Stuart Piltch on Transforming Comprehensive Healthcare Auditing

As the healthcare industry becomes increasingly complex, the depth and types of required auditing also become more complex. Healthcare systems, from both payors to providers, face unique challenges and require more efficient auditing approaches. Innovation in healthcare financial, operational, and clinical auditing will help bring increased accountability to an industry struggling with outdated claims systems and other technology platforms, patient-value transitions, and a flawed “status quo.”

Dealing with outdated claims systems

The healthcare industry has been operating with essentially the same claims systems since at least 2000. The outdated technology leads to inefficiencies, such as:

• Struggles to manage coding, adjudication, and payment processes. This results in errors, delays, and disputes in reimbursement for medical and pharmacy services.
• Inaccurate financial reporting, which affects financial management for healthcare organizations and plan sponsors.
• Ineffective communication between different stakeholders within the healthcare ecosystem. This can lead to miscommunications, misunderstandings, and delays in, and/or poor decision-making.
• Difficulty adapting to industry-wide changes, including evolving regulations, reimbursement models, and medical services.
• Fragmented data management. Systems often cannot integrate and speak to each other, inhibiting data-driven decision-making, care coordination, quality of care performance, and corresponding patient outcomes analyses.

Innovating healthcare auditing

Consultants can play a critical role in facilitating efficient and effective auditing processes. They bring specialized expertise and experience to help healthcare providers navigate this complex undertaking. Traditional audits are limited. They allot only 250 randomly stratified claims. This limitation makes it impossible to determine underlying patterns, which bring to light foundational flaws and issues.

Forward-thinking consultants advise adopting new and innovative auditing approaches to help healthcare organizations deal with outdated systems and mitigate potential difficulties. Leveraging the following solutions may provide benefit:

• Advanced data analytics tools enable auditors to efficiently process vast amounts of healthcare data. These tools can identify patterns, anomalies, and trends within claims and medical records faster than people. By analyzing this data, auditors can uncover potential errors. Advanced data analytics tools can also help auditors prioritize which claims to investigate more thoroughly, making the process more focused and cost-effective.
• Generative machine-based learning models assess and help manage the financial and clinical risks associated with healthcare claims, reimbursement, and related expenses. They enable auditors to make data-driven observations, identify potential areas of concern, and develop financial sustainability as well as compliance strategies.
• Clinical knowledge and expertise ensure auditors can accurately assess the clinical efficacy of healthcare claims and services. This expertise contributes to error identification, clinical standards compliance, care quality assessment, and the promotion of efficient, patient-centered healthcare practices.

While traditional audits are somewhat comprehensive in nature, integrating modern tools and models allows audits to be conducted with greater efficiency, depth, and foresight. They enhance audit comprehensiveness by addressing issues from multiple angles. This multifaceted approach ensures audits are more thorough and better equipped to detect and prevent issues across the healthcare services spectrum.

Unpacking value-based reimbursement

Value-based healthcare models differ sharply from the traditional fee-for-service approach. Under fee-for-service, providers are paid for each service, potentially incentivizing overutilization and driving up costs. In contrast, value-based models are designed to prioritize quality and outcomes, compensating providers based on effectiveness. Payments hinge on metrics like patient satisfaction, reduced readmissions, and adherence to evidence-based guidelines. This shift aligns incentives with enhanced patient health and cost control, fostering efficient, patient-centered care. While fee-for-service emphasizes quantity, value-based models, which are in their infancy, could shift the focus toward care quality and patient wellbeing.

The transition to value-based models adds another layer of intricacy to the auditing landscape. Auditing complexities increase as healthcare systems move away from fee-for-service models. Value-based reimbursement necessitates accurate tracking and accountability, as payments are tied to patient outcomes. Using innovative tools and models provide insights, analyses, and risk assessments to make the change successfully. They enable healthcare organizations to monitor performance, ensure quality of care, predict outcomes, and assess financial implications.

The profit-incentive dynamic

External collaboration and fresh perspectives can drive meaningful improvements in healthcare. Healthcare organizations, however, can sometimes have a short-sighted financial interest, rather than making needed investments that will benefit everyone in the longer term. This includes preserving existing systems and practices, even if they are outdated. Partnering with third-party consultants can help move legacy systems forward thereby prioritizing modernizing practices to improve health system efficiency, rather than adhering to outdated methods.

Building effective Requests for Proposals (RFPs) and contracts

Contracts between healthcare providers or plan sponsors and their vendors or service providers should cover all agreed to expectations, deliverables, and performance standards. These contracts outline the terms, expectations, and responsibilities of both parties, while carrying out audits. It is important for vendor contracts and RFPs to be comprehensive and robust. This includes, but is not limited to, performance guarantees (PGs), service level agreements (SLAs), and corresponding analytics and reporting which monitor progress and shortfalls. This ensures needed transparency throughout the process.

A call for audit accountability and innovation

Healthcare auditing is a complex process requiring innovation, alignment, and accountability, with clear definitions of all terms and conditions. The importance of these foundational principles and practices grows as the market continues to evolve. Providers are currently grappling with outdated systems and shifting reimbursement paradigms. Embracing progressive auditing practices isn’t just an option, but a necessity for sustainable growth and improved patient care.