Post on 05-May-2022
Palomar Health
Board Audit and Compliance Committee
Agenda
Thursday, September 20, 2012 456 E. Grand Avenue 5:15 – 7:15 P.M. Conference Room — 1st floor Escondido, CA 92025
Call to Order
Public Comments
Item
Presenter Page Mins
1.
2.
3.
4.
5.
6.
7.
8.
9.
* Meeting Minutes – June 21, 2012 Compliance and Ethics Committee Reports (standing item for September) Compliance Program Overview (standing item for July) Compliance Program Assessment (standing item for July) Report of District Audit Officer’s and Compliance Officer’s Independence (standing item for July)
Conflict of Interest survey (standing item for July)
Review of Internal Audit Activities (standing item for August)
Date/Time/Location of Next Meeting – October 18, 2012 Final Adjournment
N. Bassett
M. Neu
M. Neu
M. Neu
M. Neu
M. Neu/T. Boyle
T. Boyle
N. Bassett
N. Bassett
5
10
20
10
5
10
20
5
5
*NOTE: Asterisks indicate anticipated action; action is not limited to those designated items.
“In observance of the ADA, Americans with Disabilities Act, please notify us at (858) 675-5230, forty-eight hours prior to meeting so that we may provide reasonable accommodations”.
Nancy Bassett, R.N, Chairman Michael Covert, CEO
Richard Engel, M.D.
Ted Kleiter, Director Janine Sarti, General Counsel Lachlan Macleay, M.D.
Bruce Krider, Director Bob Hemker, CFO Roger Acheatel, M.D.
Linda Greer, R.N., Director (Alternate) Tom Boyle, District Audit Officer Hue, Le, Admin Fellow
June 21, 2012 Audit and Compliance Board Meeting Minutes
Palomar Pomerado Health AUDIT & COMPLIANCE
BOARD COMMITTEE MEETING 456 E. Grand Ave.
1st Floor Conference Room June 21, 2012
AGENDA ITEM/ PRESENTER
DISCUSSION CONCLUSIONS/ACTION
CALL TO ORDER 5:30 P.M. by Director Bassett. Present: Nancy Bassett, Bruce Krider, and Ted Kleiter. Also attending: Lachlan Macleay, Tim Nguyen, Stephanie Love, Tom Boyle, Mark Neu, Michael Covert, Mark Kawauchi, Cecile Galvez, and Lucy Maxwell.
NOTICE OF MEETING Notice of Meeting was posted consistent with legal requirements.
PUBLIC COMMENTS There were no members of the public present.
APPROVAL OF MINUTES
April 19, 2012
MOTION: by Director Bassett, 2nd by Director Kleiter and carried to approve the minutes of April 19, 2012 as submitted. All in favor. None opposed.
ENTERPRISE RISK MANAGEMENT
Tom Boyle provided background information about Enterprise Risk Management (ERM) and indicated the reasons of having Deloitte personnel talking about it at this meeting. Cecile Galvez from Deloitte delivered a power point presentation focused on ERM, which enables a coordinated and actionable dialogue on the key risks for Palomar Health, the benefits of the process, the internal
June 21, 2012 Audit and Compliance Board Meeting Minutes
AGENDA ITEM/ PRESENTER
DISCUSSION CONCLUSIONS/ACTION
and external drivers, an overview of the framework, key process steps, risk identification, risk prioritization and assessment, risk response and ownership, and risk reporting and monitoring. Tom Boyle asked Deloitte about the top 5 risks in the Healthcare industry. Cecile Galvez indicated as follows:
Regulations and impact in the organization. i.e. ICD-10, Meaningful use, etc.
Security and protected Health Information.
Revenue Cycle, charges, clinical documentation.
Physician relationship.
Coding. Nancy Bassett indicated that Palomar Health is currently focused on Compliance and ERM might be the next topic to be considered.
AUDIT PLAN
Mark Kawauchi from Deloitte presented information about the Deloitte’s audit approach, areas of audit focus, planned procedures, fees, audit timing, and communication process for the review of the Palomar Health’s financial statements for fiscal year 2012. This review will also include a testing of prior year’s consolidation of Arch Health Partners’ financial statements. An audit is also being performed at the Palomar Health Foundation, which is covering FY 2011 and 2012.
REVIEW OF INTERNAL AUDIT ACTIVITIES
Tom Boyle presented a status report of internal audit projects, which included financial, information technology, and construction audits, and also operational support activities for the department. Additionally, Mr. Boyle delivered the results of the latest
June 21, 2012 Audit and Compliance Board Meeting Minutes
AGENDA ITEM/ PRESENTER
DISCUSSION CONCLUSIONS/ACTION
customer satisfaction survey performed for his department during the Spring of 2012.
INTERNAL AUDIT SERVICES FINANCIAL AND INFORMATION TECHNOLOGY AUDITS
Obtained Management Response to the Cost Reporting Audit. 10 out of 10 observations accepted by Management.
Assisted External Auditors Deloitte during the planning of the Information Technology Audit as part of the review of Financial Statements for FY2012.
Performed Payroll and Human Resources Audit by using a traditional approach.
Currently performing testing and analysis of the Payroll activities by using an automated approach with the ACL analysis tool.
INTERNAL AUDIT SERVICES OPERATIONAL SUPPORT
Porting over of AuditExchange to the new virtual server.
Ongoing verification of non-use of excluded entities at Palomar Health, for Compliance.
Ongoing POM ICU census trends to Chief Medical Quality Officer.
Ongoing support of Finance’s unclaimed refund process.
Ongoing support of Case Management’s Medicare daily patient census and discharges.
Ongoing support of Accounts Payable CCM’s.
Developing application(s) to monitor charge capture and billing for Revenue Cycle process.
Development of a new ACL data repository.
Learning optimal uses of the new ACL-AX system.
INTERNAL AUDIT CONSTRUCTION AUDIT PLAN 2012
Provided status of the construction audit as of June 1, 2012, identifying the different reviews performed and the corresponding status (Planning, as planned, priority, and
June 21, 2012 Audit and Compliance Board Meeting Minutes
AGENDA ITEM/ PRESENTER
DISCUSSION CONCLUSIONS/ACTION
critical).
REVIEW OF INTERNAL CUSTOMER SATISFACTION SURVEY (Q6) FOR AUDIT
Tom Boyle presented a comparison of the results of the customer satisfaction survey performed both in April and October 2012. The survey illustrated the departments receiving services from IAS as of September 2012. The participating departments provided feedback on:
Attitude.
Communication.
Timeliness.
Accuracy.
Effectiveness.
COMPLIANCE AND ETHICS COMMITTEE REPORTS
Mark Neu presented a status update regarding the last meeting sustained by the Compliance and Ethics committee, in which the following topics were addressed:
Revenue Cycle.
False Claims Reporting Policy.
Work Plan Initiatives 2012.
Roundtable Discussion.
Mark Neu indicated that follow up needs to be performed for some of the topics above and a new update will be provided at the next Compliance and Ethics committee meeting.
REVIEW OF INTERNAL CUSTOMER SATISFACTION SURVEY (Q6) FOR COMPLIANCE
Mark Neu presented a comparison of the results of the customer satisfaction survey performed both in April and October 2012. The survey illustrated the departments receiving services from the Compliance department as of September 2012. The participating departments provided feedback on:
June 21, 2012 Audit and Compliance Board Meeting Minutes
AGENDA ITEM/ PRESENTER
DISCUSSION CONCLUSIONS/ACTION
Attitude.
Communication.
Timeliness.
Accuracy.
Effectiveness. Mark Neu recognized all the great work performed by Tom Boyle and Janine Sarti, who were acting on the compliance responsibilities before Mark Neu came on board to Palomar Health.
DATE/TIME & LOCATION OF NEXT MEETING
The next meeting of the Internal Audit and Compliance Committee is scheduled to be held on Thursday, July 19,
2012 at 5:15 p.m. in the 1st Floor Conference Room At 456 E. Grand Conference Room.
ADJOURNMENT The meeting was adjourned at 6:48 P.M. Director Bassett moved to adjourn.
SIGNATURES
Committee Chairperson
Secretary to
Committee
________________________ [Nancy Bassett, R.N., M.B.A.] ________________________ [Ruhina Livingstone / Lucy Maxwell]
Palomar Health
Compliance and Ethics Committee Activity Report
September 6, 2012
Compliance Program Overview – Presentation and discussion regarding the Seven Elements of an
Effective compliance program. The 7 elements are 1) written standards, 2) a Compliance Officer, 3)
Education and Training, 4) a hotline, 5) response system to allegations that includes appropriate
disciplinary actions, 6) audits and monitoring to reduce problems, and 7) investigation and
remediation of problems and the non-employment of sanction individuals. The District has all of
these elements.
Compliance Program Assessment – Discussion continued his discussion regarding how the District is
compliant when is delivers healthcare that is medically necessary, meets professionally recognized
standards, is charged and billed correctly, provided without financial incentives, promotes patient’s
rights, and is provided by qualified caregivers in and approved facility.
Revenue Cycle Report – The report was created for the Utilization Review Committee by Melissa
Wallace, Manager of Revenue Cycle Analytics. The report is a “big picture” so staff and physicians
would become accustomed to using the same dashboard. Speaks to Observation cases, as well as to
Medicare RAC denials, both Medical and Surgical. #3: Credit balances are also another problem on
which there should be a drill-down. Addition compliance-related dashboard elements will be added
from appropriate departments.
Privacy Report - The Privacy Report was published in the packet but was not discussed due to time
constraints. No significant issues raised.
Work Plan Initiatives 2012 –
o Clinical Resources Management - 1.1a Create a process to improve patients with correct
status designation for minor procedures and observation status. Six elements are being
addressed by way of #1: new position and changed hours for PAL ED from 7am to midnight,
with 10-hour and 8-hour shifts. Also re-designating priorities for POM staff. #2: Education
and training under development for the Code 44 process; training is scheduled for October.
#3: An Observation report is created and distributed to physician’s daily and improved
communication.
o CEC – Billing and Compliance - 0% clean claim rate in January meant that all bills were being
stopped, and billers were looking at 100% of claims before they went out which caused
delayed cash flow. As of July, it had improved to 53%. Also reviewing the top claim edits
by volume and by dollar to determine what can be done in the system before that claim is
created and/or before the patient is discharged to avoid having to do an edit
o Project: Data Security – Encryption - This project was on hiatus prior to the new hospital
opening, as the PC Techs were all working on getting equipment installed and running there,
but it has now been reinvigorated. There are about 250 laptops that are so old they cannot
accept the encryption, but a number of those may not need to be replaced
o Project: Conflict of Interest 2012 - electronic survey out via Survey Monkey in July to
Supervisors and above. 12% of respondents reported a potential conflict, and are in the
process of being reviewed.
o Project: Identify Financial Relationships with Referral Sources - this Work Plan had been
completed with the exception of some need to identify methods for education
o Project: Information Privacy Breach - Privacy Dashboard presented at CEC. This project still
in progress.
o Project: Information Privacy – Faxing - this Work Plan had been completed
o Project: Medically Unnecessary Admissions - This project still in progress.
o Project: Medicare Billing Regulations – New staff position identified to complete this task.
This project still in progress.
o Project: Patient Grievance - This project still in progress.
o Project: Public Contracting Responsibilities - this Work Plan had been completed
o Project: Sepsis - This project still in progress. Exceptional PEPPER data will be reviewed at
CEC as a routine agenda item.
Report to The Palomar Health
Audit and Compliance Committee September 20, 2012
Compliance Overview and Assessment
A comprehensive compliance program should include:
• The development and distribution of written standards of conduct, as well as written policies and procedures that promote the hospital’s commitment to compliance (e.g., by including adherence to compliance as an element in evaluating managers and employees) and that address specific areas of potential fraud, such as claims development and submission processes, code gaming, and financial relationships with physicians and other health care professionals;
A comprehensive compliance program should include:
• The designation of a chief compliance officer and other appropriate bodies, e.g., a corporate compliance committee, charged with the responsibility of operating and monitoring the compliance program;
A comprehensive compliance program should include:
• The development and implementation of regular, effective education and training programs for all affected employees;
A comprehensive compliance program should include:
• The maintenance of a process, such as a hotline, to receive complaints, and the adoption of procedures to protect the anonymity of complainants and to protect whistleblowers from retaliation;
A comprehensive compliance program should include:
• The development of a system to respond to allegations of improper/ illegal activities and the enforcement of appropriate disciplinary action against employees who have violated internal compliance policies, applicable statutes, regulations or Federal health care program requirements;
A comprehensive compliance program should include:
• The use of audits and/or other evaluation techniques to monitor compliance and assist in the reduction of identified problem area;
A comprehensive compliance program should include:
• The investigation and remediation of identified systemic problems and the development of policies addressing the non-employment or retention of sanctioned individuals.
Health Care is Compliant when it:
Is Medically Necessary and Meets Quality Standards
• Inpatient - Interqual
• Outpatient – Advance Beneficiary Notice (ABN) screening
• Does care meet professionally recognized standards? i.e. Falls, Retained Foreign Objects, wrong site surgery, etc.
Health Care is Compliant when it: Is Documented, Charged, Billed and Reimbursed correctly • Palmetto’s Local Coverage Determination (LCDs)
and the National Coverage Determination (NCDs) • Does the documentation support the charges? • Credit balances returned within 60 days (Reverse
false claim) • Medicare as Secondary Payor? • Coding accuracy • Cost report accuracy • Billing accuracy – internal and contracted
Health Care is Compliant when it:
Is provided without Financial Incentives
• Stark – “Everything in writing, nothing for free”
• Non-Monetary Compensation log ($373)
• Fair Market Value (FMV)
• Anti-Kickback Statute (AKS) – “Quid pro quo”
• Patient Inducement prohibition ($10/$50)
• Patient gift tracking (Service Recovery?)
• Local / Courtesy transportation
Health Care is Compliant when it:
Promotes Patient Rights
• Privacy
• EMTALA
• Restraints
• Grievances
Health Care is Compliant when it:
Is provided by Qualified Caregivers in an Approved Facility • Excluded parties screening – OIG and GSA’s Excluded Parties List
System, Medi-Cal’s Suspended and Ineligible Provider List (S & I List) • Criminal background screens • Appropriate privileging • Clinical staff licensing • Licensed appropriately? • Do the services listed on the license match the services being
provided and billed? • Do the beds/bed types on the license match the actual use? • Does the address on the license match the physical location?
Conclusion
• Structure in place
• Continue to foster a culture of collaboration
• Next steps
– Dashboards / short lists to CEC
– Contemporaneous compliance review
– Targets and milestones
Report to The Palomar Health
Audit and Compliance Committee September 20, 2012
Annual Conflicts of Interest review
Conflicts of Interest
• Free items and gifts can create an unconscious sense of reciprocal obligation
• “Annually each employee of PPH with the position of supervisor or above will complete and return to the CEO or his designee a conflict of interest disclosure form. Contractors will complete this same form prior to beginning their work for PPH. Any individual completing this form will have an on-going duty to provide further disclosure to the CEO or his designee in a timely way if the information reported changes.”
• Eight questions via electronic survey
• 263 Supervisors and above
Question One
• Ownership in or representation of an entity that does or would like to do business with PPH , Medicare, Medicaid, Title V (Maternal and Child Health Services Block Grant) or Title XX (Grants to States for Aid to the Blind)
QuestionTwo
• Ownership in or representation of an entity supplying goods or services to any competitor of PPH:
Question Three
• Ownership in or representation of, or employment by, any insurer, health plan, insurance agency or brokerage firm.
Question Four
• Ownership in any mortgage, deed of trust, note or other obligation provided, obtained, or secured by PPH:
Question Five
• Arrangement with PPH to purchase goods, services (excluding personal health services), or assets:
Question Six
• Leases, contracts, loans, or other agreements with PPH:
Question Seven
• Officer, director, manager or other responsible position with any vendor or competitor of PPH:
Question Eight
• During the current fiscal year (July 1, 2011 to present) I have accepted the following gifts, hospitality and/ or entertainment from companies that do or may want to do business with PPH (list each gift or instance of entertainment and its approximate value, including gifts, hospitality and entertainment received on behalf of individuals that report to you):
Conclusion
• 88% of respondents denied any potential conflicts of interest
• 12% of respondents submitted appropriate disclosures
• Next steps
– Additional COI education in annual training
– Development of FAQ
– Completion in Xpand
Report to
The Palomar Health
Audit and Compliance Committee
September 20, 2012
2
Audit Activity Impact
1 Construction Audit – PMC West and other Master Facility Plan projects Financial
2 Revenue Cycle Activities (CDI, CDM, Coding, Collections) Financial
3 Payroll - Continue to develop and maintain Continuous Control Monitoring (CCM) system
Financial
4 Accounts Payable - Continue to develop and maintain CCM system Financial
5 General Ledger - Develop and maintain CCM system Compliance
6 Compliance - Continue to administer Hot Line and maintain CCM system OIG/CMS Compliance
7 Medical Staff Physician Credentialing Quality
8 Information Technology Compliance
9 Develop and Implement Leadership Audit Training (Operational Controls Quality
10 Perform Annual Audit Risk Assessment Quality
11 Coordinate External Quality Review of Internal Audit function and construction audit Quality
12 EMT Expense Reimbursement – Required annually Quality
13 Follow Up to prior audits; (Pharmacy, Cost Report, Information Security, +) Financial
High FINANCIAL Low High COMPLIANCE Low High QUALITY Low
PPH Internal Audit Plan 2012
3
Audit Activity Resource %*
1 Construction Audit – PMC West and other Master Facility Plan projects 25-30
2 Revenue Cycle Activities (CDI, CDM, Coding, Collections) 10-15
3 Payroll - Continue to develop and maintain Continuous Control Monitoring (CCM) system
6-8
4 Accounts Payable - Continue to develop and maintain CCM system 6-8
5 General Ledger - Develop and maintain CCM system 6-8
6 Compliance - Continue to administer Hot Line and maintain CCM system OIG/CMS 8-10
7 Medical Staff Physician Credentialing < 5
8 Information Technology < 5
9 Develop and Implement Leadership Audit Training (Operational Controls 5-10
10 Perform Annual Audit Risk Assessment < 5
11 Coordinate External Quality Review of Internal Audit function and construction audit < 5
12 EMT Expense Reimbursement – Required annually < 5
13 Follow Up to prior audits; (Pharmacy, Cost Report, Information Security, +) < 5
* Estimated allocation of departmental resources based on full staffing
PPH Internal Audit Plan 2012
4
Audit Activity Scope *
1 Construction Audit – PMC West and other Master Facility Plan projects Recurring
2 Revenue Cycle Activities (CDI, CDM, Coding, Collections) New
3 Payroll - Continue to develop and maintain Continuous Control Monitoring (CCM) system
New
4 Accounts Payable - Continue to develop and maintain CCM system Recurring
5 General Ledger - Develop and maintain CCM system Recurring
6 Compliance - Continue to administer Hot Line and maintain CCM system OIG/CMS Recurring
7 Medical Staff Physician Credentialing Carry Over
8 Information Technology Recurring
9 Develop and Implement Leadership Audit Training (Operational Controls New
10 Perform Annual Audit Risk Assessment Recurring
11 Coordinate External Quality Review of Internal Audit function and construction audit New
12 EMT Expense Reimbursement – Required annually Recurring
13 Follow Up to prior audits; (Pharmacy, Cost Report, Information Security, +) New
* Scope includes annually recurring audit activities, continuation of projects in process and new or revised projects.
PPH Internal Audit Plan 2012
Cost Report Pharmacy IT Audit
Continue to administer Hot Line and maintain CCM system OIG/CMS
5
Internal Audit Project as of Sept 13,2012
2012
Construction
Revenue Cycle
Payroll
Continuous
Monitoring
General Ledger/
Cost Reporting
Compliance
Medical Staff
Physician
Credentialing
Information
Technology
Leadership Audit
Training
Risk Assessment
External QAR
External QAR of
Construction Audit
Follow Up
EMT Expense
Reimbursement
* Independent
Contracting
Pharmacy Follow up
Postponed due to resources and priority projects
Payroll HR Audit
This is a schedule audit in the audit plan reviewing the payroll process controls and verifying the authorization of payments and deductions.
Fieldwork is complete; a draft report has been issued to Finance and Human Resources management.
No material findings have been discovered.
Exit meeting with management for the formal delivery of the audit report has been scheduled for 10/19/12.
Pharmacy Follow Up Planning phase for the Follow Up review of the Pharmacy audit performed
in 2010.
Entrance meeting has been scheduled with the Pharmacy management on 9/20/12.
External Quality Assessment Review An internal self assessment was performed and reported during fiscal
year 2012.
Requests for proposals are being sent to several external firms to perform an impede dent review of the internal audit function.
Executive Expense Reimbursement
This is a planned annual review of expense reimbursements to the executive management team expanding the scope to include credit card usage by all corporate cardholders.
Final analysis is being completed.
Acl analytics will be developed to monitor and report exceptions on a recurring basis.
Summary of Operational Support Activities 4 Reporting processes for Patient Financial Services were converted to
ACL for improved efficiency.
A system upgrade was completed which included the migration of data and ACL software to a new virtual server environment and enhanced functionality.
Training/study of changes in server implementation by Microsoft in order to maximize use of AX server.
Continued support of ongoing reports and CCM’s.
Revised format of daily census report for Performance Excellence to accommodate changes resulting from West go-live.
Enhanced ACL scripting methodology.
Evaluation of Audit work paper Technology to replace higher priced c360 currently used.
Modified excluded provider test to comply with OIG data changes.
Construction Audit Activity Critical audit objectives were achieved by completing invoice reviews and
billing reconciliation for PMC West to coincide with the close out schedule for the 4 major trade.
Construction Audit Activity Continued retrospective reviews of trade billings and management of
owners construction insurance program will continue through the fiscal year. (right to audit clause extends to 36 months after project completion.
Planning has commenced with facilities management for updating the scope and priority of current and proposed construction activities.
Palomar Pomerado Health
Internal Audit
Construction Audit Plan 2012
Co
ntr
actu
ally
Req
uir
ed
Peri
od
ic A
ud
its
General Scope and Objectives
Recurring Planned Projects
Berg Electric x Electrical Contractor - Cost Reimbursable with Risk and Incentive based on Target Price. 25%
of Savings between Actual Cost of Work and Target Price
DPR Drywall Construction x Drywall Contractor - GMP with Risk and Incentive. 25% of Savings in GMP
University Mechanical & Eng.
Contractors x
Mechanical & Plumbing Contractor - Cost plus Fee with Risk and Incentive based on Target
Price. 25% of Savings between Actual Cost of Work and Target Price
Planned Projects
Change Order Process Assess the appropriateness and controls in the change order process maintained by the
Construction Manager, DPR.
DPR Site Requirements Cost Reimbursable
DPR - Construction Management Construction Manager - Review compliance to contractual obligations
Co-Architects
Primary Architects - Fee for Service
Medical Equipment Purchasing Process Review
RTKL Contract review for Equipment Procurement Consultant
Owners Construction Ins. Program
(OCIP) Confirm proper accounting for mandatory insurance program for all Trade Contractors
Trade Contractors Various Trade Contractors - Lump Sum Contracts: Review Change Orders
Ramona Clinic Pre-Construction Contract Review
Rehabilitation Hospital Pre-Construction Contract Review
Risk Assessment x Continue to evaluate emerging exposures and construction risks
NOTE: This plan is intended to be a dynamic instrument, by which the priorities, scope, objectives, timing, and resources are subject to change based on changing conditions to
include environmental, business operations, and availability of resources. As a result, updates to this plan will be periodically created and distributed as needed. The descriptions of
each project are general in nature, with the specific scope and objectives to be developed as part of each project, usually with the cooperation of subject matter stakeholders.
Tom Boyle
District Audit Officer
Steve Barrett
Senior IT Specialist
Lucy Maxwell
Senior Internal Auditor
Robert Schirripa
Construction Auditor
Chris Udell
Construction Auditor
Ruhina Livingstone
Administrative Assistant
Senior Internal Auditor
Internal Auditor
Eliminated
Tom Boyle
District Audit Officer
Lucy Maxwell
Senior Internal Auditor
Steve Barrett
Senior Audit IT Specialist
Senior Internal Auditor
Internal Auditor
Eliminated to Executive Assistant
for Audit, Compliance and Legal