Quality medical billing and coding services are an essential component of the revenue cycle management solutions provided by experienced outsourcing companies. Internal coding audits strengthen coding practices by ensuring the accuracy and completeness of clinical documentation in the medical record. Indentifying coding errors internally is critical for physicians to get paid and to avoid external audits by Medicare and other payers. In addition to improving the financial health of the practice, well-conducted yearly audits improve efficiency of care. Here are some important points to consider when conducting an internal coding audit:
- Identify the records to be audited: Medical practices should focus on their top 10 diagnostic related groups (DRGs), top 10 inpatient and outpatient procedures performed, and high volume/high risk diagnoses and procedures. Check out provider-specific Medicare statistics for target areas that are typically associated with improper payments due to billing, DRG and/or admission necessity concerns as well as current areas of Office of Inspector General (OIG) focus. Select a random sample of records and types of accounts which were pulled up for deficiencies in prior external audits or payer denials.
- Examine documentation: One of the main reasons claims are denied is insufficient documentation, and repeated denials can trigger an audit. To determine if coding is appropriate, compare it against the actual clinical documentation recorded in the charts. This audit can identify any variation from national averages which is due to inappropriate coding or to nonconforming levels of intensity among the practice’s patients.
- Check out Evaluation and Management (E/M) coding: E/M patterns are under scrutiny by the Centers for Medicare and Medicaid Services (CMS) as well as private payers. Practices need to review each physician’s coding pattern or usage anomalies. E/M service levels are to be selected based on history, examination and medical decision-making. Medical necessity must support all three components. Select a mix of encounters that include more than just the E/M service, choose a date of service, and check which E/M code was billed. Examine the most expensive charges, and ensure that these are being documented, coded, and billed correctly. Also check charges that are billed more frequently. Documentation, coding and billing for services should meet federal, state and payer guidelines. E/M levels should be inspected to see how they compare with peers in the same region across the same specialty. Any significant deviation from this bell curve could be a tip-off to auditors.
- Generate a CPT frequency (usage) report: Generated from the practice management system (PMS), this report provides the ability to track the frequency of CPT usage. Each CPT code is matched to a corresponding charge. Generate one report for a full year for each provider and one report for all providers combined. Tracking CPT usage can identify possible over-use of some codes and overlooking other, more accurate ones. Charging for codes from another specialty may be a red flag for an investigation and possible revision of the practice’s super bill.
- Scrutinize other details: Make sure that the principal diagnosis on the claim form should is in sync with the reason for the visit in the medical records. Ensure that medication reports include the start and stop times for drugs and that claims include the correct number of units.
- Ensure that your billing software is working efficiently: A recent RAC Monitor article recommends that physicians check their billing software to ensure that it is working properly. Computer systems can create serious errors leading to errors in billing claims. Outsourcing medical billing to an expert is an effective strategy to avoid such issues.
- Analyze results: It’s important for physicians to evaluate and study the results of the coding audit and discuss the outcomes to see what needs to be improved or corrected. Bringing all staff onboard can improve coding and compliance with documentation guidelines.
- Take corrective action: Create and implement a corrective action plan to address identified areas of concern. Develop preventive action processes based on the findings of the audit. Findings that have affected reimbursement should be re-billed. Audit results should be used to improve physician documentation initiatives.
Proactive internal audits performed by an expert can improve provider documentation, rectify potential billing errors, and minimize the risk of external audits. However, most providers face audits at some point of time. The RAC Monitor report recommends that the best strategy for practices facing an imminent audit is to contact an experienced medical billing and coding service provider. An expert can spot problem areas that will come in for scrutiny by auditors so that corrective action can be taken. If there are payments that need to be defended, providers should act quickly and dispute the findings to initiate processes before the deadlines.
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