By Jonathan S. Batchelor

September 22, 2000 --

If the Office of the U.S. Inspector General (OIG) knocks on your door requesting a compliance audit, should you head for the border?

According to Judy Dye, vice president of professional and ancillary services at the University of Arizona Medical Center in Tucson, AZ, an OIG audit is not that scary -- and can ultimately improve the way a facility is run. Until now most compliance scrutiny has been focused on lab work, she said, but radiology practice is due to come onto the OIG's radar screen soon.

Dye offered an insider's tips on surviving an outpatient compliance audit in a talk at the American Healthcare Radiology Administrators conference in Nashville last month. University Medical Center is the only university hospital in Arizona, and has a significant Medicare population in the Tucson area, she said, so it was only a matter of time before the OIG came calling. When they do, Dye suggests a cooperative, rather than adversarial, approach.

"The (U.S.) government is one of your best payors. It behooves you not to overbill your best payor ... You want to work with the government," she said.

According to Dye's conversations with Department of Justice (DOJ) attorneys, there are four factors that can result in a compliance audit:

  • Outdated outpatient-coding protocols.

  • A weak training program or outdated reference materials for regulatory and billing issues.

  • An information system with unknown limitations that could lead to false claims being filed.

  • Ever-changing third-party payor rules that make it almost impossible to keep current.

Procedures have changed since the early 1990s, she said. The OIG and DOJ want to work cooperatively with institutions, and can actually be helpful in getting through the process. But an audit still requires a lot of time and work on the part of the institution, and sometimes a great deal of money as well.

For instance, as of July 14, GAMBRO Healthcare of Lakewood, CO, agreed to pay $53 million as a settlement for billing violations. If institutions work cooperatively with the government to resolve false claims violations, penalties can often be reduced by about 50%, she said.

Team efforts

An institution's survival success is directly proportional to the wisdom of its audit strategy, Dye said. If a demand letter from the DOJ arrives requesting a compliance audit, the institution should first contact its legal department and give it a copy of the letter. The next step is to contact the U.S. attorney and request details about the items being investigated. Generally, the demand letter does not contain specific billing issues that launched the investigation.

The next step is to put together a government inspection response team (GIRT) made up of the chief executive officer, chief operating officer, chief financial officer, the controller, and the appropriate vice president, Dye said. The director of the department under investigation, the medical record director, the compliance officer, and legal counsel should also be part of the team.

The idea is to build a team large enough to handle issues that may arise from the audit, but not so large as to create panic among the staff. The team will need to meet daily throughout the audit, Dye said.

The team’s first item of business will be to stop the destruction of any records that may occur as a result of the institution's record-purge policies. Then a decision needs to be made regarding the audit methodology. The DOJ offers three options for institutions facing compliance auditing. The OIG can perform the audit for the institution, the OIG can perform the audit with the institution's assistance, or the institution can perform the audit internally.

Dye strongly recommended an internal review, with the results brought to the legal department as quickly as possible. This protects the document as privileged communication between client and counsel. The internal review document needs to be written as plainly as possible in order to compensate for some readers' lack of knowledge about the medical procedures and practices in question, she said.

A little prevention

Dye said every institution should create and distribute a checklist of what to do in the event of a government inspection, including some of the following:

  • Contact the facility’s compliance officers and counsel immediately, providing relevant information.

  • Refer the inspector to the facility spokesperson (either the compliance officer or legal counsel).

  • Take the inspector/inspection team to a designated room in the facility, preferably one with a copier.

  • Obtain a copy of the search warrant or subpoena and note the places authorized to be searched.
  • Monitor the search team closely, yet without interfering. The monitoring team should be comprised of counsel, the compliance officer, and personnel from risk management.

  • Advise employees to answer any question they are asked truthfully. Be helpful but do not volunteer information unless directed to do so by counsel. Counsel should be present during any employee interviews and should consider recording the entire conversation.

  • Make sure you can contact employees after work hours; they may know the location of keys to unlock doors or cabinets that would otherwise be forced open.

  • Copy all documents that are to be removed and request an itemized receipt of all documents and seized items.

  • Urge employees not to discuss the search warrant, subpoena, and related matters with anyone other than the spokesperson. Media inquiries should also be directed to the spokesperson.

  • After the search, contact all employees involved in the search and ask them to share any relevant observations regarding what was taken, where the search was conducted, and so on. They can provide relevant clues the monitoring team might miss.

A lot of cure

The most important thing is to avoid blaming anyone for the results of the audit. Why not? The discrepancies are systemic and need to be addressed at that level, Dye said. These include written policies and procedures, training and education of staff, internal audits and monitoring, and certification and reporting of billing processes and protocols.

When all's said and done, the audit can have a positive effect on an institution.

"The audit allowed us to put protocols into place that are just common good practice," Dye said.

By Jonathan S. Batchelor
AuntMinnie.com staff writer
September 22, 2000

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