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Include UB-92 as Well as Chargemaster for Accurate, Effective APC Audits

Regular audits of your outpatient claims and billing processes are essential not just for consistent and adequate reimbursement but to ensure compliance. However, an accurate audit goes far beyond a chargemaster review. It requires a close examination of billing practices and medical records to reveal weak and problem areas that must be addressed. "Many hospitals think updating their chargemasters is good enough," says Carol Groves, RN, Vienna, Va.-based senior manager of Arthur Andersen Healthcare Consulting for the southeast region. "But, when they take a closer look, their accounts receivable and unbilled accounts receivable have started to climb."

Auditing outpatient claims is different from an inpatient diagnosis-related group (DRG) audit, notes Peggy Wolf, a director of 3M HIS Consulting Services based in Atlanta. "Under APCs so much of coding is tied into charges," she says. "That's because the charges are added in so many departments in the outpatient setting. One part is based on the chargemaster; the rest comes from the health information management (HIM) department. Reviewing the HIM coding is pretty much like a DRG audit, except it includes both the procedure and the diagnosis." Wolf explains that the chargemaster is a different issue, because it could contain coding or charge errors or a process problem that would present an inaccurate picture of charges. 
 
"It's a common misconception that hospitals are coding APCs, but actually they are using HCPCS codes," according to John Turner, MD, FACEP, medical director for coding and documentation at TeamHealth Inc. in Knoxville, Tenn. "If your chargemaster is incorrect, you will not map correctly to the HCPCS codes necessary for reimbursement under APCs. So the initial focus of the audit should be on the HCPCS codes, not the resultant APCs." Medicare uses a grouper software that assigns APCs based on Centers for Medicare and Medicaid Services (CMS, formerly HCFA) diagnosis and procedure codes. The software also applies prescribed edits and calculates reimbursement. Both Wolf and Groves back Turner's comment. "Often hospitals think they have to code up to the APCs, but the software groups the HCPCS codes into APCs," Groves says. 
 
When Should You Conduct an APC Audit?
 
A perceived problem, such as many edits or errors, many rejected or denied claims or slower cash flow, can trigger an audit. However, both Groves and Wolf advise hospitals to audit regularly. Groves recommends a monthly audit, at least for three to six months, and then every three months after that. "You need to make sure that the audit results in action and that corrections are properly made," she said. Wolf suggests hospitals conduct APC [...]

- Published on 2001-07-01