Revenue Integrity in the Era of Heightened Regulatory Scrutiny

Updated on January 15, 2022

By Vasilios Nassiopoulos 

The healthcare industry continues to see an uptick in oversight of federal healthcare payments. In late 2019, HHS’s Office of the Inspector General (OIG) reported that Medicare made $54.4 million in improper payments to acute care hospitals due to incorrectly coded claims. It also recommended that CMS direct its contractors to recover the lost money.  

Enter 2020 and the introduction of COVID-19 incentive payments, and today’s C-Suite can expect a continuation of this trajectory in terms of increased scrutiny. In fact, the OIG recently announced its audit plans related to hospital payments covering COVID-19 discharges under the Coronavirus Aid, Relief, and Economic Security (CARES) Act.  

The current climate has many in the industry concerned: A recent survey of healthcare CFOs and revenue cycle leaders suggests that there is considerable confusion over coding and claim requirements. In terms of challenges to revenue cycle, increased workloads related to COVID-19 claims was named as one of the top issues, second only to erratic and unpredictable claim volumes. 

Amid heightened regulatory scrutiny, there is increased urgency for healthcare organizations to get their revenue integrity and billing compliance house in order. At a time when negative impacts to the bottom-line are significant, hospitals and health systems must ensure they are capturing all monies owed in a timely and compliant fashion. 

Embracing the shift from revenue cycle to revenue integrity 

Forward-thinking revenue integrity models build on existing revenue cycle processes to identify new revenue opportunities and avoid claim denials. These models require a proactive, data-driven approach to claims auditing and review that drives efficient recognition of issues, produces actionable insights and fosters better collaboration between billing, coding and compliance professionals.  

The best strategies integrate systems and processes through strong partnerships between revenue integrity teams and billing compliance. While these two functions have traditionally operated in siloes, shared monitoring and auditing processes can streamline budgets, improve compliance and ensure optimal revenue recoupment. 

Improved collaboration can lay the groundwork for a comprehensive revenue integrity strategy that builds on the strengths of both prospective and retrospective auditing. Prospective audits take place prior to claim submission and focus on reviewing specific, targeted cases—such as COVID-19 claims.  The goal of this strategy is to submit a clean, error-free claim that will pass the OIG audit test. In contrast, retrospective auditing involves claim reviews post-submission and post-adjudication. Retrospective audits give revenue integrity teams the time needed to conduct a deep dive into underlying problems or high-risk areas.  

When effectively combined, these two methods promote better compliance from the outset and inform process improvement initiatives. For example, healthcare organizations should be continuously monitoring denied COVID-19 claims retrospectively to make quick pivots that avoid future errors. In tandem, prospective audits—while typically only covering a percentage of bills—ensure that a larger share of “high-risk” claims are submitted in compliance with payer requirements.  

Advancing Technology-Enabled Revenue Integrity Processes 

Revenue integrity and billing compliance functions that optimize reimbursement are data hungry initiatives. Unless a healthcare organization has unlimited staff resources in their billing and compliance departments, manual processes for combing through claims data will not provide the timely insights needed to get ahead of compliance concerns.  

The good news is that automation and AI tools like machine learning, natural language search (NLS) are dramatically improving the outlook. Solutions exist now that can extract insights from claims in near real-time and detect anomalies, fueling new and expanded insights to advance process improvement initiatives. And, not surprisingly, the value proposition of these tools is growing rapidly amid COVID-19 as healthcare organizations try to maximize reimbursements against notable challenges such as revenue shortfalls and rapidly changing regulations. For one large pediatric health system in the Southwest, use of a risk-intelligent auditing solution powered by AI to manage $8 million in COVID-19 related charges and coding and compliance issues resulted in $230 million in reduced denials and a financial impact of $2.3 million.  

The time to act is now. A study commissioned by the American Hospital Association (AHA) found that the median hospital margin overall was just 3.5% pre-pandemic, and projected margins will stay in the red for at least half of the nation’s hospitals for the remainder of 2020. And updated Medicare billing requirements for incentive payments that require a positive COVID-19 laboratory test promise to only exacerbate the revenue challenge.  

Healthcare organizations that make the shift from a simple revenue cycle management process to a broader technology-enabled revenue integrity strategy will be best positioned to keep reimbursement dollars when regulatory auditors come knocking.  

Vasilios Nassiopoulos is the Vice President of Platform Strategy and Innovation for Hayes.

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The Editorial Team at Healthcare Business Today is made up of skilled healthcare writers and experts, led by our managing editor, Daniel Casciato, who has over 25 years of experience in healthcare writing. Since 1998, we have produced compelling and informative content for numerous publications, establishing ourselves as a trusted resource for health and wellness information. We offer readers access to fresh health, medicine, science, and technology developments and the latest in patient news, emphasizing how these developments affect our lives.