The Audit Crisis: Post-Payment Reviews Rise as Staffing Levels Fall

Medicare post-payment audits are estimated to have increased by more than 900% over the past five years.

Let’s talk about post-payment audits – or, more specifically, Collections Audit Contractor (RAC) audits, Supplemental Documentation Requests (ADR), Medicare Administrative Contractor (MAC) audits, Area Program Integrity Contractor (ZPIC), etc. what you call it, a post-payment audit is an afterthought. So, as a health care provider, you have been paid and now you are under the very real threat of having that money taken back.

The first step in the process is to receive a letter from a payer – something commonly referred to as an ADR which requires a certain number of days to respond, usually 45. Now we know that if you choose not to respond to this letter, the proceeds of the procedure or procedures in question can be recovered. Moreover, by not responding, a presumption of guilt is made by the payer, which can lead to numerous requests for documentation for similar procedures. It is therefore imperative that the health care provider responds.

Although there are many different shapes and sizes of health care providers, we will have to be generalists today. So who manages these post-payment audits at a given supplier?

Someone (or a team of people) within a revenue cycle management department responds. In the current environment, the number of people caring for it is shrinking as budget cuts have been instituted.

The I-Med Claims blog recently stated that “Efforts to reduce hospital workforces during the pandemic have forced revenue cycle teams to redeploy existing staff into new areas. One of the consequences of this change is that there is no appropriate expertise to master the complex and constantly changing payment standards. In numerous conversations, we learned of a reduction in staffing in revenue cycle management (RCM) departments ranging from 15 to 70 percent.

Simply put, there are fewer people to deal with these often complex audits.

This is equally troubling when combined with the fact that post-payment audits are on the rise. According to an article in Medicare Audits, they estimate that post-payment audits have increased by more than 900% in the last five years. And it’s no wonder, because compliance and audit departments have said that for every $2 a payer invests in post-payment activity, they get a return of $17. That’s an 850% return on investment, folks.

So with the increased activity in these audits and fewer people responding to them, what tools are healthcare providers using to combat these audits? The answer is surprising: Excel spreadsheets. Revenue Intelligence estimates that over 31% of hospital systems use Excel to manage these audits. Ben Reigle, a 20-year veteran of the RCM and founder of the RCM Leaders Forum, said from his experience that number was actually “much higher”.

Finally, and perhaps most importantly, without a real system to manage post-payment audits, there is also a lack of reporting capabilities. This is inconvenient for senior management, for reporting purposes. Additionally, it is much more difficult, if not impossible, to address process inefficiencies when working in Excel spreadsheets.

In summary, to quote Melissa Powell, COO of Genesis Healthcare, “While improvements in technology can lead to better clinical outcomes, it is only part of the equation. Their impact is also felt operationally, and given the challenges ahead, it can make all the difference in the world. Well said, Mrs. Powell!

Note on programming: Listen to Kevin Lasser on Talk Ten Tuesdays.

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