5 Steps to Perform an Internal Billing Audit for Physician

Auditing physician charges and billing practices allows the physician and practice staff to identify incorrect billing pattern before claims are denied. Annual audits enable the physicians and staffs to spot the specific coding and billing issues that may recur in similar claims submission. The OIG recommends that practice audits be conducted at least annually, and that they be used to identify risk areas. If a physician wants to improve his claims management processes, cash flow and compliance with applicable laws and regulations, it’s important to learn how to perform a physician practice internal billing audit.

To get the best out of an audit, physicians and practice staff should participate in the audit process. Physicians are entitled to be paid for the services they provide, as long as they are coded and documented appropriately. Having a strong knowledge of CPT codes and guidelines, the Resource-Based Relative Value Scale (RBRVS), health insurer’s medical payment policy, fee schedules and reimbursement guidelines are imperative to a successful audit.

5 Steps to Perform a Billing Audit

1. Assignment of work: Firstly, it’s important to determine who in the practice will be responsible for auditing the health insurer payments, and then start assigning physicians, staffs or an outside consultant (if needed) to perform the audit.
2.  Follow OIG Audit Process: The OIG recommends auditing five or more medical records per federal payer, or five to 10 random medical records per physician. In addition, the OIG recommends three methods of drawing a random sample: from paid claims, claims by payer or claims containing one of the top 10 denials by payers.
3.  Claim Analysis Checklist: A claim analysis checklist will help you identify the appropriateness of coding, documentation and completeness of a claim. For instance, the checklist items include: Are the correct physician and practice identification numbers listed on the claim? Is the appropriate modifier appended to the CPT code to more exactly reflect the service performed?
4.  Medical Necessity: Your medical record should substantiate that each service provided by you was medically necessary and reasonable. Physicians and practice staff should carefully review the payer’s medical service agreement for the specific definition of medical necessity. Payers, and even employer groups, may have their own definitions of medical necessity.
5.  Medical Documentation: Always make certain that the patient’s documentation is appropriate to the billed service. The physician may report E/M services based on one of the two sets of CMS E/M coding guidelines (the 1995 or 1997 version).

Physicians and practice staff should never stop improving the practice’s claims submission and auditing processes. If you aren’t sure where to start, coding expert Kim Garner Huey will be conducting a session on developing a physician practice audit program, where she will cover the basics of why we need to audit, where to get started, how to choose the scope and more.