Professional Medical Billing Audits

Billing audits serve a specific purpose and are distinct from assessments related to the level or scope of care, medical
necessity, pricing structures, or the delivery of items or services by
healthcare providers. These broader concerns are typically addressed through alternative mechanisms managed by qualified personnel.

Billing Audit Process

In the context of medical billing audits, the following aspects are covered:

1. 1. • Scope Determination:

This involves assessing the extent of the audit and the necessary resources for its efficient and effective completion. Key components may include understanding the involvement of clinical staff, payer compositions, and the makeup of billing and coding teams.

1. 1. • Audit Scene Assessment:

Auditors scrutinize the audit environment to identify any trends or areas of heightened risk. This step may also entail an examination of the frequency of provider services and an analysis of the utilization of CPT codes by billing staff and providers.

1. 1. • Corrective Actions:

The insights derived from audits are utilized as strategic information to enhance revenue cycle management and improve care outcomes. This includes establishing achievable targets for improvement, addressing internal issues identified during the audit, and advocating for enhancements from payers in areas where they are found to be lacking.

1. 1. • Continuous Learning:

The audit process is iterative, with each cycle informing the next. This approach ensures that future audits are conducted more efficiently and effectively.

Internal Billing Audits – Best Practices

Establishing best practices for your audit processes is crucial to maximizing the value of your audit efforts. Here are some recommendations:

Maintain a Comprehensive View

• Conduct quarterly audits, assigning a qualified individual to lead audit initiatives.
• Prioritize opportunities for physician training.
• Invest in pre-submission monitoring.
• Be proactive, particularly in adhering to payer guidelines.
• Foster open communication between coders and providers.

Focus on Billing Reports

• Monitor days in accounts receivable and analyze data from monthly reports to detect trends early.
• Track the growth in net collection percentage.
• Collaborate with your practice management software team to facilitate reporting.
• Employ a system that tracks the revenue cycle for each patient from appointment to complete payment.
• Concentrate on areas with the highest potential return.
• Match patient encounters to appointments.
• Generate reports on CPT reimbursement and compare them to individual payer contracts to identify underpayments.

Monitor Benchmarks

• Review the frequency of physician services over a one- to six-month period and compare them to industry peers, often using an E&M frequency report to avoid RAC audits.
• Ensure that nothing is written off at 100%, ensuring no revenue is given away for free.
• Establish a process for addressing denied or incorrectly paid claims.
• Larger groups should consider implementing a policy for dealing with providers who consistently demonstrate poor coding practices.
• In the event of a RAC (Recovery Audit Contractor) audit, consider enlisting the assistance of an external billing and coding specialist. View your internal audits as a valuable investment for the future.

Tips for Small Practices

Small practices have specific considerations when conducting audits. Here are some tips to maximize the benefits of your audit efforts:

• Designate a qualified team and
  implement an accountability system.
• Create controls to detect and
  prevent errors.
• Establish benchmarks for
  improvement.
• Consider the possibility of
  hiring a third-party service.

As billing and coding grow increasingly intricate, a deliberate and strategic approach to billing audits is imperative for every medical practice. Managers of small practices should assemble their healthcare audit resources today and collaborate with seasoned professionals dedicated to achieving a strong return on their audit investment.