can scan the items in on the patient’s record, so that every thing I need can be printed out,” says Carol Rose, billing coordinator for Holly Springs, N.C. HME provider Dressen Medical Inc. Dressen’s system also lets Rose retrieve all the documents and EOBs for a particular patient, and get a full history of that patient’s claims. And she can add notes, and set follow-up dates to check to ensure that additional documentation has come in so that it can get Medicare for claims or to auditors.

Reporting Tools

Because of the sheer volume of audits that providers go through, they must also find a way to make sense of all their audited claims. So, reporting and monitoring systems that can help them determine factors such as how many claims are in audit, at what step in the process they are at, how many dollars are outstanding, and which audits need to go to appeal is very important, especially when a provider is dealing with high volumes of audited claims.

And these tools let the provider audit itself, as well. According to experts, 95 percent of Medicare audits result from data analysis. The process is called predictive modeling, and is nothing new. It has been used in the financial industry for years to detect fraudulent transactions. So, if the auditing process is automated, why shouldn’t the providers analyze their claims using similar, automated methods? Essentially, these tools can help the provider notice the same red flags that CMS auditors are seeking.

And if a provider detects a situation where it can detect that certain claims it is processing are going to run a higher risk of being audited, then it can adjust for that. In fact, some types of claims that could have a higher audit risk can be very simply addressed through a new process or workflow thanks to this process.

Points to take away:

  • Providers are drowning in a sea of audit requests, and their funding is being held in limbo until they address those audits.
  • Software has become a pivotal tool in how providers handle those audit requests.
  • A key feature of HME software that helps providers respond to audits is document imaging and management tools.
  • Also, reporting lets providers identify trends in their workflows that can help them pinpoint possible audit concerns.

Learn more:

Our recent listing of software audit features that can be found on

This article originally appeared in the June 2012 issue of HME Business.

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