Compliance 360, a leading provider of Software-as-a-Service (SaaS) solutions for enterprise governance, risk management and compliance (eGRC), announced the findings of its “2011 Medical Claims Audits Benchmark Study.” Among the healthcare compliance professionals who participated in the study, 40 percent responded that their compliance program budgets are increasing in 2011, indicating that many are expecting increased regulatory oversight and medical claims audit activities this year.

Last year, healthcare providers continued preparing for CMS’ Medicare Recovery Audit Contractor (RAC) program, which included very aggressive timeframes and a complex appeals process. The passing of the Healthcare Reform legislation introduced yet another layer of complexity to the mix with additional medical claims audit programs to improve Medicare and Medicaid payment accuracy and reduce fraud. With President Obama tasking CMS to reduce improper payments by 50 percent by 2012, healthcare providers are expecting increased audit activity in 2011 and need to plan accordingly.

Compliance 360 surveyed compliance professionals from 342 healthcare organizations to determine how their 2011 compliance program budgets were impacted due to these new initiatives, the level of confidence they had in their compliance solutions and the greatest challenges faced when managing medical claims audits. Study findings included:

- Compliance Program Budgets Trending Upward in 2011- As noted before, 40 percent of respondents indicated that their compliance budgets are increasing in 2011; up 29 percent from the 2010 study. According to a report released by the American Hospital Association, RAC Regions B and C accounted for the most RAC records requests in 2010. This correlates with the findings from the Compliance 360 study, where a greater percentage of study participants in Regions B and C indicated they expected their budgets to increase in 2011 (51 percent and 41 percent, respectively).

- Still a Great Deal of Uncertainty, but Higher Levels of Confidence Among Those Using Software Applications- While 46 percent of respondents indicated they are “Confident” in their current approach to managing medical claims audits, 42 percent said they are “Not Confident” or only “Somewhat Confident.” Of those “Not Confident” or “Somewhat Confident,” 70 percent said they are using internally developed tools or manual processes. Conversely, 69 percent of those “Confident” or “Highly Confident” are using software applications to manage the entire audit process.

- “Holding Everyone Accountable” Greatest Challenge- 50 percent of respondents said the greatest challenge to managing medical claims audits is holding everyone accountable for their part of the process, resulting from the complex processes, aggressive due dates and documentation required. Other challenges included data mining (38 percent), managing proactive self assessments (37 percent) and providing thorough documentation to support appeals (33 percent).

“This year will be another defining one for healthcare providers as they adapt to the mounting pressures of increasingly complex audit demands and deadlines,” said John Brooke, general manager of healthcare, Compliance 360. “Forward-thinking organizations are now seeing the benefits of using claims audit software to automate the management and response to a wide array of medical claims audits – and peace of mind that comes along with it. Claims audit software can create organizational accountability, helping healthcare providers to minimize the risk of forfeiting their legitimate payments from Medicare, Medicaid and commercial payers.”