The Importance of Coding Audits in Healthcare

Quality healthcare relies on accurate and complete clinical documentation within the medical record. Medical record audits are essential for improving clinical documentation and the financial health of an organization.

Understanding Coding Chart Audits

Coding chart audits involve examining medical records to identify the procedures and services provided. For both payers and providers, the quality of healthcare is closely tied to the accuracy and completeness of medical records created by clinicians and other healthcare professionals.

Conducting Coding Audits

During coding audits, auditors analyze patient encounter documentation to determine the level of service, correct diagnosis codes, ancillary services, and modifiers used. They also seek to identify any lost revenue or undocumented services as part of revenue capture. Audits help ensure compliance with organizational policies, payor regulations, and coding guidelines.

Documentation

Providers must accurately document clinical services to meet reporting requirements for procedures, supplies, and medical services. Documentation should clearly describe the patient's acute or chronic conditions, illnesses, and complaints. Proper documentation protects against fraudulent claims and billing activities. When documenting, providers should ensure that the documentation supports the level of care and demonstrates medical necessity for the service provided.

Determining Audit Frequency

The frequency of audits depends on several variables, including case volume, the number of problem areas, and the overall error rate within the organization. Audits are typically performed monthly, quarterly, semi-annually, or annually. Facilities conducting internal audits should also arrange for an external audit at least once a year to ensure objectivity in evaluating findings.

Internal vs. External Audits

Many healthcare practices use a combination of internal and external audits to maintain compliance. Internal audits are often conducted by trained coding staff, while outsourcing offers distinct advantages. Employing a full-time internal auditor may be cost prohibitive for smaller practices. Outsourcing chart auditing and coding services allows organizations to reduce costs associated with managing, recruiting, training, and scheduling an internal coding team.

The choice between internal and external audits depends on the needs of each practice. External audits provide an objective approach to identifying problems. Typically, an external auditor will conduct a baseline sample audit of various E/M services and surgical procedures to assess coding compliance for each practitioner. The frequency of external audits is usually quarterly, semiannually, or annually, depending on baseline audit results.

Audit Results

After a summary report is completed for each practitioner, audit findings should be reviewed and discussed with them. The goal is to clarify documentation and coding deficits and highlight areas for improvement. Coding audit results should be presented in a professional and educational manner. Providers should have the opportunity to review and discuss their audit results and address areas needing improvement.

Monitoring for Accuracy

Ongoing audits and training are necessary to maintain compliance. After an initial baseline audit, organizations must continue monitoring to ensure improvements are made. It is important for each organization to establish processes for measuring compliance and assessing the effectiveness of training provided.