Are you an outlier?

Monday, May 2, 2011

If, as industry stakeholders suspect, CMS contractors are using denial rates to trigger audits, HME providers need to make sure they know two things, says Michael Sanderson, president of RemitData: 1.) what's their denial rate; and 2.) what's their denial rate compared to other providers? RemitData recently launched a real-time comparative analytics tool that allows providers to do just that. Here's what Sanderson had to say about the importance of providers having this data at their fingertips.

HME News: Why should HME providers be tracking this data?

Michael Sanderson: We work with not just the HME market, but with a lot of specialty markets. So say, for instance, that you're an ophthalmologist who's doing twice the rate of cataract surgeries. You're doing 16% cataract surgeries out of 100 new patients and your peers are doing 8%. When you're above the mark like that, you need to be aware that auditors are watching this data and you need to be doubly sure that your records are documented. In fact, you might want to do spot audits on anything that's triggered above this level.

HME: Do you think most HME providers know their denial rates?

Sanderson: If you're using the latest and greatest software, yes. You need to know your denial rates and you need to know why you're being denied. Maybe your denial rate is low, but you're being denied for bad reasons. If that's the case, auditors are going to pick up on that, too.

HME: How do HME providers know what's a high denial rate?

Sanderson: People in the industry believe it's anywhere from 17% to 22%.

HME: So if I know my denial rate and I know what's a high denial rate, how should I use that information to, ideally, avoid or prepare for audits?

Sanderson: You can set up an alert in your software to say you're out of line with people in your area. Regardless of the tool you use, you need to do it. You need to know if you're an outlier and if you are an outlier, you need to understand what that means.

HME: You mentioned that RemitData works with several specialty markets. How is the audit activity in those markets compared to the HME market?

Sanderson: It's scarier in other markets. The reason is, in large part, because HME providers are reactive. They fill a prescription that the doctor writes. In other markets, it's more proactive. The doctor says this person needs cataract surgery. So the auditors are going to come down harder on those creating the care than those that are delivering it. The HME industry thinks it's on an island, but it's not.