How to Prepare for an Audit: Part 1

Hello. I am Kathleen D. Schaum and I'm the president of Kathleen D. Schaum and Associates Inc, which is a consulting firm based in Lake Worth, Florida. I provide strategic reimbursement consultation and education for wound and ulcer management professionals, manufacturers, executives, sales professionals, and investors.  

I enjoy helping them understand the business of wound and ulcer management because they receive little or no reimbursement training during their formal education. Instead, they tend to learn about reimbursement by word of mouth, which can be dangerous. I do everything possible to maintain my knowledge about the ever-changing reimbursement landscape to share correct information in my published articles at national, regional, and local symposiums and seminars in webinars and in interviews like today's. To my surprise, I was recently recognized as a world expert for reimbursement health insurance. I had no idea that I'm in the top 0.083% of more than 30,000 worldwide authors and that I ranked number 25 in the world.  

Pre- and post-payment audits, claim denials and repayments are a significant and daunting concern. How can wound care professionals prepare for audits?  

You are correct that wound and ulcer management stakeholders have managed to get on the radar screen of all levels of auditors. I always feel bad when stakeholders’ claims are denied or worse, when they incur large repayments. Audits are not preventable. But denied claims and repayments are preventable.  

Very often in my consulting business, I get called about professionals and facilities having denials and repayments. And I always ask them, “Did you read the documentation that you sent to the auditors?” And most of the time, they say, “No, I didn't review it.” And I'll say, “Well, are you sure that your documentation met all the coding and coverage guidelines and requirements?” And they'll say, “I think so, but I'm not sure what they're looking for.”  

So that's very frustrating to me because that's what puts our professionals and our facilities in harm's way for when they have audits. And you're going to be very surprised when I tell you how to prepare for an audit, and it really is that you're preparing every day. Every day you work, you should be doing everything right so that when an audit comes, it is just a slam dunk and you will pass it.  

A Step-by-Step Guide to Audit Preparation  

So I'm going to give you a few very important things to remember that you should do now and every day to prepare for an audit. So first, you should make a list of all the services, procedures, and products that you perform, that you use, or that you order. Now, when you make that list, include the codes and the code descriptions on the list so that you have a complete picture of the work you perform. Then you need to review the codes that you actually use and verify that you are following the coding rules.  

Now, many times I get a call about the coding rules and what's the right code to use and I will ask the provider “Do you did you get the latest ICD-10 coding book? Did you get the latest CPT book? Did you get the latest HCPCS coding book?” And in almost every case, they'll say no. And I'll say, “Do you have any (coding books)?” and sometimes they do but they'll be very old. And so an investment we should make every single year is to get the updated coding books. You can purchase them either in a book form or an electronic form. I happen to like the book forms because I can write on them and I can keep them. I can earmark them, etc.  

And I have to tell you, recently there's been a lot of new people getting into wound care, particularly in the mobile wound care, and I receive a lot of calls about how to set these businesses up. And the very first thing I say to them is, "Did you buy your code books for this year?" And I have to tell you, so far 100% said, "No, I don't have them." So that is a huge mistake.  

The second thing you need to do after you're coding is you need to research all the coverage policies that pertain to those exact services, procedures, and products that you made a list of. And the very first thing you'll do for coverage is look to see if there aren't any Medicare National Coverage Determinations, such as the ones for hyperbaric oxygen therapy or autologous platelet-rich plasma or other blood-derived products. Many people don't know where to find these and they're very simple because Medicare has a coverage database where you would be able to find all the coverage policies for every code that has a policy. Now keep in mind there is not an NCD for everything we do in wound care—in fact, very few, but the ones that are there are very powerful and very easy to find. You can also find a list of them by going to your Medicare Administrative Contractors website and they will have a link to that.  

So after you have identified which National Coverage Determinations apply to us, that you should print and read them carefully to learn about the covered indications, the utilization guidelines, etc. And while you remember I said print them because you want to highlight them and you also want to make a checklist while you're reading that of everything you need to do, everything you need to think about in your medical decision-making, anything about the guidelines, all things that need to be documented so that you have a checklist of exactly how you can comply with coverage.  

Once you have read them and have your checklist made, then you should print and audit your own medical records of every professional in your organization who performs that service or procedure. What you want to do is determine if everyone is following the coverage guidelines and if their documentation proves compliant. If their documentation is missing any requirements, take the time to improve that documentation. Include any changes that must be made to your electronic health record.  

I can't tell you how many times when I tell people be sure you get your electronic health record refined if it needs refinements to align with the coding and coverage decisions and I'll have many of my providers will say my EHR company won't make the changes. And I have to say, “Well, then you're going to have to write them in. You're going to have to find a place that you can write them into your record.” But my other thing is, well, then fire your electronic record company because they should be making the changes that you need into the template so that you can be compliant with coverage.  

Now, the other thing I want to mention is very often when you're doing those audits, you will find that you're not using the diagnosis codes that are covered by that coverage policy. And so it's really important National Coverage Determinations almost always have a list of the covered diagnosis codes. And you need to be sure that all those ICD-10 codes are in your EHR. One of the things that I find is very fascinating to me is a lot of EHRs list the unspecified ICD-10 codes first on the screen of the list of the diagnosis codes. And many professionals will just select that unspecified code. And when they do, they are then not compliant and don't have the correct code that is covered in the National Coverage Determination.  

So be very, very cautious. It is your job to be sure if the patient has a covered diagnosis that you use the primary and secondary diagnosis codes if required for in your documentation and on your claim form.  

Now also when you're doing that audit, remember they're going to list the covered CPT codes for procedures and services or the covered HCPCS codes for the products. And be sure that your system has all of those codes in it and that you are using them. I have seen recently in some recent audits that were done of the cellular- and tissue-based products for wounds that the providers only placed one HCPCS code for the products into their system and that HCPCS code was for one brand of product. But they used multiple brands, but they reported the code for all the brands. And of course, they got denied upon an audit. And I asked them why they did that. And they said, “Well, I use that code because it's the highest paying code.” That is not correct. We need to use the right CPT code for the right services and procedures, and the right HCPCS codes for the specific products that we use.