Common embezzlement myths.

With published statistics suggesting that embezzlement strikes three in five doctors at some point in their careers, this topic is of interest to every professional owning a medical or dental office, and tackles some of the biggest areas of misunderstanding concerning embezzlement in professional offices. Many readers will be surprised to learn that many of the steps that are frequently advocated to control embezzlement are, in fact, ineffective. This article suggests an approach that is quite different from what is normally recommended, and yet is far easier to implement than conventional embezzlement-control strategies.

Is the two-midnight rule much ado about nothing?

The Centers for Medicare & Medicaid Services has declared that stays that span two midnights should be presumed to be inpatient stays, but case managers still need to make sure patients meet inpatient criteria and that the documentation is complete. Physicians must certify medical necessity, sign, date, and time the admission, and include a treatment plan and the anticipated length of stay. Physician documentation must be accurate, detailed and give a complete picture of what's going on with the patient or hospitals could face significant payment implications. Medicare auditors still will be scrutinizing the records and are likely to continue to target one-day stays and two-day stays for medical necessity.

Scientific fraud in 20 falsified anesthesia papers : detection using financial auditing methods.

Data from natural sources show counter-intuitive distribution patterns for the leading digits to the left of the decimal point and the digit 1 is observed more frequently than all other numbers. This pattern, which was first described by Newcomb and later confirmed by Benford, is used in financial and tax auditing to detect fraud. Deviations from the pattern indicate possible falsifications. Anesthesiology journals are affected not only by ghostwriting and plagiarism but also by counterfeiting. In the present study 20 publications in anesthesiology known to be falsified by an author were investigated for irregularities with respect to Benford's law using the χ(2)-test and the Z-test. In the 20 retracted publications an average first-digit frequency of 243.1 (standard deviation SD ± 118.2, range: 30-592) and an average second-digit frequency of 132.3 (SD ± 72.2, range: 15-383) were found. The observed distribution of the first and second digits to the left of the decimal point differed significantly (p< 0.01) from the expected distribution described by Benford. Only the observed absolute frequencies for digits 3, 4 and 5 did not differ significantly from the expected values. In an analysis of each paper 17 out of 20 studies differed significantly from the expected value for the first digit and 18 out of 20 studies varied significantly from the expected value of the second digit. Only one paper did not vary significantly from expected values for the digits to the left of the decimal. For comparison, a meta-analysis using complex mathematical procedures was chosen as a control. The analysis showed a first-digit distribution consistent with the Benford distribution. Thus, the method used in the present study seems to be sensitive for detecting fraud. Additional statements of specificity cannot yet be made as this requires further analysis of data that is definitely not falsified. Future studies exploring conformity might help prevent falsified studies from being published.

Pharmacy revenue cycle audits can bring unexpected returns.

An end-to-end pharmacy revenue cycle analysis, led by a multidisciplinary team with broad expertise, can enable a hospital to identify unsuspected errors and oversights that could be causing the organization to lose millions of dollars in revenue annually that it is entitled to receive. If the analysis finds that considerable revenue is being lost, the next step for the team should be to develop a remediation plan to identify the exact cause of each issue and correct it. Following completion of the initial analysis, the hospital should assign permanent accountability and ownership to the team to ensuring the ongoing integrity and accuracy of the pharmacy revenue cycle.

Transplant cost-report tracking at Henry Ford Transplant Institute and other centers nationwide.

CONTEXT: The lack of uniformity in the reporting of direct and indirect costs by organ acquisition cost centers, diagnosis-related groups, and in physician reimbursement often results in Medicare overpayment and findings of unjustified charges in audits conducted by the Office of the Inspector General. Although it is true that organ transplantation costs vary widely, uniform cost-report accounting is needed. OBJECTIVE: Henry Ford Transplant Institute has developed systematic auditing protocols that result in acceptable compliance with Medicare. The differences between those protocols and the methods used elsewhere are illustrated by the results of a national survey of transplant centers. DESIGN: The survey addresses 10 crucial questions, drawn from the cost-reporting model used at Henry Ford Transplant Institute. Setting-Surveys were distributed via the United Network for Organ Sharing listserv, with replies from 43 centers. PATIENTS OR OTHER PARTICIPANTS: The participants were transplant administrators. RESULTS: Several important practices that are audited by the Office of the Inspector General were not followed by a number of reporting institutions. About 30% did not account for pretransplant charges, 15% did not track pretransplant services, 40% do not use an external consultant, and the frequency of physician time studies varied. On the other hand, the vast majority of institutions perform frequent time studies and manually review pretransplant charges. These results suggest that most centers use accounting methods similar to those used at Henry Ford Transplant Institute, which will significantly improve recognition of pretransplantation costs.

Centers for Medicare and Medicaid services tighten reimbursements.

Hospitals will suffer when the Medicaid Recovery Audit Contractor (RAC) starts on Jan. 1, 2012, if case managers aren't scrutinizing those patients as closely as those who are covered by Medicare. Make sure your documentation is complete to avoid denials and prepare for appeals. Work with your state Medicaid provider to determine how the program will work in your state. Learn the rules for all states in which your patients reside. Be aware that the Medicaid RACs are charged with taking a proactive approach to identify potential fraud.

Audit Data Analysis and Application Based on Correlation Analysis Algorithm.

Traditional audit data analysis algorithms have many shortcomings, such as the lack of means to mine the hidden audit clues behind the data, the difficulty of finding increasingly hidden cheating techniques caused by the electronic and networked environment, and the inability to solve the quality defects of the audited data. Correlation analysis algorithm in data mining technology is an effective means to obtain knowledge from massive data, which can complete, muffle, clean, and reduce defective data and then can analyze massive data and obtain audit trails under the guidance of expert experience or analysts. Therefore, on the basis of summarizing and analyzing previous research works, this paper expounds the research status and significance of audit data analysis and application; elaborates the development background, current status, and future challenges of correlation analysis algorithm; introduces the methods and principles of data model and its conversion and audit model construction; conducts audit data collection and cleaning; implements audit data preprocessing and its algorithm description; performs audit data analysis based on correlation analysis algorithm; analyzes the hidden node activation value and audit rule extraction in correlation analysis algorithm; proposes the application of audit data based on correlation analysis algorithm; discusses the relationship between audit data quality and audit risk; and finally compares different data mining algorithms in audit data analysis. The findings demonstrate that by analyzing association rules, the correlation analysis algorithm can determine the significance of a huge quantity of audit data and characterise the degree to which linked events would occur concurrently or sequentially in a probabilistic manner. The correlation analysis algorithm first inputs the collected audit data through preprocessing module to filter out useless data and then organizes the obtained data into a format that can be recognized by data mining algorithm and executes the correlation analysis algorithm on the sorted data; finally, the obtained hidden data is divided into normal data and suspicious data by comparing it with the pattern in the rule base. The algorithm can conduct in-depth analysis and research on the company's accounting vouchers, account books, and a large number of financial accounting data and other data of various natures in the company's accounting vouchers; reveal its original characteristics and internal connections; and turn it into an audit. People need more direct and useful information. The study results of this paper provide a reference for further researches on audit data analysis and application based on correlation analysis algorithm.

Bayesian inference of local government audit outcomes.

The scandals in publicly listed companies have highlighted the large losses that can result from financial statement fraud and weak corporate governance. Machine learning techniques have been applied to automatically detect financial statement fraud with great success. This work presents the first application of a Bayesian inference approach to the problem of predicting the audit outcomes of financial statements of local government entities using financial ratios. Bayesian logistic regression (BLR) with automatic relevance determination (BLR-ARD) is applied to predict audit outcomes. The benefit of using BLR-ARD, instead of BLR without ARD, is that it allows one to automatically determine which input features are the most relevant for the task at hand, which is a critical aspect to consider when designing decision support systems. This work presents the first implementation of BLR-ARD trained with Separable Shadow Hamiltonian Hybrid Monte Carlo, No-U-Turn sampler, Metropolis Adjusted Langevin Algorithm and Metropolis-Hasting algorithms. Unlike the Gibbs sampling procedure that is typically employed in sampling from ARD models, in this work we jointly sample the parameters and the hyperparameters by putting a log normal prior on the hyperparameters. The analysis also shows that the repairs and maintenance as a percentage of total assets ratio, current ratio, debt to total operating revenue, net operating surplus margin and capital cost to total operating expenditure ratio are the important features when predicting local government audit outcomes using financial ratios. These results could be of use for auditors as focusing on these ratios could potentially speed up the detection of fraudulent behaviour in municipal entities, and improve the speed and quality of the overall audit.

Costing of clinical services in rural district hospitals in northern Vietnam.

OBJECTIVES: This study aimed to estimate and analyse the "actual" unit cost of providing key clinical services in selected rural district hospitals in the North of Vietnam. It also examined the relationship between actual costs and the levels of cost covered by the corresponding user fees paid by patients. METHODS: This was a facility-based costing study which estimates the costs of health care services from the perspective of the service providers. Three rural district hospitals from three provinces in the North of Vietnam were purposively selected for this study. The "step-down" approach was applied. RESULTS: There was little difference in the costs of an outpatient visit across the hospitals, but the costs of an operation and an inpatient day varied considerably. In terms of cost structure, personnel costs accounted for the highest share of total cost of the clinical services. The shares of operating cost were considerable while depreciation of buildings/equipments made up a small "proportion". The study results revealed that the user fee levels were much lower than the actual costs of providing the corresponding services. The present study highlights the importance of costing data for hospital planning and management.

A content analysis of analyst research: health care through the eyes of analysts.

PURPOSE: This article contributes to the understanding of how health care companies may communicate the business models by studying financial analysts' analyst reports. The study examines the differences between the information conveyed in recurrent and fundamental analyst reports as well as whether the characteristics of the analysts and their environment affect their business model analyses. METHODOLOGY: A medium-sized health care company in the medical-technology sector, internationally renowned for its state-of-the-art business reporting, was chosen as the basis for the study. An analysis of 111 fundamental and recurrent analyst reports on this company by each investment bank actively following it was conducted using a content analysis methodology. FINDINGS: The study reveals that the recurrent analyses are concerned with evaluating the information disclosed by the health care company itself and not so much with digging up new information. It also indicates that while maintenance work might be focused on evaluating specific details, fundamental research is more concerned with extending the understanding of the general picture, i.e., the sustainability and performance of the overall business model. The amount of financial information disclosed in either type of report is not correlated to the other disclosures in the reports. In comparison to business reporting practices, the fundamental analyst reports put considerably less weight on social and sustainability, intellectual capital and corporate governance information, and they disclose much less comparable non-financial information. RESEARCH IMPLICATIONS/LIMITATIONS: The suggestion made is that looking at the types of information financial analysts consider important and convey to their "customers," the investors and fund managers, constitutes a valuable indication to health care companies regarding the needs of the financial market users of their reports and other communications. There are some limitations to the possibility of applying statistical tests to the data-set as well as methodological limitations in relation to the exclusion of tables and graphs.

Financial and operational ratios for bond-insured hospitals.

Few, if any, researchers have analyzed the performance indicators of companies that offer bond insurance to hospitals and healthcare systems. The authors of this study analyzed the key financial and operational indicators of independent hospitals and hospitals within large multihospital systems that are insured by the 5 major bond insurance companies. The authors examined 87 insured bond issues; the results of this study show that some insurers cover healthcare facilities that have strong operational traits and others focus on financial factors.

Reining in RAC.

The much-dreaded Medicare recovery audit contractor program is scheduled to go nationwide this fall. Hospitals hope the most onerous aspects from the RAC pilot project will be gone by then.