Your practice works hard to monitor revenue and expenses, invest regularly in staff training, and implement managerial practices that help to increase productivity. But if you don’t keep tabs on your billing and coding activity, all your efforts may be for naught. Indeed, diagnostic and procedure codes are the lifeblood of the physician practice, the numeric system used to ensure your doctors get paid fairly for the work they do.

What is an Audit?

A prospective practice billing audit is commonly performed to ensure the physician is submitting appropriately coded claims according to Current Procedural Terminology codes, guidelines and conventions, and payer payment policies, as the physician is ultimately responsible for claims. Any aspect of the patient encounter whether it is clinical information or billing/coding related can be audited.

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.

Who should perform the audit?

Physicians and practice staff should participate in the audit process for beat results. As a physician, you are entitled to be paid for the services you provide when they are coded and documented  appropriately Physicians and practice staff with a strong knowledge of CPT codes and guidelines.

Internal vs. External Audits:

Internal Audit:

An internal and external audit is one that is performed by members of the organization. Some large hospital systems have an internal audit department that is responsible for auditing all aspects of the healthcare system (not just the coding and billing).

Advantages of Internal Audits:

While it may seem as though an internal audit would be less costly, a medical billing audit requires objective, dedicated resources. In large companies more resources are available to administer the audit process, and these resources may come from another part of the company with a less subjective viewpoint than a billing department employee might have. However, even a dedicated audit staff must be checked, so every practice should have an independent, external audit performed on an annual basis.

Advantages of External Audits:

External auditors are immune to conflicts of interest that may otherwise compromise an internal audit staff. An up coded bill is often providing increased revenue, which, for most, is a huge problem. Experienced external auditors know where to look for issues such as this that may be missed by less objective eyes. And even when an internal auditor finds problems in the policies and procedures of its own practice, the auditor’s recommendations may go unheeded.