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April 2015

Take the Pain Out of Revenue Cycle Audits
By Sondra Akrin and Grant Crossman
For The Record
Vol. 27 No. 4 P. 6

Root canal. Homework. Restructuring. All terms that tend to inspire fear and loathing just by their mere mention. Innocuous on their own, they've taken on a negative connotation because we associate them with unpleasant experiences.

Here's another word to add to this list: audit. Whether because of the Internal Revenue Service's reputation or the perceived threat of an accounting audit, enough negativity swirls around the term to make even the most stouthearted tremble when it's uttered. Because of the strictly regulated nature of health care, audits to verify compliance and provide oversight in the areas of billing, government mandates, and daily operations are an integral part of professional life.

Despite the perception, auditing doesn't have to strike fear into the hearts of everyone in the organization. With appropriate explanation, proper training, and positive execution, the audit process can be converted into valuable opportunities for improvement.

One area where auditing has become prominent is within the concept of revenue cycle optimization. As the health care industry continues to grapple with massive upheaval and shrinking margins, there's been a sharpened focus on the revenue cycle. Ensuring the financial viability of health care organizations requires that the revenue cycle is operating efficiently. One way to make that happen is through in-depth, effective auditing, making it crucial to minimize its negative aura.

Selling the Audit
While Shakespeare wrote that a rose by any other name would smell as sweet, some health care professionals may say an audit by any other name still sounds painful. However, that's not necessarily the case. Words can invoke powerful emotions—simply referencing the idea of an audit can undermine an effort before it even gets started. Avoiding the term altogether and framing the activity as a review, checkup, or assessment can help. It may sound cosmetic, but never underestimate the impact labels can have on staff attitudes.

Many staff members fear audits because they assume they're the result of something going wrong. To combat this interpretation, put staff at ease by comparing the activity to something familiar. Explain that the audit is more like an annual checkup than major surgery. Similar to a routine physical, vital signs will be checked and tests may be taken. When the examination is complete, a treatment plan will be outlined based on the results. Follow the plan to improve overall health whether on an individual basis or for the entire organization. Explaining to staff members that it's a routine "health check" makes them more likely to understand there are no ulterior motives behind the audit.

To further relieve trepidation, clearly define the audit type and its objective. There are many kinds of audits, including those with a revenue cycle focus, health care organizations must undertake on a regular basis.

Explain to staff that revenue cycle audits encompass a wide range of activities such as authorizations and referrals, insurance verification and assignment, charging, coding, claims submission, accounts receivable follow-up, write-offs, payments and adjustments, and customer service. Demonstrating that the revenue cycle impacts nearly every aspect of the operation helps convey the audit function's importance.

While a key aspect of any audit is to uncover issues that may be resulting in lost revenue, positive outcomes also should be detailed. Stress that audits recognize departments that are meeting and exceeding expectations and highlight best practices to be shared throughout the organization to increase overall improvement. The audit also identifies staff pain points and potential ways to alleviate the problems.

Finally, explain that improving the revenue cycle operation enhances the entire organization's financial viability and ultimately leads to better job security.

Prepping for the Audit
Communicate clearly to help alleviate audit-related stress. Be open and honest about what to expect. Give staff members the opportunity to ask questions and express their concerns in both an open forum and private discussions. Be up front about their involvement and emphasize the importance of their role. Empower them by letting them know this is an opportunity to improve workflow, output, quality, and job satisfaction.

Audits can make staff members nervous, mostly because they're afraid of what they don't know. Eliminate this fear of the unfamiliar by conducting audits on a regular basis. Developing an internal process for auditing gets staff used to the activity and makes the process feel like a normal part of business operations. Then, when a formal audit is scheduled, a comfort level will have been established.

Training is another key aspect of helping staff prepare for an audit. Additional training based on the results of internal audits gives staff greater confidence to perform their daily job functions. Staff members fully trained on processes and system uses are more relaxed and effective when faced with a formal audit.

Presenting the Results
As stressful as the audit itself can be, staff members often fear the aftermath even more. As is the case with all aspects of the audit process, the key to eliminating that concern comes in the presentation.

Always start with the positives. Counteract every negative finding with good news and frame poor results as opportunities for growth and development. Have a suggested plan already in place to remedy any missteps and solicit staff feedback about moving forward.

Take a page out of the book of management guru Ken Blanchard, whose philosophy is to "catch people doing things right." While corrective action plans for any nonconformance found during the audit must be developed, it's just as important to highlight areas where staff is excelling. This type of positive reinforcement builds a culture of encouragement and provides an important counterweight to negative findings.

After presenting the results, consider developing plans that include rewards for consistent compliance and incentives for improving areas that may be deficient. Rewards can be as simple as department lunches or small token awards. The point is to acknowledge high performance while striving for continuous improvement.

It's a good idea to create healthy competition between departments by posting monthly quotas, production results, and the best "below" error rates, all of which is information that can be collected from regular internal audits.

In summary, let's return to Shakespeare, whose Hamlet said, "There is nothing either good or bad, but thinking makes it so." The sentiment holds true even for revenue cycle audits: They are neither good nor bad, but instead are framed by people's attitudes.

If organizations present audits in a positive light at every stage, staff members are more likely to view them favorably. Once audits are accepted for what they are—valuable opportunities to improve—not only has the pain been eliminated but also the organization has set itself on a course toward revenue cycle optimization.

— Sondra Akrin is director of revenue cycle transformation at Hayes Management Consulting.

— Grant Crossman is a senior health care consultant at Hayes Management Consulting.