Medical billing audits are an organized and detailed process that provides practices with valuable insights into their billing operations, helping to ensure they meet their financial goals. A simple audit can be helpful in some situations, such as just referring to your accounts based on how well they are balanced. However, an effective medical bill audit goes deeper, providing clear insights into where you may be missing the mark – and how much it may be costing you as a result. These audits should include a comprehensive look at medical claims, billing processes and procedures, effectiveness of coding practices, and the availability of documentation as required under law.

That may sound like quite a bit of work (and when done thoroughly, it is very valuable). If you want to learn how to complete one, consider this medical billing audit overview.

Step 1: Define Goals

Before moving forward with medical billing auditing, you need to establish some goals and objectives. You can tailor your auditing to just specific areas, such as for a specific practitioner, to determine if there are any gaps or concerns in place.

Defining these goals is critical in ensuring you get the accurate detailing you need. It also defines what records you will look at and the amount of time the process will take.

Step 2: Put Together a Meaningful Team

For a practice with a dedicated medical billing team, having an internal audit is an option, but somewhat limiting in effectiveness. You want not only a thorough audit, but one that is not biased in any way. Having an external team handle the medical billing audit in these cases makes sense.

Often, smaller companies may employ a small team of key people within the practice, such as leadership or accounting-specific professionals, to compile the audit themselves. The alternative here is doing both, including both internal and external stakeholders.

Step 3: Review Collected Documentation

Once you have a team in place, you can access and begin navigating through the medical documentation you have to verify its accuracy. This may include:

• Billing records
• Health records
• Insurance claim forms
• Payment records
• Patient records
• Provider information

Your goal is to target all aspects of billing records based on your objectives. Keep in mind that you must ensure accuracy and compliance throughout this process. That means all coding standards must be understood and payer requirements must be met.

Step 4: Highlight Areas in Need or High Risk

In some medical bill audits, any concerns you notice can be immediately apparent. For example, if you cannot find the information, or they do not align with the records you have. The key is not just to pinpoint mistakes but to look deeper at what is occurring and why:

• Is there a lack of training by one or more parties?
• Is there a lack of support or time to get the work done with accuracy?
• Is there a lack of education that is leading to incorrect CPT codes being applied?
• What is the negative impact of these situations on your billing practices?
• What steps can you take to overcome those challenges?

The Benefits of Medical Billing Audits

If this seems like a significant amount of work, and you are not sure it will yield results, know you’re not alone. Most involved with medical billing tasks do not realize that small mistakes end up creating serious risks over time. More so, these mistakes cost your practice money. Consider these benefits of routine medical billing auditing:

Improved Financials

The bottom line improves in several ways:

• Improved claim approval rates
• Boosted cashflow within the practice
• Reduced time spent on fixing errors
• Identification of missed billing opportunities expands revenue and better aligns profit statements
• It minimizes the risk of financial loss from costly non-compliance

Enhanced Compliance

Compliance mistakes are costly, but they also tarnish your practice’s brand and reputation. With the utilization of effective medical billing audits, you reduce the risk that such mistakes will hamper your practice’s success in any way.

Accurate Coding

Correct any potential coding errors currently in place. That resolves concerns, improves financial outcomes, and ensures you are not continuing to make errors over and over again.

Better Payer Relations

Medical billing errors are a common concern with insurance companies. Those practices with poor performance take up time and lead to higher costs on the payer’s end. For that reason, it is critical that you invest the time in solving ongoing problems so payer relations improve.

Improved Patient Care

Patients need to trust their healthcare providers. When a practice makes mistakes on their billing (even if a provider had nothing to do with it), that tarnishes the built up reputation. It impacts what the patient receives and the cost of the care they are receiving. It can also lead to patient turnover.

However, improvement from medical billing audits does the opposite. They can help to improve tracking and monitoring of the services and payments provided by patients. This helps increase patient satisfaction and could even lead to more referrals.

Administrative Benefits

Your team does not like making errors, but they can often do so when they are rushed. By correcting mistakes now and providing solutions for any cause of concern – such as improving support levels – can help boost the quality of work your employees provide. It helps to build confidence in your staff, improves job satisfaction, and makes their job less stressful overall. 

Practice Reputation

You want your practice to be known for the quality of care provided, not for the medical billing errors or the denials of coverage from payers. There is a very direct reflection here.

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