‘Crafting Effective Compliance Plans’ Series: Setting Pass Rate Thresholds & Creating Action Plan Items Based on Audit Findings

‘Crafting Effective Compliance Plans’ Series: Setting Pass Rate Thresholds & Creating Action Plan Items Based on Audit Findings

Compliance auditing is a cornerstone of maintaining high standards in healthcare, ensuring that providers adhere to regulatory guidelines and deliver optimal care. However, the real value of these audits lies not just in identifying areas of improvement but in how physician groups respond to these findings. Creating effective action plans based on post-audit results is crucial for fostering continuous improvement and maintaining compliance.

When dealing with provider-entered charges, the strategies and thresholds set in the compliance plan take on added significance due to the direct involvement of providers in the billing process. This approach necessitates a heightened focus on accuracy and consistency in documentation, as errors at this stage can directly impact revenue integrity and compliance outcomes. Tailoring action plans to address the specific challenges associated with provider-entered charges, such as potential variations in coding practices and the need for continuous education, ensures that the compliance program remains robust and responsive to the unique risks inherent in this billing method.

Let’s take a look at the process of developing tailored action plans for providers following audit results. By understanding the implications of different pass rate thresholds and implementing strategic responses, physician groups can enhance their compliance programs and support their providers in delivering high-quality care.

The Importance of Tailored Action Plans

Audit pass rates serve as critical benchmarks for evaluating provider performance and identifying areas that require improvement. However, pass rates alone are insufficient without corresponding action plans that address the findings and guide providers toward better compliance. Tailored action plans are essential for translating audit results into meaningful improvements and fostering a culture of accountability and continuous learning.

Understanding Pass Rate Benchmarks

Before crafting action plans, it’s essential to set clear pass rate thresholds that align with your organization’s compliance objectives. Pass rate thresholds can vary based on the maturity of the compliance program and the complexity of the services provided. Newer compliance programs may require lower thresholds to start, then work their way up as the program matures. The same can be said for more complex services and coding encounters.

The landscape of compliance auditing is multifaceted, with pass rate thresholds serving as crucial benchmarks for evaluating program effectiveness. According to the 2023 Annual Compliance & Auditing Benchmark Report, 27 percent of respondents admit to lacking a defined pass rate threshold, while 26 percent advocate for a threshold ranging between 91-95 percent.

Elizabeth Kelly, Director, Audit Services at YES HIM Consulting, sheds further light on the regulatory backdrop, emphasizing the significance of aligning pass rate thresholds with Centers for Medicare & Medicaid Services (CMS) guidelines. CMS delineates a payment error rate measure, stipulating a 95 percent confidence level in claims processing. However, Kelly underscores the distinction between payment error rates and code accuracy, elucidating the intricacies involved in audit scoring methodologies.

Furthermore, insights from the American Health Information Management Association (AHIMA) underscore the temporal evolution of coding accuracy standards. While ICD-9-CM historically adhered to a 95 percent accuracy threshold over 36 years, the advent of ICD-10-CM necessitates a reevaluation of pass rate benchmarks. Kelly advocates for adaptable pass rate thresholds commensurate with industry transitions, echoing the sentiment that progress towards 100 percent accuracy is incremental and iterative.

A pivotal aspect influencing pass rate thresholds is the size of audit samples employed by physician groups. As highlighted in an article by Physicians Practice, the correlation between sample size and pass rates unveils intriguing insights. For instance, audits comprising 10 charts often yield baseline pass rates of 80 percent, while more extensive samples of 20 charts elevate pass rates to 85 percent, particularly in mature compliance programs.

Establishing Pass Rate Thresholds for Your Facility

Let’s illustrate how pass rate thresholds can necessitate different actions with an example compliance plan. Please note: These benchmarks only apply to facilities that utilize provider-entered charges in their billing process. There are different guidelines and thresholds for practices that employ separate coding departments for their billing needs.

95-100% Pass Rate: Indicates strong compliance and accuracy.

Action Plan:

• Providers achieving this threshold will be scheduled for annual re-audits.
• The physician group plans to recognize these providers with a small incentive bonus and a certificate of compliance excellence to motivate continued adherence.
• Additionally, the physician group organizes a quarterly compliance best practices seminar where these high-performing providers share their insights and strategies with peers.

90-94% Pass Rate: Reflects minor discrepancies that need addressing.

Action Plan:

• Providers scoring in this range will receive targeted post-audit education sessions within 30 days.
• These sessions focus on the specific errors identified in the audits, such as documentation practices or coding inaccuracies.
• The physician group schedules a follow-up audit within six months to ensure improvements are being implemented.
• Providers are also encouraged to participate in a mentorship program where they can receive guidance from colleagues who achieved a 95-100% pass rate.

80-89% Pass Rate: Highlights more significant areas of concern.

Action Plan:

• Providers in this range will undergo intensive post-audit education, including one-on-one training sessions with compliance specialists.
• The physician group mandates a re-audit within 90 days to assess progress and identify any persistent issues.
• Providers will be required to attend bi-monthly compliance workshops until their next re-audit.

Below 80% Pass Rate: Signals substantial compliance issues.

Action Plan:

• Providers scoring below 80% require immediate and comprehensive post-audit education.
• The physician group schedules re-audits within 30 days to ensure that corrective actions are promptly taken.
• The physician group introduces a 100% prebill review process for these providers, meaning all their claims will be reviewed before submission to payers to prevent further compliance issues.
• Persistent low scores trigger a more stringent oversight process, which may include additional administrative supervision and potentially reducing their patient load until compliance improves.
• The physician group also arranges for these providers to work closely with a compliance coach who can provide ongoing support and feedback.

Continuous Monitoring Ensures Success

The effectiveness of action plans hinges on their implementation and continuous monitoring. Here are steps to ensure successful execution:

• Communicate Clearly: Ensure providers understand the purpose of the action plans and their role in the process. Clear communication fosters buy-in and accountability.
• Track Progress: Use metrics and benchmarks to track improvements over time. Review audit results regularly and adjust action plans as needed to address emerging issues.
• Provide Support: Offer ongoing support and resources to providers. This can include access to compliance experts, updated guidelines, and continuous education opportunities.
• Celebrate Successes: Recognize and reward providers who achieve compliance targets or demonstrate significant improvement. Celebrating successes reinforces positive behavior and motivates others.

Driving Quality Improvement through Action Plans

Crafting targeted action plans in response to post-audit findings is crucial for sustaining compliance and elevating the quality of care within physician groups. By establishing precise pass rate thresholds, designing customized action plans, and rigorously monitoring progress, organizations can cultivate a culture of ongoing improvement and accountability. These strategic efforts not only enhance patient outcomes but also mitigate compliance risks and strengthen the overall resilience of the healthcare system.

Additional Compliance Guidance for Physician Groups:

• ‘Crafting Effective Compliance Plans for Physician Groups’ Series: An Introduction to Provider Charge Entry Compliance
• ‘Crafting Effective Compliance Plans for Physician Groups’ Series: OIG Compliance Plan Guidance

This article marks the third installment in our ongoing series, “Crafting Effective Compliance Plans for Physician Groups.” Stay tuned for future articles that will delve deeper into specific compliance areas and best practices for physicians.