Prospective vs. Retrospective Audits
Revenue cycle managers want claims to be send out as soon as possible in order to keep revenue stream flowing. Any delays in claim submissions can have an adverse impact on an organization’s cash flow.
Based on CMS expectation, the accuracy of claims needs to be between 95-98 percent. Anything less than that can trigger an external audit.
Types of Audits
Healthcare organizations need to conduct both prospective audits as well as retrospective audits. The debate, however, often revolves around which type of audit is best suited to meeting the growing compliance demands: prospective or retrospective.
Prospective audits take place prior to claim submission, and focus on reviewing specific, targeted cases. These cases are often selected on the basis of Office of Inspector General (OIG) guidelines, or from high-risk areas identified in prior external audits. The goal of a prospective audit is to catch any billing or coding errors before the claim is submitted.
Retrospective audits involve reviewing claims that have already been submitted and preferably adjudicated as either paid, denied, or pending. The goal of a retrospective audit is to do a ‘deep dive’ on the internal claims process and identify underlying problems or high-risk areas based on the adjudication results.
Pros & Cons
Prospective audits emphasize the benefit of preventing incorrect claims from going out, and thereby reducing the chance of denials. Prospective audits also show CMS and other payers that the organization is being proactive in its coding and billing processes. Advocates of prospective audits believe that submitting clean claims results in quicker payments for the organization.
However, there are disadvantages with prospective audits. Unless the organization has unlimited resources, it is not going to be able to audit every account prior to billing. In most cases, it will be able to audit a small number of claims prior to billing which is about 10 cases per provider or problem areas which still leaves a large percent of claims that will not be reviewed and may still contain errors.
Retrospective audits have the advantage of time; they are not subject to the same time pressure that prospective audits are under. Claims have already been submitted and adjudicated so there is time to do a thorough, in-depth analysis and without pressure to submit bills, auditors can conduct in-depth review of as many cases as needed of complete chart documentation for appropriateness of the procedure, diagnostic code selections.
One of major benefits of retrospective audit is that a large data can be gathered and analyzed and provide a more realistic audit results and outcome and ultimately provide a more a comprehensive corrective action program focused on the impacted areas, whether they be registration, pre-authorization, clinical documentation, or coding.
The best solution will be a combination of both types of audits. By doing so, organizations can leverage the advantages, minimize the disadvantages, and that will result in a powerful way to address both objectives of clean claims and timely filing.
Combining prospective and retrospective audits results in a revenue integrity program that is focused on process improvement and corrective action. By doing so, organizations can identify source of errors and be able to provide education that is needed to prevent inaccurate claims.