Importance of Periodic Medical Billing Audits for Process Improvement

Medical billing audit

Audits are mainly conduct to verify compliance to the set standards of practice. In health care industry, medical billing audit has many faces. When it is conduct by the authorities or the insurance payer on a complaint filed about improper billing practices in the clinic, it is bad news. But before getting there, the clinics can audit their billing process internally or hire a team of external auditors to eliminate all the risk factors that could possibly land you in trouble. 

The most commonly conducted audit is the review of medical charts. So, This is the best way to check for coding compliance and accuracy of information. In medical chart auditing process, the coding document is compare against the actual health record documentation to see whether the codes assigned are proper and relevant according to standard coding regulations. 

Steps of Auditing:


First, you need to establish the scope of the audit. Have clarity on what you need to investigate by the medical billing audit process. Check whether you have a benchmark of standards set to compare the process with, or whether the audit is being conduct as a result of an external inquiry on your billing practice? What should be the tools to imply for auditing and what should be the sample size being verified? Is it going to include the financial record audits and compliance verification? All these are very relevant before you start the process.


Next step is to choose whether you are going to conduct a prospective audit or a retrospective audit. Prospective audit is conduct before the claims are send out to the insurance company for reimbursement. This is to make sure that billing claim is totally validate by the data in the medical documentation, so that in case there are inconsistent areas discover by audit process, it can be rectify before the claim reaches the insurance payer. At the same time, a retrospective audit is conduct after receiving reimbursement from the payer. Here the auditor looks into the billing documents and explanation of benefits as well to verify whether the services reported in the claim matches the payers’ coverage contracts.


Depending on the approach towards the medical billing audit process, one can go for a random audit or a focused audit. Everything depends on the scope and objectives for conducting the process. Focus audit is conduct specific to an area in question- like all the bills from a single provider, type of cases or all bills sent to a particular insurance company. In random auditing, there is no specific target area and the samples chosse to audit are quite random. They are repeat at regular intervals and mainly aim at overall process improvement.


Next step is to decide on the size of the sample to be audited. Sample size is determine by auditors using statistical analysis of the total file volume. This is a very critical area on the outcome of the audit. If the sample size is too big, the amount of time required and size of auditing team might tend to get insufficient. At the same time, if the sample size is too small, chances are, the results may be distort.


Now we can look for the right tools and reference guides to conduct the audit. It is the set of regulations or guidelines against which the documents are going to get match up to identify discrepancies. For example, coding documents are verify against ICD-10-CM, CPT, HCPCs code sets. The billing and claim documents are compare with the insurance providers payment policies and guidelines. Medical terminologies used in the health records are looked up in the medical textbooks. And dictionaries of the respective medical speciality hence forth.


Availing the documents and conducting the audit is the next step. All the documents of one patient for a particular date of service, like visit information, procedure notes, inter departmental referrals medication charts, codes of services, billing invoice, claim documentation etc. Are to be brought together and check for coordination of information and treatment provided. Double check on the coding criteria and accuracy of documentation.


After conducting the medical billing audit, one has to come up with a detailed analytical report of the audit summary. The audit findings are categorically chart out based on the areas of errors and provider in charge. The final report must be conclusive. And legible enough for the clinic staff to make out where is the process lacking. It should also provide suggestions and recommendations for improvement alongside.


A discussion is conduct between the auditors and the clinic staff regarding the outcomes. Each finding is thoroughly communicate with its implications on the overall revenue cycle along with ways to rectify the errors. It could be anything from changing the practice management system to educating the staff on new coding practices.

To make the best out of medical billing audit, it should be repeated at regular intervals to finetune the billing process to perfection. 


JENIKIM is a General Blogger & writer who has been extensively writing in the technology field for a few years. He has written several articles which have provided exciting and knowledgeable information. He is a web content writer, and guest blogger, who offers unique and professional content writing services to online business entrepreneurs.

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