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  • Anders Knox

Data Saints Auditing - Why We Matter

Data Saints Auditing would like to partner with you as your DRG/APC claim audit firm. We believe we can be the number one revenue integrity vendor when measured by Net Recoveries, Reversal Rate and Commission Rate. This document is intended to demonstrate why we can make these claims and how we will deliver.


Technology: Benefits and Limitation


We are proud of our technologies that filter and select medical claims with the greatest potential for savings as well as our ability to route those claims to the most appropriate auditors to maximize your recoveries. We are also proud of the applications we have created to support our auditors and to minimize the time they need to review claims by organizing data, medical records and resources to be ready when they need them. With that being said, we don’t think that technologies like this solely differentiate auditing companies.


The main product of a DRG/APC auditing company is an auditor’s review of a claim and associated medical record. The data shows that great auditors can succeed in any reasonable environment and below average auditors will produce below average results in any environment.


The table below breaks out DRG auditors by find rate. The relative results between tiers are illuminating: no amount of incremental technology improvement is going to bring lower tier auditor’s performance up to the level of the highest tier performers.


This straight-forward data demonstrates that good auditors not only are the best at finding overpayments, but they are also the best at limiting reversal rates. There is absolutely no downside to using the best auditors.


Economic Structure of Audit Firm Drives Results


Given the clearly superior performance of top auditors, it is surprising that on average only 15-20% of an auditing company’s revenue goes to paying those auditors in the DRG/APC over-payment recovery industry. Typically auditing firms are running a low wage, high turnover environment.


Contrary to its competitors, Data Saints has worked hard to automate as much of the management overhead as possible. Where our technology, structure and mindset clearly separate us from our competition is in the elimination of costs that don’t benefit Payers - thereby providing the margin necessary to create a high wage, low turnover environment. The chart shows how our personnel costs stack up compared to the industry.


Effects of Top Quality Auditors


The biggest “win” for insurance companies is having 100% of their auditors rate in the top 25%. The single biggest factor in securing those auditors is compensation. Any auditing firm that is focused on cutting auditor related compensation instead of non-auditor costs is doing a huge disservice to its clients: the Payers.



*18% DRG commission rate used to calculate vendor share.

Why do auditing companies do this? Because auditing firms bear the full burden of their auditors’ cost, it is much more profitable for the auditing company to increase claim volume with inexpensive auditors than to maximize recoveries with highly skilled auditors. This is even more exaggerated in the offshore model. Having almost-free auditors find half of the recoveries of a highly experienced auditor, per 100 claims, is far more profitable for the auditing firm even though the insurance company is losing out on millions of dollars.


Conclusion


It is rare in the business world that paying people more results in a win for everyone involved. The data shows that complex medical claim audits is an area where this is the case. When auditors are correctly valued by the market they will get life-changing salaries, Providers will see lower abrasion, and Payers will see maximum recoveries.


Please call me at 650-392-5958 or email me at aknox@datasaints.com to hear more.

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