Every medical practice needs a billing audit. It helps them compete and follow industry rules. Auditing checks services and reduces claim mistakes. This makes reimbursement smoother and services more efficient. Let’s dive into billing audits in this blog for a better understanding.
What is a Medical Billing Audit?
A Medical Billing Audit is a structured process that checks how trustworthy and efficient clinical documents are. It involves a close look at a medical practice’s health records and the billing information given to insurance payers. The goal is to find, monitor, and fix any improper billing practices that might affect the financial side of things. Identifying potential compliance issues is crucial because billing has a direct impact on the bottom line. There are in-house teams for the audit process, but some practices prefer the medical billing company in the US for the audit process.
Types of Medical Billing Audits
Medical practices use different methods for effective billing audits. Here are some major types:
Internal Audit
Internal audits ensure that payments and claims follow the rules. Checking internal regulations regularly helps prevent healthcare fraud. This also acts as a strong defense against any charges of such crimes, as intent plays a role in healthcare crimes.
External Audit
External audits are done by professionals from outside the practice who are skilled in billing audits. They provide an unbiased evaluation of the practice’s billing practices. External audits are beneficial because they reduce conflicts of interest and allow an independent assessment.
Government Healthcare Audits
Government healthcare audits are crucial for accountability and ensuring compliance in medical billing. These audits are conducted by government agencies to make sure healthcare providers follow regulations, bill services accurately, and avoid fraudulent activities. Two significant programs undergoing these audits are Medicare and Medicaid.
Medicare
Medicare audits examine medical records and billing data to ensure that claims submitted for payment are legitimate, accurately coded, and supported by proper documentation. Medicare employs various audit types, including random sample audits, comprehensive error rate testing (CERT), and recovery audit contractor (RAC) audits.
Medicaid
Medicaid audits analyze records to ensure accurate billing, medically necessary services, and proper documentation. The Medicaid Integrity Program (MIP) is a crucial part of these procedures, aiming to prevent, identify, and recover improper Medicaid payments.
Medical Billing Audit Process
Conducting a medical billing audit involves careful planning and execution. The process consists of six main steps:
- Check the Audit Scope: Decide the type of audit – random, thorough, or hybrid. Ensure enough resources before finalizing the audit scope and the number of claims to review.
- Determine Sample Size: Choose a sample size that reflects various encounter types. Avoid auditing too many or too few documents, as it can be costly and biased. A normal audit sample size is 10 to 15 charts.
- Collect Documentation: Gather essential evidence for the charts under investigation, including lab results, paperwork, pictures, and other materials related to the date of service (DOS). Collect necessary documents such as superbill/charge ticket, patient chart, claim form, and explanation of benefits (EOB) for each patient encounter.
- Conduct the Audit: Review coding and documentation following CPT®, ICD-10-CM, and HCPCS Level II coding standards. Pay attention to coding for new versus established patients, consultation versus transfer of care, time-based code requirements, emergency medical services, and nonphysician practitioner services.
- Analyze Audit Findings: After completing the audit, identify problem areas such as incorrect code assignment, unsupported E/M levels, incorrect diagnosis codes, missing modifiers, incorrect diagnosis linkage, and services performed but not billed.
- Create the Audit Report: Compile audit results into a concise report. Clearly explain the audit’s scope and methodology. Label and categorize errors or risk areas, and reference them to the relevant standard. Provide recommendations for corrective measures, including additional training or changes to documentation processes. Suggest follow-up analysis to assess the effectiveness of corrective actions.
Medical Billing Audit Checklist Simplified
Stage 1: Getting Started
- Determine the size and staff needed for your audit.
- Choose a team member or hire a consultant to conduct the evaluation.
- Plan your audit strategies, like selecting charts and setting documentation comparisons.
- Share your formal audit plan.
Stage 2: Reviewing Reports
- Check billing reports for unusual patterns.
- Compare current results with past ones to identify anomalies.
- Assess the frequency of your services compared to peers, using E&M frequency reports.
- Create a report on your CPT code reimbursement process.
Stage 3: Setting Goals
- Establish improvement goals based on gathered information.
- Promptly and accurately encourage payers to meet agreed-upon rates.
- Follow up as needed and create a plan for dealing with late payments.
- Address any internal issues, including additional training for employees and service providers.
Stage 4: Making Auditing Routine
- Integrate auditing into your medical practice’s routine.
- Implement procedures in your billing business, like running regular reports and tracking net collections.
How Billing Audit Boosts Your Practice
A good billing audit can improve how your medical practice handles billing. Let’s see how medical practices benefit from doing these audits.
Prevent Billing Errors
Billing mistakes put your medical practice at risk. They may lead to legal problems and make your services unreliable. Regular billing audits find and fix mistakes, preventing future issues.
Assist Coding Staff
Audits help find coding errors, offer advice to fix problems and ensure up-to-date procedure codes. This streamlines the billing process and keeps it compliant with HIPAA regulations, avoiding legal troubles.
Establish Administrative Standards
Billing audits help the administrative team ensure claims are submitted truthfully and on time. This creates a positive work environment, sets standards for office workers, and avoids improper billing practices.
Enhance Patient Care
Auditing billing claims improves patient care by refocusing the practice on delivering quality service. It helps monitor services, trains doctors to provide better care, and leads to an improved revenue cycle.
Increase Profitability
Billing audits prevent fraud and help practices comply with ICD-10-CM. They ensure efficient use of electronic health data, reducing the chances of denials and boosting the practice’s profits.
Conclusion
Medical offices should consider doing audits on their medical billing. Audits help protect against financial losses, legal problems, and damage to reputation. They also help increase profitability and improve patient care quality. So, it’s a good idea for practices to invest in a medical billing audit. It’s a financial commitment that can safeguard your business and boost profits.
