For more than 10 years, CHAN Healthcare Auditors (CHAN) has relied on ACL data analysis solutions to help its clients assure compliance and maximize revenues. CHAN provides internal audit services to over 20 healthcare systems across the U.S. through a network of over 250 auditors working on-site in client locations. Each organization CHAN serves faces unique internal challenges, but nearly every facility must comply with government regulations and maintain strict controls over internal revenue cycles.

CHAN uses ACL technology to help its clients strengthen the effectiveness of their business controls and minimize revenue leakage.

Customer Profile
CHAN is the only U.S. company focused exclusively on providing internal audit services to the healthcare industry. Formed in 1997 through a collaboration of the two largest tax-exempt healthcare systems, CHAN auditors maintain a permanent on-site presence in over 20 healthcare networks across the nation and operate in more than 325 hospitals and healthcare facilities with combined assets of US $40 billion. Headquartered in St. Louis, Missouri, CHAN employs audit professionals in 36 states.

Applications
CHAN relies on ACL technology for effective, flexible, and powerful data analytics to address a diverse range of healthcare audit processes.

Challenges
CHAN auditors work year-round, on-site, as the “Chief Audit Executives” in their individual healthcare facilities. CHAN auditors must address a variety of internal controls issues, but in particular, respond to the three key areas that challenge almost every healthcare organization: revenue capture, provision for bad debt reserves, and regulatory compliance.

Each hospital department uses a charge capture process that codes and bills patients for procedures, services, medications, and related expenses. If codes are not properly entered or control breakdowns occur in the billing cycle, organizations risk loss of significant revenues.

Facilities also must reserve a calculated percentage of their patient receivables as a provision against bad debts. This is a high-risk process that requires difficult judgments and assumptions based on examination of historical data.

Finally, all healthcare facilities must comply with a wide variety of Medicare legislation, including Sanctioned Provider regulations, transfer and discharge requirements, and other compliance issues related to areas such as one-day hospital stays and same-day readmissions.

Healthcare is heavily regulated at both the state and federal government levels. Facilities also face significant financial pressures to contain costs and reduce reimbursements, while at the same time maintaining the highest degree of patient care.

Solution
CHAN auditors use ACL technology to perform a variety of value-added data analyses at individual facilities. ACL audit analytics software enables the auditors to investigate patient accounts, identify missing charges, and help departments plug leaks in their charge capture process. One hospital identified US $1 million in lost annual charges for cardiac catheterization procedures alone. Another facility used ACL™ to model its contract terms with a managed care provider and to investigate service payments. In a single year, the facility found it had been underpaid by US $625,000. At another hospital, within a matter of hours, CHAN auditors found US $480,000 in missed laboratory charges.

ACL analytics also help healthcare facilities to reserve adequate funds for bad debts. Auditors can track a full year of activity related to patient receivables and perform in-depth analyses on the data, then calculate reserve percentages based on actual experience. ACL eliminates the guesswork, allowing organizations to map trends and strengthen controls over their internal systems and business practices.

Regulatory compliance is another significant and ongoing challenge for CHAN clients. With ACL, facilities can ensure they meet state and federal regulations for a variety of service issues. For example, hospitals participating in the Medicare program are precluded from working with employees, physicians, or vendors that have been sanctioned. CHAN auditors use ACL software to review data and quickly identify any transactions conducted with sanctioned professionals.

Finally, ACL technology enables CHAN staff to continuously refine and adjust their audit review test scripts, encouraging maximum precision and efficiency. “It’s extremely beneficial to be able to share audit scripts and programs so easily,” says Jill Linden, Vice President of Operations for CHAN. “The logs and documentation tools let us conduct remote examinations of the accuracy and assumptions of an auditor’s work, saving us time and increasing the effectiveness of our audit services.”

Results
CHAN Healthcare Auditors rely on ACL technology to help their clients maximize business controls and minimize revenue losses. With ACL, CHAN auditors can:

• Identify millions of dollars in unpaid reimbursements and lost patient charges
• Map service and payment trends, allowing healthcare organizations to reserve adequate funds for bad debts and to negotiate more favorable contract terms with managed care providers
• Analyze data derived from a wide variety of information systems and software applications with ease and efficiency
• Share audit scripts and tools with CHAN personnel working across the country, to continually refine healthcare audit analytic techniques for better audit results and coverage

<< Return to Previous Page