Medical Billing Audit


Does your practice have medical billing audit plan, and who is conducting those audits? Some practices believe that internal auditing makes the most sense. After all, audits can be costly, and practices must do everything they can to remain competitive – especially when healthcare systems are consolidating into ever-larger and more powerful organizations.

What’s In an Audit?

An audit can take two forms. Prospective audits are performed before claims submission and retrospective audits are performed after claims have been paid. Both forms of audit should be conducted regularly and can be conducted by an internal staff or utilizing outside auditing firm.

In a medical billing audit, billing documentation and coding are two of the most important areas tested. If a bill is undercoded, revenue is lost. If this happens on a consistent basis, even a small mistake can become quite substantial to the practice financially. Overcoded bills generate more revenue than they should, and if discovered, that money must be returned to the payer. If overcoding is discovered by the OIG, the money will be demanded by Medicare, the practice may be fined, and be put on OIG pre-payment review. Transposed CPT numbers or even inaccurate patient data can also result in denied claims. The audit process can identify all these errors.

Internal Audits


While it may seem as though an internal audit would be less costly, a medical billing audit requires objective, dedicated resources. With a dedicated internal audit group, audits may be performed on a periodic or even ongoing basis, allowing the organization to continuously adapt its processes for improved accuracy. However, even a dedicated audit staff must be checked, so every practice should have an independent, external audit performed on monthly, quarterly or annual basis.

Advantages of External Audits


Medical practice regardless of size, can be a busy place, and often there just aren’t enough hours in the day to attend to the task of a medical billing audit. An external audit review can provide an impartial view as well as providing education, consultation, comprehensive reports and recommendations for improvement.

Whether you choose to perform internal audits or utilizing services of external audit firm for your medical billing audits is something to consider in order to ensure your practice gets objective information about its billing accuracy. An objective audit is a crucial element for any practice and organization as part of compliance program that can help maximize your medical billing and exposure to the OIG audit.

Importance of Clinical Chart Auditing

With constant changes within healthcare environment and a shift from volume to value, healthcare organizations need to rethink their use of internal audit. Healthcare organizations must be willing to expand their internal audit to include clinical chart auditing.


Hospitals and healthcare providers lose millions of dollars every year due to mismanagement of the billing process. This ranges from inaccurate charging, such as undercharging for a service or procedure or missing a charge altogether. Accurate charge capture processes will improve cash flow and increase revenue which adds up to a healthier bottom line satisfying regulatory compliance.


A clinical chart audit is an in-depth examination of medical records to ensure that all ancillary services, surgical procedures, supplies, medications, etc. were ordered & delivered to the patient as charged and promoting accuracy and integrity of hospital charges and assist in recovery of lost revenue.


Every Revenue generating department within any healthcare organization must properly document and record charges in order to establish control mechanisms to ensure that appropriate procedures and charging protocol are being followed.


One reoccurring question is often asked is how often to review and what sample of chart needs to be reviewed. A great practice for any healthcare organization is to perform concurrent audits to identify charges that may indicate deficiencies in charge pathways and processes. A concurrent audit is defined as a complete audit on a non-disputed account, completed within 30-days of patient discharge. The audit sample should be random query to be determined by the facility/client.


A complete concurrent audit conducted by an experienced nurse auditor, not only provides a precise audit detail with audit outcomes, it should also provide a detailed monthly audit statistic report to identify departments showing a trend of over charges and under charges including departmental error rates. These audit statistic reports, help to identify the reasons why the over and under charges are occurring and can further assist departments in creating a corrective action plan for resolution to prevent errors from reoccurring.


In conclusion, a chart audit is an examination of your facilities charging, documentation, and policies to determine at risk areas in your systems practice and improve a healthy financial system.

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