What is Medical billing Audit - Importatnt steps in Audit

Auditing physician charges and billing practices is burdensome, but it will typically yield improved claims management processes, cash flow and compliance with applicable laws and regulations. An annual audit allows physicians and practice staff to identify specific coding issues that may recur in similar claims submissions. Careful pre-submission monitoring and review of these similar claims may safeguard against errors that could result in a claim denial. An internal audit allows the physician and practice staff to identify incorrect billing patterns before claims are denied or outside auditors assess penalties.


What is a billing audit?


A prospective or retrospective physician practice billing audit is commonly performed to ensure the physician is submitting appropriately coded claims according to Current Procedural Terminology (CPT®) codes*, guidelines and conventions, and payer payment policies, as the physician is ultimately responsible for claims submission, even if a billing service or clearinghouse is used for claims submission to payers.
 1. In a prospective billing audit, a designated practice staff person or internal compliance officer reviews the claims before they are submitted to the payer to ensure the appropriateness of the coding, documentation and adherence to health plan medical payment policies.

2. In a retrospective audit, a designated person reviews claims for appropriateness after they are paid. All overpayments and billing errors identified during a retrospective audit should be handled according to the payer’s repayment guidelines.


Who should perform the audit?


Physicians and practice staff should participate in the audit process for best results. As a physician, you are entitled to be paid for the services you provide when they are coded and documented appropriately. Physicians and practice staff with a strong knowledge of CPT codes and guidelines, the Resource-Based Relative Value Scale (RBRVS), as well as payer’s medical payment policy, contracts, fee schedules and reimbursement guidelines are invaluable to a successful audit.

Designate a practice staff person to be responsible for the audit process and consider hiring a consultant specializing in billing and collections to assist in specified audit tasks. The consultant’s contract should ensure confidentiality and compliance with the Health Insurance Portability & Accountability Act of 1996 (HIPAA).


What should be considered during the auditing


1. Determine who in the practice will be responsible for auditing the health plan payments. Assign staff, physicians and an outside consultant (if appropriate) to perform the audit.

2. Review the recommended OIG audit process previously referenced, and adapt it to your practice. Address concerns including:
* Will the audit be performed retrospectively or prospectively?
* What type and size of sample will be drawn: random, controlled, select payers, all payers?
*What audit tools will be used to determine the appropriateness of claims?
*What risk areas should be closely monitored?

The OIG recommends auditing five or more medical records per federal payer (i.e., Medicare, Medicaid), or five to 10 random medical records per physician. Additionally, the OIG suggests 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.Use a claim analysis checklist to identify the appropriateness of coding, documentation and completeness of a claim. Sample checklist items include:

* Was the service performed and documented appropriately?

*Are the correct physician and practice identification numbers listed on the claim?

*Is there a CPT code that would more accurately reflect the service performed?

*Is the appropriate modifier appended to the CPT code to more exactly reflect the service performed?

If this medical record was reviewed by an outside auditor who does not know the patient, does the record support the CPT codes selected?

4. The medical record should substantiate that each service provided by the physician 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. AMA policy defines medical necessity as:

“Health care services or products that a prudent physician would provide to a patient for the purpose of preventing, diagnosing or treating an illness, injury, disease or its symptoms in a manner that is: (a) in accordance with generally accepted standards of medical practice; (b) clinically appropriate in terms of type, frequency, extent, site and duration; and (c) not primarily for the economic benefit of the health plans and purchasers or for the convenience of the patient, treating physician or other health care provider.”

5. Ensure that the patient’s chart 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. Know which set of CMS E/M coding guidelines—the 1995 or 1997 version—the health plan follows under its medical review guidelines. (Note: Visit www.cms.hhs.gov to download the 1995 or 1997 CMS E/M guidelines.) All the required components of the E/M service must be met and appropriately documented in the medical record.

6. Compare the Medicare E/M frequency data for the practice’s state and specialty on which the payer may base its E/M audit with the physician’s E/M frequency data. Explain any significant variance based on patient population or other factors.

7. Identify and maintain a list of claims not accurately processed by the payer. Determine for each claim listed the practice staff’s internal follow-up action to prevent similar non-payments from recurring. New staff should be presented with this information before billing. Additionally, current staff should remain aware and routinely review this information.

8. Hold a meeting with the practice’s claims submission and auditing team, including physicians, to discuss any claims processing issues that can be resolved through staff and physician education or through the adjustment of the practice’s claims submission process. Document the practice’s efforts to improve its claims submission process.

9. Never stop improving the practice’s claims submission and auditing processes.

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