July 2009

President's Message

As a refresher, the seven elements of a model compliance program are as follows:

• Designation of a compliance officer and compliance committee;

• Development of compliance policies and procedures, including standards of conduct;

• Development of open lines of communication;

• Appropriate training and education;

• Internal monitoring and auditing;

• Response to Detected Deficiencies; and

• Enforcement of disciplinary actions.

I am asked frequently, "which is most important element" or "do I really need to complete all elements." My responses include that I don't think you can say that one element is always most important and certainly "yes" you need to address each element or you are opening your organization up for increased risk. Having said this, I must comment that a very important element for all of your compliance efforts is

always your ability to do accomplish auditing in an effective and efficient manner. In order to achieve this goal it is important to have an audit plan for RAC.

RAC and Your Audit Plan

In today's challenging financial and economic climate, the vast majority of hospitals and health systems' compliance and audit departments are faced with trying to do more with less fewer resources. The ongoing challenges and burdens of running an effective compliance program with the normal expected and planned for everyday risks of accurate billing/documentation/coding, conflict of interest, HIPAA, physician contracts, Stark, vendor relationships, hotline calls, etc... is now extended to deal with the impending RACs. How do you deal with this increased burden? One suggestion is to immediately (if you have not already) put pen to paper (or keystrokes to computer) and develop your audit needs relating to RAC as well as your required resource budget to accomplish this task.

Developing Your Audit Plan

How do you develop your audit plan? My first suggestion would be to perform a brief internal and external review of the subject matter. The external review is pretty simple. The RACs are coming and we know from the recently completed Demonstration Project that the majority of overpayments identified (- somewhere between 70% - 75% depending upon which statistics you review) -were from coding errors and lack of documentation to support medical necessity. Thus it would be logical to focus your attention

and resources on these areas.

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