What if audits were built like airplanes?


As far as I can tell, the Federal Aviation Administration (FAA) does not have auditors chasing airplanes down runways checking that each plane landed properly. That’s because airplanes are designed, built and maintained with redundant safeguards to ensure safe outcomes. In healthcare however, auditors chase transactions and processes as a matter of course. In spite of this focus on audits, fraud, abuse and gaming the system all still occur with staggering consequences.

What if the Centers for Medicare and Medicaid Services (CMS) channeled that same zeal into making audits as safe as plane travel? What if processes were designed and constructed in such a way as to make audits unnecessary because processes could not crash?

Is this future possible? Should it be our aspiration? Are we trying to make audits faster and cheaper when we should be looking to eliminate them altogether? Yes, yes and yes.

Here’s my three-step program to eliminate audits:

1. Treat Medicare contractors like airplane manufacturers.

Planes are required to be manufactured with multiple levels of redundancy to ensure the safety of passengers in the air and workers on the ground. Manufacturers utilize massive amounts of planning to confirm that their processes to design, test and fly planes are grounded in safety.

While I would not argue that air travel is “inherently safe,” it is the safest mode of transportation currently available. Your odds of being involved in a fatal accident on a plane are about 1 in 4.7 million. In contrast, for 2008 (the most recent year that data is available) you have a 1 in 98 likelihood of dying in a car crash.

How to make this happen: CMS can require a much more rigorous process for Medicare Contractors to “launch” a new process. Process “blueprints” could be much more detailed and closely examined by CMS ahead of the “build.” This will ensure that they produce results and data that will create an inherently safe result for Medicare beneficiaries and the American people who fund the program. Design, test and build of Medicare processes can (and should) receive the same rigor afforded to building airplanes.

It’s all about efficient processes.

2. Create a “black box” for Medicare processes.

Every single piece of data produced by a plane during designing, testing and flying is collected and available for deep analytics. While in flight, flight recorders collect data. Also called “black boxes,” these device are so important that they are designed to survive accidents. They record all inputs and outputs. In the unfortunate instance of a crash, the data can be used to reconstruct what happened and how to make changes to planes or retrain flight crews to avoid similar results under similar circumstances.

How to make this happen: CMS current reporting and audits, by definition, focus on the past and fail to see what is happening today – let alone predict future trends. Alternatively, CMS could require data to be captured and transmitted in “real time.” Think Amazon meets Medicare.

With real-time data, CMS computer and human auditors can pour through information, spotting trends and problems when there’s still enough time to make changes. Unlike airplanes, CMS doesn’t have to wait for a Medicare contractor to crash before they fix the problem. Real-time data works in the commercial sector and can work for government as well.

3. Increase penalties for unsafe pilots.

Current CMS penalties appear tough at first glance, but frankly amount to a light slap on the wrist for these multi-billion contractors. Sure, it is embarrassing for your CEO to get a letter from CMS – while it’s also posted on the CMS web site for the world to see. The public attention is… well, uncomfortable for a period. While this seems to be changing a bit with CMS getting slightly tougher in 2014, much more can and really needs to happen.

How to make this happen: CMS needs to increase the penalties for bad behavior. Squeezing every drop out of our Medicare dollars is one key to Medicare’s long-term financial viability. Here are my recommendations:

  1. For the first offense, CMs charges a fine equivalent to 5 percent of the fees paid to the contractor in the previous 12 months. Stuff happens and you want to be fair.
  2. Second offense, 34 percent of the last year’s fees are immediately due back to the American people.
  3. Third offense, you’re done. In addition to moving your business to another contractor, please send a check for 100 percent of what we have paid you in the last year and don’t call us again for five years.

Too harsh? Are inherently safe audits possible? Is our aim too low? Should we be looking at making audits obsolete?

The technology is out there.

What do you think?

Mike Hurley

Mike Hurley

Mike Hurley is the industry manager for Health Insurance at Hyland, helping health insurance organizations transform business processes that drive value for members, providers and employees. Mike works with current... read more about: Mike Hurley

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