1. 2010 UBO/UBU Conference Health Budgets & Financial Policy 1 Briefing: All You Need to Know About MSA Audits Date: 24 March 2010 Time: 1300 – 1350

2. 2010 UBO/UBU Conference Turning Knowledge Into Action Objectives Determine the accuracy and propriety of financial transactions of MSA in the business office Ensure accounting processes follow generally accepted accounting procedures (GAAP) Determine if effective management controls are in place to ensure compliance with current policies and directives 2

3. 2010 UBO/UBU Conference Turning Knowledge Into Action 3 What Is Reviewed? Periodic program audit reviews and compliance documents Examine billing risk areas Program management (including proper transfer of MSAO responsibilities) Security control Billing and accounting processes Debt management Patient Trust Fund (PTF) Medicare, Medicaid and civilians in an emergency

4. 2010 UBO/UBU Conference Turning Knowledge Into Action Review and Compliance Verify quarterly audits of the business office by a qualified and disinterested individual have been conducted (UBO Manual C2.8.2.1, Nov 06). Results of previous audits should be maintained and readily available in the MSA Office Has resolution occurred for deficiencies noted in past audits? Is there a current Compliance Plan for the business office? (TMA Memo, “Compliance Plan Implementation Policy,” 28 Feb 02) Are unannounced cash counts of the change funds of each cashier and PTF occurring at least monthly by the MSAO? (UBO Manual, C3.7.14, Nov 06) 4

5. 2010 UBO/UBU Conference Turning Knowledge Into Action Billing Risk Areas Use of incorrect rate (e.g., FRR vs. IAR); generally occurs from use of incorrect patient category (PATCAT) Changing any coding for reimbursement purposes – OK to review coding, but if a change is warranted, absolutely MUST be changed by the coder Billing for services without proper documentation in the medical record Billing for services or procedures that do not have an established DoD Comptroller rate Failure to adhere to separation of duties (DFAS 5010.38-R and DoD FMR, V5, Ch1). Failure to maintain exemplary audit trail of all financial transactions Transactions to source codes/sales codes that are not collectible through balance billing (ex: OWCP) 5

6. 2010 UBO/UBU Conference Turning Knowledge Into Action Program Management Are the MSAO and deputy MSAO appointed by written order of the MTF Commander? (UBO Manual C3.2.1 and DoD FMR V5, Ch2, 020602B, Oct 08). Are cashiers appointed by the disbursing agent in writing? (DoD FMR V5, Ch2, 020603C) Are collection agents appointed on written orders acknowledging liability to the US for all public funds under their control? (DoD FMR V5, Ch2, 020702) Is the organizational arrangement (separation of duties of biller, accountant, cashier, etc.) adequate to protect cash receipts? (DoD FMR V4, Ch3, 030305B). Are procedures established for transfer of MSA accountability? ( UBO Manual C3.4) 6

7. 2010 UBO/UBU Conference Turning Knowledge Into Action 7 Program Management (cont’d) Is the MSAO accountable for any other appropriated funds or other Government property? (DoD FMR V5, Ch2, 020303, 020702.) Are standing operating procedures established in writing for the daily operation of the MSA office? Is there a desk-side SOP for each duty/position? Is program guidance (UBO Manual, DoD FMR, DFAS and service-specific regulations) directly accessible to all MSA personnel within the MSA office?

8. 2010 UBO/UBU Conference Turning Knowledge Into Action Security Controls Are adequate security containers (safes, locking drawers*, etc.) available to safeguard MSA funds and documents? *Combination 3 tumbler lock, tool-resistant safe on GSA or Federal Supply Schedule; DoD FMR V5, Ch3, 030304. Are sufficient intrusion detection systems/devices in place? (DoD FMR V5, Ch3, 030303) Are signs posted notifying only authorized personnel may be in the cage area? (DoD FMR V5, Ch3, 030302B.2.d) If a loss of funds occurs, are processes in place to notify the MTF commander and investigate the loss of funds IAW DoD FMR V5, Ch6, 060402? 8

9. 2010 UBO/UBU Conference Turning Knowledge Into Action Billing and Accounting Processes Is any remission or waiver of debt occurring at the MTF level? (DoD FMR V5, Ch28, 281304, 281305, Sep09). Are deposits occurring within the guidelines of 31 USC 3302 and the DoD FMR V5, Ch 5, 050201? Are there any instances of inappropriate/inaccurate postings to patient accounts? Are procedures in place to ensure postings are balanced to amounts collected? Are processes in place to ensure accurate patient categories (PATCATs) are assigned to patients and to ensure accuracy of bills? Is there full accountability of financial records for current accounts? 9

10. 2010 UBO/UBU Conference Turning Knowledge Into Action Billing and Accounting Processes (cont’d) Are there any instances of incorrect billings or inaccurate patient categories resulting in inaccurate bills? Are only MSA personnel providing ECS estimates using the Cosmetic Surgery Estimator? Are all elective cosmetic procedures paid in full prior to the procedure(s) being done? Are debt repayment plans approved only by the MSAO and executed IAW DoD FMR V5, Ch28, 2807? Billings for Secretary Designee patients (if appropriate)? Billing for foreign military, (if appropriate)? 10

11. 2010 UBO/UBU Conference Turning Knowledge Into Action Debt Management Are timely notifications of debt due to the MTF sent to the patient or responsible party at the appropriate intervals IAW DoD FMR, V4-5, various chapters? Are delinquent accounts accurately transferred in a timely manner IAW current service-specific guidance or debt management policy? Are all debt transfers reviewed by more than one person and/or authorized by the appropriate individual? Are collection efforts fully documented to include copies of follow-up letters, records of phone calls and/or personal contacts? 11

12. 2010 UBO/UBU Conference Turning Knowledge Into Action Patient Trust Fund Is the custodian of the PTF on written orders? Are adequate procedures in place for accepting and securing funds and valuables into the PTF after normal duty hours? Is an appropriate Patient Deposit Record completed for each patient, whether or not a deposit is made? Are there adequate procedures established to secure belongings and valuables of the ambulatory procedure patient? 12

13. 2010 UBO/UBU Conference Turning Knowledge Into Action 13 Medicare, Civilians in Emergency (CE) How are non-eligible patients (CE) identified for billing purposes? Are CE patients interviewed for insurance coverage and complete a DD Form 2569? Is the patient asked for other forms of identification (drivers license, employment ID, etc.) and copies of both front and back of the card made? Are Medicare-eligible CE patients billed at the appropriate rate? Are there established procedures for follow-up on status of payment on Medicare claims? Is the Medicare-eligible CE patient being balance-billed for their applicable cost shares (co-pays, deductibles, non-covered services)?

14. 2010 UBO/UBU Conference Turning Knowledge Into Action Summary A well-developed auditing function is the greatest defense that any business has against regulatory infractions 14