If you’re happy with your practice’s reimbursements and you haven’t seen a recent spike in denials, you may feel like your medical billing operations are coasting along just fine. But is fine good enough?
It’s critical for practices large and small to earn every dollar they can. If you don’t periodically audit your systems, efforts, and results on the medical billing front, you’re almost certainly not operating at your optimum performance level.
How in-depth you decide to go with an audit is up to you… but more is better (especially if it’s been a while since you revisited your billing policies and procedures). Since every medical practice is different, there’s no one-size-fits-all checklist for auditing billing and coding, but there are some general steps every office should take and key considerations along the way.
Step 1: Map it Out
- Determine the scope of your audit and the manpower needed to execute it. (How many providers are in your practice? How many payers do you work with? How many billers and coders are on your staff?)
- Designate a team member or hire an outside consultant to conduct the review.
- Brainstorm your audit tactics. The tried-and-true approach: Randomly select a certain number of charts per provider and per payer and review documentation versus what was filled out. Assess whether encounters were undercoded or overcoded and whether claims were processed appropriately.
- Write up and circulate a formal audit plan.
Step 2: Assess the Scene
- Check your billing reports for troubling trends or risk areas. Check them against past performance month-over-month and year-over-year
- Review the frequency of your physician services over a set period and compare it with that of your peers using the latest industry benchmark data. (Run an E&M frequency report through your billing software, then compare it to the most current Medicare E&M frequency data from your Medicare carrier.)
- Run a report detailing how your CPT codes are being reimbursed. Compare it to your contract terms with individual payers and make sure they're paying what they owe you.
Step 3: Make Changes
- Armed with the above information, set a target for improvement such as a percentage decrease in your denied claims rate or an increase in revenue per patient.
- Make a concerted effort to pressure payers to pay their contracted rates in a timely and accurate manner. Follow-up as much as necessary.
- Address any internal problems and train your staff and providers on how to improve in areas of weakness. (You can’t code what isn’t documented, so make sure providers are noting all details necessary for accurate codes to be used.)
Step 4: Repeat
- Make auditing a regular occurrence. (If you do your medical billing in-house, it’s best practice to conduct an internal billing audit at least once per year. Large practices may conduct them as often as once per quarter.)
- Build processes into your medical billing operation to make auditing easier. Run frequent reports and monitor net collections.