top of page
  • Writer's pictureAHAP Inc.

The Purpose of Coding Audit

Quality health care is based on accurate and complete clinical documentation in the medical record. And the best way to improve your clinical documentation and financial health of organization is through medical record audits.

Coding chart audit is an examination of medical records to determine what procedures and services is performed. For payers and providers, the quality of healthcare largely depends on the accuracy and completeness of the medical records generated by clinicians and other health care professionals.

When conducting coding audits, auditor needs to analyze the medical record based on the documentation based on patient encounter to determine the level of service, correct diagnosis codes, ancillary services, and modifier used as well identifying any lost revenue and un-documented services as revenue capture. In addition, audit helps ensure compliance to organization policies and procedures, payor regulations, and coding guidelines.


Providers need to properly document clinical services to satisfy reporting requirements for the procedures, supplies and medical services that you provide. Documentation needs to be specific in describing the patient’s acute or chronic conditions, illness, and chronic complaints. Protect against fraudulent claims and billing activity. When documenting, providers should make certain that documentation supports level of care and that the service level is medically necessary.

Determine the frequency of reviews

How often should your facility perform an audit? Frequency is determined by different variables. Volume of cases may warrant more frequent audits. The frequency of the audits will depend on the number of problem areas and the overall error rate of the organization. Normally, audits are conducted monthly, quarterly, semi-annually, or annually. If you are auditing your medical records internally, perform an external audit at least once per year to ensure that the internal findings are objective.

Internal or External Audit

In today’s healthcare many practices use a combination of internal and external audits to maintain compliance. An internal audit may be conducted periodically by the coding staff trained in auditing medical records. While there are advantages of keeping services in-house, outsourcing offers several unique values.

However, the advantages of outsourcing non-medical services are a viable strategy to be considered. Employing a full-time internal auditor is sometimes cost prohibitive for the solo or small group practice. Outsourcing medical chart auditing as well as coding services allows hospitals and other healthcare practices to reduce expense such as human resource aspect of managing, recruiting, training, and scheduling an internal coding department.

The decision to perform the audits internally or externally is determined by each individual practice. Advantage of conducting an external audit is that it provides an objective approach in determining whether problems exist. In practice, an external auditor typically will conduct a “baseline” sample audit of various levels of E/M services and surgical procedures to evaluate the coding compliance for each practitioner. Typically, external audits are performed quarterly, semiannually, or annually which depends on the results of the baseline audit.

Audit Results

Once the summary report has been completed for each practitioner, the next step will be to review audit findings and discuss results with each practitioner. The focus should be to clarify the deficit areas related to the documentation and coding and areas that need improvement. Keep coding audit results professional and educational. Providers should be given the opportunity to review and study the results of their coding audit and to discuss openly areas that need improvement.

Monitoring for Accuracy

Ongoing audits and training should be standard within the practice to maintain compliance. It is vital that after the initial baseline audit organization needs to continue to monitor for compliance and to ensure that improvements have been made. Every organization needs to develop a method or process to measure compliance and the effectiveness of the training that has been provided.

Recent Posts

See All


bottom of page