Why perform audits?
Medicare statistics show that coding error rate is consistently around 30%. Without regular audits, your coding error rate is probably even higher, and you could be losing money or seriously out of compliance. While most practices are making a good faith effort to perform accurate coding, this does not excuse them from compliance standards, over-billing, under-documenting, and the potential for years’ worth of take-backs.
Medical practices generally audit for two primary reasons:
- Revenue – To ensure that the practice is being properly paid for its services
- Compliance – To ensure the practice is only billing for the services it is providing.
What's In an Audit?
An audit can take two forms. Prospective audits are performed before claims submission and retrospective audits are performed after claims have been paid. Both forms of audit should be conducted regularly, and can be conducted by an internal staff or by paid, outside consultants.
In a medical billing audit, billing documentation and coding are two of the most important areas tested. If a bill is under-coded, revenue is lost. If this happens on a consistent basis, even a small mistake can become quite substantial to the practice financially. Over-coded bills generate more revenue than they should, and if discovered, that money must be returned to the payer. If over-coding is discovered by the OIG, the money will be demanded by Medicare, the practice may be fined and it may even be put on OIG pre-payment review. Transposed CPT numbers or even inaccurate patient data can also result in denied claims. The audit process can identify all of these errors.
What does your audit look for?
Our audit reviews claims for the following:
- Verifying that all relevant codes are included
- Verifying all documentation to support the coding
- Verifying compliance amongst notes & coding
- Auditing for necessary modifiers
- Auditing for human errors
- Comparing “best practices” receipts against actual receipts