3 Ways to Build an Effective Hospital Compliance Program

As the healthcare industry becomes more value-based and consumer-centric, strengthening hospital compliance programs to ensure accurate coding, complete clinical documentation, and clean claims is essential.

Identifying coding, documentation, and claims management processes that may be posing a risk to the organization’s revenue or patient safety efforts is critical to thriving in an evolving healthcare landscape.

Estimates show that gross charges denied by payers have grown to 15 to 20 percent of all claims submitted, according to data cited by the public accounting and business advisory firm Eide Bailly. Claim denials are putting millions of dollars at risk for the average hospital, and those figures could grow as public and private payers tie reimbursement to more complex payment models.

New regulations and policies are also making it harder for hospitals and health systems to get paid. Eighty-eight percent of physicians in a recent survey conducted by the American Medical Association (AMA), for example, reported that prior authorizations have increased in the last five years, and 28 percent reported that the requirements led to a serious adverse event.

Hospital compliance programs can support efforts to reduce claim denials, manage changing payer requirements, and, ultimately, optimize claims management. Compliance programs implement the necessary checks and balances within a hospital or health system to ensure proper claims management, explains Amanda Hyer, chief product owner at 3M.

“It gives an opportunity for a facility to not only check on quality of the coding as well as the documentation that's being captured, but it also allows the facility to discover if there happens to be any risk areas that may not have been prevalent before,” says the compliance expert with over 15 years of experience with coding, auditing, and clinical validation and claims reimbursement review. “That due diligence of quality review also brings forward where there might be or may have been some of those hidden risk areas.”

Building a hospital compliance program that gets ahead of denials and ensures quality coding and documentation hinges on three components: communication, education, and technology.

Communication is key

Coding and clinical documentation are not the only teams responsible for hospital compliance. Every employee at a hospital or health system has a role to play.

Here's an example. Coding teams are responsible for ensuring patient records and claims contain a complete and accurate list of clinical and billing codes. And documentation specialists are accountable for verifying that all the information needed to demonstrate medical necessity and other documentation requirements is present and in the correct format. But department heads and frontline providers are also liable for what is finalized in a patient's record and the subsequent claim for the encounter.

Therefore, hospital compliance programs need to have open, clear communication lines from revenue cycle management to clinical departments in order to identify risk areas and correct processes and workflows if needed.

“Communication is key,” Hyer says. “Knowing who your stakeholders are in the review process and having a structured work plan that helps to direct where your focus is going to be for your audit reviews are key.”

Hospital compliance leaders may face challenges with getting all stakeholders on board with compliance. Leaders may have to shift the culture to stress the importance of compliance, but establishing routine meeting opportunities to identify risk areas and develop solutions can help earn that buy-in and open communication, Hyer states.

Hospitals can also use webinars and written communications to keep compliance at the top of priority lists, she says.

Educating providers to effect change

While communication is critical to identifying risk areas and securing buy-in for a hospital compliance program, providing feedback through education is just as important, Hyer stresses.

“You need to have a feedback mechanism in place that allows you to act and educate so that you can get those preventive measures installed and then monitor for those measures,” she says.

Hospital compliance programs should prioritize education for medical coders and clinical documentation specialists. These are the team members who are reviewing patient charts and documentation, assigning diagnosis and procedure codes, and generating queriers to get to the specificity and quality of documentation needed for accurate, timely reimbursement, Hyer explains.

But education efforts should also focus on department heads and providers.

“If you find that you have an issue in your cardiac cath area, then you should direct those audit results and disseminate those findings back down to the group that really needs it. Who is capturing the documentation? Who is reporting those services? Are queries being answered appropriately? Education is a trickle effect,” she stresses.

Champions can also boost education and communication efforts. Hospitals and health systems need a champion to support any changes stemming from audit reviews, Hyer says.

“If it happens to be that you need better documentation from physicians, then you need physician champions,” she advises. “If it's through the department level with your department heads or [clinical documentation improvement] CDI or coding, then you need to make sure that the managers are on board so that you can create those support networks for education.”

Technology is the future of compliance

The healthcare industry relies on technology to diagnosis patients, predict the risk of developing chronic diseases, and even perform surgeries. But on the administrative side, healthcare is still primarily manual.

Despite progress with automating key business processes, providers could still save $14.64 per patient encounter by requiring processes like prior authorization, claim submission, reimbursement, and other processes to be done using a fully electronic workflow, the most recent CAQH Index shows.

In a world where hospitals and health systems must do more with less, providers realize that technology is the future of healthcare administration, and that will significantly impact hospital compliance, Hyer says.

“We're going to start relying more on technology,” she explains. “We're going to want that technology to help us flush out and bring forward those risk areas faster than what the human eye can do.”

Artificial intelligence and machine learning will be major technology areas in the compliance space, she adds. The technologies will be able to “review claims data, reconcile it with what we get back from the payers, and help us bring forward where those trends are that we currently don't always see unless we're actually pulling data and analyzing and manipulating it using the human touch,” she says.

Hospital compliance programs are becoming increasingly important as hospitals and health systems face more requirements and more complex payment arrangements. Communication and education are essential to effective programs, but the future lies with technology.