HCP 516 Week 5 Writing a Corrective Action Plan Example

One Action for Every Cause, a Date for Every Action and a Test That Proves It Worked: The Corrective Action Plan for Overbilled Therapy Units

[Student Name]

University of Phoenix

HCP/516: Auditing, Monitoring and Corrective Action in Compliance

Week 5 Assignment

[Instructor Name]

[Date]

The therapy company, its plan, costs, dates and results are composites written for a model paper; research, guidance and rules come from the sources listed.

Thirty days after the root cause report on overbilled therapy units, the composite outpatient therapy company's compliance committee expected a corrective action plan. The compliance manager, working with the root cause team, the chief operating officer and the chief financial officer, wrote it around three tests: every action tied to a cause, every action with an owner and a date and every result verified. This paper presents the plan.

Principles

The plan follows a published hierarchy that ranks design changes and automation above standardization and checklists, and those above training and policies (National Patient Safety Foundation, 2015). Training remains part of the plan, but never as the only response to a cause.

Cause One: Unit Rules Learned Elsewhere

Actions: add a module on Medicare's timing rule to orientation for every new therapist and assistant, with a short competency test on sample visits; provide a one-page reference in each clinic. Owner: director of clinical education. Date: within 45 days. Evidence: orientation records and test scores.

Cause Two: The Template

Actions: change the documentation template so it totals timed minutes automatically, displays the units supported by those minutes and warns the therapist when selected units exceed them; standardize all 12 clinics on the one template and remove local customization rights. Owner: documentation analyst with the chief operating officer. Date: within 60 days. Evidence: template release notes and a test script showing the warning works. The best way to stop therapists from miscounting units is to stop asking them to count.

Cause Three: No Check Before Billing

Action: add a billing system edit that holds any claim where billed timed units exceed the units supported by documented minutes, routing it to a biller for correction. Owner: revenue cycle director. Date: within 60 days. Evidence: edit specifications, a test file and weekly counts of held claims.

Cause Four: Oversight

Actions: add unit checks to monthly manager chart reviews and add a weekly report of held claims by clinic and therapist to monitoring. Owner: clinic directors and compliance manager. Date: within 30 days.

Cause Five: Productivity Pressure

Actions: remove posted units-per-visit boards, replace units per visit in therapist scorecards with a documentation accuracy measure and review the productivity policy to ensure it states that units must reflect documented minutes. Owner: chief operating officer. Date: within 30 days.

Returning the Overpayment

The audit's estimated overpayment had a point estimate of about $69,700 and a lower limit at 90% confidence of about $52,300. Under the federal rule effective in 2025, a provider must report and return identified overpayments within 60 days, with the deadline suspended for up to 180 days while it conducts a timely, good-faith investigation of related overpayments (Centers for Medicare & Medicaid Services, 2024). Counsel reviewed the findings, concluded that the errors reflected mistakes rather than potential fraud and advised returning the overpayment to the Medicare administrative contractor through its voluntary refund process with the sampling documentation, rather than using the inspector general's self-disclosure protocol, which is designed for potential fraud. The company returned the lower-limit amount, as counsel advised is accepted practice for extrapolated refunds, within the permitted period. Individual overpayments at the outlier clinic, found in its focused review, were returned claim by claim.

Feedback to Therapists

Therapists received individual feedback on their audited visits, including visits where they had billed correctly, so the conversation was not only about mistakes. The way it was delivered followed research. Ivers et al. (2012), pooling 140 trials of audit and feedback, found typical gains in desired practice of a few percentage points, and bigger ones where performance started low and where feedback was repeated, came from a supervisor or respected peer, in person and in writing, alongside a clear target and a plan for reaching it. Clinic directors met each therapist with errors, gave written results with a target of fewer than 5% unit errors and repeated feedback after 60 days.

Communicating the Plan

The plan was shared with every clinic in a short meeting led by the chief operating officer, who explained what the audit found, why the company was repaying money and what would change. Leaders presented the errors as the company's problem, created by its templates and systems, not as therapists' failings. Therapists were invited to test the new template before release, and three suggested changes that made the minutes fields faster to complete. A plan that staff understand and helped shape is more likely to work than one imposed by memo.

Handling Disagreement

Two therapists disputed findings on their visits even after validation. The manager arranged a second review by the outside therapist reviewer, who upheld one finding and reversed the other. Having a path to challenge findings kept the process credible and caught a genuine error in the audit.

Tracking the Plan

Every action sits in a tracking log with its cause, owner, due date, status and evidence of completion. The compliance manager reviews the log every two weeks, and the committee sees it monthly until the plan closes. Two actions slipped: the billing edit went live 12 days late because of a vendor delay, and the orientation module took an extra two weeks. Both delays were reported with new dates rather than quietly absorbed.

Resources

The template and billing edit required about 120 hours of analyst and vendor time, costing $18,000. Training and feedback used existing staff time.

Verification

Ninety days after the template and billing edit went live, the compliance manager repeated the audit using the same method: a random sample of 120 Medicare visits from the period after the changes. Four visits, 3.3%, had unit errors, all minor and all caught by the billing edit before submission except one where the therapist had overridden the warning. The outlier clinic's focused review found one error in 30 visits.

Ongoing Monitoring

The weekly report of held claims continues. When held claims for any therapist exceed 10% of visits in a month, the clinic director reviews and provides feedback.

What the Verification Did Not Prove

The follow-up audit showed that unit errors fell sharply, but it covered only 90 days and a period when attention was high. Improvements often fade once attention moves elsewhere. That is why the plan keeps the billing edit and weekly monitoring permanently and places the area back in the annual plan, so the company will know if errors creep back.

Closing the Plan

The committee closed the plan after the verification audit and will retest the area in next year's audit plan at a lower priority.

Conclusion

The plan tied eleven actions to five causes, favored a template that counts units and a billing edit that catches mismatches over training alone and returned the estimated overpayment within the rule's time limits after counsel's review. Feedback delivered in ways research supports helped therapists adjust. A verification audit using the same method showed errors falling from 21.7% to 3.3%, the evidence that the plan worked.

References

Centers for Medicare & Medicaid Services. (2024). Medicare and Medicaid programs; CY 2025 payment policies under the physician fee schedule and other changes to Part B payment and coverage policies; Medicare Shared Savings Program requirements; Medicare Prescription Drug Inflation Rebate Program; and Medicare overpayments. Federal Register, 89, 97710. https://www.federalregister.gov/d/2024-25382

Ivers, N., Jamtvedt, G., Flottorp, S., Young, J. M., Odgaard-Jensen, J., French, S. D., O'Brien, M. A., Johansen, M., Grimshaw, J., & Oxman, A. D. (2012). Audit and feedback: Effects on professional practice and healthcare outcomes. Cochrane Database of Systematic Reviews, (6), CD000259. https://doi.org/10.1002/14651858.CD000259.pub3

National Patient Safety Foundation. (2015). RCA2: Improving root cause analyses and actions to prevent harm. Institute for Healthcare Improvement. https://www.ihi.org/resources/tools/rca2-improving-root-cause-analyses-and-actions-prevent-harm