Post on 11-Oct-2020
transcript
Arnett Carbis Tootham ‐ HFMA Accounting & Auditing Update 2018
1/26/2018
178
Analyzing and improvingoperaTional processes
Arnett Carbis Tootham ‐ HFMA Accounting & Auditing Update 2018
1/26/2018
179
Overview
Overview of Internal AuditReview of 2017 Protiviti SurveyHealth Care Internal AuditUse of Data AnalyticsInternal Audit TransformationQuestions
179
Arnett Carbis Tootham ‐ HFMA Accounting & Auditing Update 2018
1/26/2018
180
180
Arnett Carbis Tootham ‐ HFMA Accounting & Auditing Update 2018
1/26/2018
181
181
Arnett Carbis Tootham ‐ HFMA Accounting & Auditing Update 2018
1/26/2018
182
“Internal auditing is an independent, objective assurance andconsulting activity designed to add value and improve anorganization’s operations. It helps an organization accomplishits objectives by bringing a systematic, disciplined approachto evaluate and improve the effectiveness of risk management,control and governance processes”
‐ The Institute of Internal Auditors
182
Arnett Carbis Tootham ‐ HFMA Accounting & Auditing Update 2018
1/26/2018
183
WhaT's Included in InTernalAudiT
183
Arnett Carbis Tootham ‐ HFMA Accounting & Auditing Update 2018
1/26/2018
184
Keys To an EffecTive InTernalAudiT FuncTion
Organization’s leaders must: Be open to discussing tough issues Seize opportunities to make changes for
improvementInternal auditors must have: Independent reporting line to the highest governing
body Authority to access all areas of the organization Support if and when their views differ from those of
management
184
Arnett Carbis Tootham ‐ HFMA Accounting & Auditing Update 2018
1/26/2018
185
What Internal Audit Brings to the Table
Ensures that the organization is held accountableAdds value by providing assurance, insight, and objectivitySaves substantial amounts of moneyProtects public reputation of organization by identifying: Operating inefficiencies Wasteful spending Employee theft Fraud Cases of noncompliance with laws or regulations
185
Arnett Carbis Tootham ‐ HFMA Accounting & Auditing Update 2018
1/26/2018
186
InTernal AudiT ResponsibiliTiesOffer Insight and AdviceEvaluate RisksAssess ControlsEnsure AccuracyImprove OperationsReview Processes and ProceduresMonitor ComplianceAssure SafeguardsInvestigate FraudCommunicate Results
186
Arnett Carbis Tootham ‐ HFMA Accounting & Auditing Update 2018
1/26/2018
187
InTernal vs ExTernal AudiTors
187
Arnett Carbis Tootham ‐ HFMA Accounting & Auditing Update 2018
1/26/2018
188
Top AudiT Plan PrioriTies
188
2017 2016Information System Controls Billing and collections
Billing and collections Accounting/financeAccounting/finance Information security/cybersecurity program
effectiveness
Information security/cybersecurity program effectiveness
Compliance and regulatory monitoring
Charge capture Information System ControlsElectronic health records Ancillary servicesCompliance and regulatory monitoring
Fraud, waste, and abuse
Ancillary services Accounts payableAccounts payable Compliance investigations, corporate integrity
agreements, regulatory audits, inspections, and sanctions
Data/information governance Charge captureHIPAA compliance HIPAA complianceFraud, waste, and abuse Human resources, employee screening, and payrollClinical systems Capital projects and construction
Supply chain Data/information governanceDenial management Business continuity and disaster recovery
Arnett Carbis Tootham ‐ HFMA Accounting & Auditing Update 2018
1/26/2018
189
Top AudiT Plan PrioriTies -CAEs
2017 2016Charge capture Billing and collections
Billing and collections Accounting/financeAccounting/finance Ancillary servicesInformation System Controls Charge captureInformation security/cybersecurity program effectiveness
Fraud, waste, and abuse
Data/information governance Information System ControlsElectronic health records Supply chainDenial management Cash applications/postingsClinical systems Clinical systemsCash applications/postings Information security/cybersecurity program
effectiveness
Supply chain Business continuity and disaster recovery
Vendor risk management Data/information governanceAncillary services Third-party contracts and business associate
agreements
Fraud, waste, and abuse Patient accounting systemsPatient access Accounts payable
189
Arnett Carbis Tootham ‐ HFMA Accounting & Auditing Update 2018
1/26/2018
190
HealTh care InTernal AudiT
Overview: Industry continues to see high volume of changes
New risks & complicated regulatory requirements
Reform continues to change the way everyone does business.
Risks must be effectively evaluated, now more than ever.
Important to identify, prioritize, and evaluate risks that impact your organization.
190
Arnett Carbis Tootham ‐ HFMA Accounting & Auditing Update 2018
1/26/2018
191
HealTh care InTernal AudiTRisk Assessment: Must understand the goals, objectives, processes, and
governance structure of your organization. Identify all areas in your system that could be audited
and the presence of risks in those areas. Choose smaller number of risks that are easy to quantify
and relevant for the industry and your health system. Assessment of the inherent risks and internal control
structure is performed; results in a uniform risk rating applied across the health system.
Must move departments into the future, do not continue old methods/trends.
191
Arnett Carbis Tootham ‐ HFMA Accounting & Auditing Update 2018
1/26/2018
192
Use of DaTa AnalyTics
192
Arnett Carbis Tootham ‐ HFMA Accounting & Auditing Update 2018
1/26/2018
193
DaTa AnalyTics InTernal AudiTData Management Issues: Coordinating w/corporate information
technology function Identifying where data resides Capturing needed data elementsOther People/Process Challenges: Heavy audit plan workloads Budgets Lack of expertise
193
Arnett Carbis Tootham ‐ HFMA Accounting & Auditing Update 2018
1/26/2018
194
10 DaTa AnalyTics AcTion ITems
1) Recognize demand is growing2) Expand knowledge 3) Understand budget and resource constraints4) Use champions to lead effort5) Expand data access & implement protocols
194
Arnett Carbis Tootham ‐ HFMA Accounting & Auditing Update 2018
1/26/2018
195
10 DaTa AnalyTics AcTion ITems
6) Identify new data sources (internal & external)
7) Increase use and reach of data‐based continuous auditing & monitoring
8) Develop real‐time snapshots or risks & incorporate results
9) Increase level of input stakeholders10) Implement steps to measure success
195
Arnett Carbis Tootham ‐ HFMA Accounting & Auditing Update 2018
1/26/2018
196
InTernal AudiT TransformaTion
Historically, internal audit departments focused on periodic and past events, and audited by financial statement categories. Example – Accounts Payable Transaction Testing
Select sampleVerify that amount paid matched invoiceVerify that transaction was properly approvedVerify that amount paid was properly expensed
If transaction met all criteria, the test passed. If the transaction failed to meet the criteria, the
transaction failed.Determine if this was an isolated incidentDetermine if this was a systemic problem
196
Arnett Carbis Tootham ‐ HFMA Accounting & Auditing Update 2018
1/26/2018
197
InTernal AudiT TransformaTion
Example – Petty CashDetermine cash locations throughout companyVerify that cash on hand matched general ledgerVerify that vouchers were available for variancesIf so, were they used appropriatelySecure access to cash
If transaction met all criteria, the test passed. If the transaction failed to meet the criteria, the
transaction failed.Determine if this was an isolated incidentDetermine if this was a systemic problem
197
Arnett Carbis Tootham ‐ HFMA Accounting & Auditing Update 2018
1/26/2018
198
InTernal AudiT TransformaTion
Potential Weaknesses and/or Inefficiencies in AP Testing: Large population from which to choose Sample consists of various cost centers Sample consists of various managers with approval
authority Variances may not be a good reflection of reality.
1 variance out of 25 looks like an isolated instance.Unless further testing is from same cost center & same manager, the variance may be passed. This may bury a potential problem underneath the larger sample population and company.
These tests are always looking in the past!198
Arnett Carbis Tootham ‐ HFMA Accounting & Auditing Update 2018
1/26/2018
199
InTernal AudiT TransformaTion
Potential Weaknesses and/or Inefficiencies in Petty Cash Testing: Is petty cash material to the organization? Sample consists of various cost centers located in
different geographies?How much do we spend in reimbursement for mileage to complete a petty cash audit?Are variances indicative of fraud or error?
Again, these audits are looking at prior transactions!
199
Arnett Carbis Tootham ‐ HFMA Accounting & Auditing Update 2018
1/26/2018
200
InTernal AudiT TransformaTionTo Be Effective:
Internal Audit needs to be looking backwards and forward.Internal Audit needs to focus on risks to the organization and audit those with the greatest risk.Internal Audit needs to look for ways to improve efficiencies and help streamline processes to promote cost savings.Internal Audit needs to align itself with the organization and be meaningful to its customers.
Board of Trustees Executive Management Senior Management Directors, Managers, and Supervisors Front line workers
200
Arnett Carbis Tootham ‐ HFMA Accounting & Auditing Update 2018
1/26/2018
201
InTernal AudiT TransformaTion
Our Journey:
2008 – 2013 – Internal Audit Department was reintroduced. Focus was Financial
CashInventoryFixed AssetsInvestmentsPost Implementation Reviews
Some ComplianceChart ReviewsMedical Necessity for DME (durable medical equipment)Medical Necessity for Ambulance Billing
201
Arnett Carbis Tootham ‐ HFMA Accounting & Auditing Update 2018
1/26/2018
202
InTernal AudiT TransformaTion
Our Journey:
2013 – 2014 – Internal Audit Department transformation was presented and approved by Audit and Compliance Committee. Focus was Financial, Compliance & Operational
Audit by Location/DepartmentAudits were selected based upon auditor risk perceptions & around Epic TrainingAudits included: Critical Access Hospitals Physician Practices Physician Contracts
202
Arnett Carbis Tootham ‐ HFMA Accounting & Auditing Update 2018
1/26/2018
203
InTernal AudiT TransformaTion
Our Journey:
2016 – 2017 – Internal Audit Department transformation continued to evolve. Focus remained Financial, Compliance & Operational
Continued to audit by Location/DepartmentAudits were selected based upon auditor & management risk perceptions.
Audits included:CredentialingHeart and VascularSurgical ServicesEmergency DepartmentTAVR
Physician ContractsLaboratoryUrgent Care Centers
203
Arnett Carbis Tootham ‐ HFMA Accounting & Auditing Update 2018
1/26/2018
204
InTernal AudiT TransformaTion
Our Journey:
2018 – Internal Audit Department adds Post Implementation Reviews of New Service Lines and Continuous Monitoring Projects. Seeks to become more of a consultant prior to implementation. Focus remains Financial, Compliance & Operational
Will continue to audit by Location/Department.Audits selected based upon auditor & management risk perceptions & Management/Director requests.
Audits will include:Cancer CenterLeased Practice ArrangementsNew Cath Lab
Joint VenturesContinuous MonitoringAPC Contracts
204
Arnett Carbis Tootham ‐ HFMA Accounting & Auditing Update 2018
1/26/2018
205
InTernal AudiT TransformaTion
Value Added Observations: Specimen Flow in OR Heart & Vascular and Cath Lab TAVR Documentation Epidural Charges Physician Contract Management Documentation and Billing 340B Drug Pricing
205
Arnett Carbis Tootham ‐ HFMA Accounting & Auditing Update 2018
1/26/2018
206
Jack H. LynnArnett Carbis Toothman LLPManager – Health Care Servicesvoice: 724.658.1565 e‐mail: jack.lynn@actcpas.com
Adam T. McKenery, MBA, CIAValley Health SystemDirector Internal Auditvoice: 540.536.2014e‐mail: amckener@valleyhealthlink.com
QUESTIONS?
206
Arnett Carbis Tootham ‐ HFMA Accounting & Auditing Update 2018
1/26/2018
207
LUNCH
HERE COMES TO FOOD… DOO DOO DOO DOOAND I SAY, “LET’S EAT LUNCH.”
207