Conducting a CDM Audit
the National Correct Coding Initiative. Therefore, it is not uncommon for multiple audits to be occurring simultaneously.
Ultimately, once the goal, scope, and frequency of an audit have
been determined, the audit can be designed by allocating the
necessary staff, space, equipment, and supply resources to actually conduct the audit.
The process begins with
agreement on the audit’s
goals, scope, and frequency.
Steps to Conducting an Audit
There are a series of steps that should be followed in sequence
to ensure that an audit actually yields favorable results. The figure on page 29 offers a complete flow chart for internal audits;
the initial steps are described in the following sections.
Stakeholder Agreement
First, the CDM stakeholders should meet to reach alignment
(agreement) on the goal(s), scope, and frequency of the planned
audit and to coordinate the audit effort. The stakeholders are
persons who have a vested interest in the outcome of the audit.
They are typically persons with management responsibilities
over functional areas involved and can be regarded as subject
matter experts in their respective areas of responsibility. At a
minimum, the following stakeholders should participate:
x Compliance officer or representative: The organization’s
compliance officer should spearhead the CDM audit ef-
fort, with the overarching goal of assuring accuracy and
consistency to support compliance and the revenue cycle.
He or she participates as needed to remove barriers, foster
communication, and provide leadership and direction.
x Finance department representative: This person typi-
cally coordinates the audit effort, schedules stakeholder
meetings, conducts the actual audit, reports audit find-
ings, makes the corrections in the CDM, and handles
post-audit communications and follow-ups.
x HIM representative: This individual is a CPT/HCPCS
coding subject matter expert who helps determine which
CPT/HCPCS codes will be hard-coded into the CDM and
which will be soft-coded or assigned by coders in the HIM
department. The HIM representative also reaches align-
ment with the clinicians on the best CPT/HCPCS code to
be assigned to a given procedure or service.
x Clinicians and ancillary department heads: These peo-
ple are clinical procedure and service subject matter ex-
perts. They work with the HIM representative to confirm
that the proposed CPT/HCPCS code for a given service
matches the description of the actual services rendered.
Staff in the clinical departments also enter orders and
post charges to patient accounts during or shortly after
the patient visit. Accuracy at the charge posting level is a
critical point in the revenue cycle.
x Business office and business services representative:
An expert on reimbursement and payer guidelines, this
individual has access to the latest payer guidelines, has
detailed information on past and recent claims denials,
and also has detailed information on allowable data with-
in certain fields in the CDM.
x Contracts department representative: This person is a
managed care contracts subject matter expert. He or she
has access to all relevant managed care contracts, which
detail certain contract-specific pricing and CPT/HCPCS
coding requirements.
x IT representatives (larger environments): IT staff who
directly support computer applications that link to the
CDM (for example, order-entry applications, supplies and
materials management applications, and surgery applica-
tions) should also be involved. If the CDM can be regarded
as the hub of a wheel, then the various linked applications
are the spokes.
x Decision support staff (larger environments): These indi-
viduals perform report writing and data mining. In addi-
tion, they may perform data sorts of the entire CDM com-
puter file or certain fields within it and also may compile
audit reports.
Appoint Audit Team
After these subject matter experts have determined the goal(s),
scope, and frequency of the audit, the second step is to appoint
members of the audit team who will conduct the actual audit.
Audit team members must have the requisite skills and knowledge to validate CDM data, so they must be selected carefully.
Team members may be the stakeholders themselves or their
designees. In either case, the audit team must be aware of and
accountable for the goal(s), scope, and frequency of the audit.
Regarding the amount of staff, there is no one formula to set
staffing levels for auditing; each organization needs to determine what amount of auditing staff is reasonable.
Larger environments may employ a staff of one or more internal auditors whose job it is to conduct CDM audits. This staff is
budgeted for and their work is financially supported as a part
of the organization’s compliance plan. Smaller organizations
may not have a formal internal auditing department or staff but
must still conduct periodic CDM audits to support compliance.
Adequate funds for CDM auditing should be budgeted in every
annual budget cycle.
Secure Space, Equipment, and References
The third step is to secure adequate space and equipment. The
fourth step is to gather the latest source and reference materials
to support the audit as follows:
x Compliance resources from the Department of Health
and Human Services (HHS) Office of the Inspector Gen-
eral (OIG) Fiscal Year Work Plan
x Facility-specific compliance plan
x National Correct Coding Initiative
x Coding sources and references, including ICD-9-CM vol-
umes 1–3, Healthcare Common Procedure Coding System
levels 1 and 2, Hospital Outpatient Prospective Payment
