why you should perform coding audits

Have you ever taken music lessons? I did for years as a kid, practicing new pieces on the piano every week. Thank Beethoven that I had an awesome teacher who applauded my successes, identified my weaknesses, and brought me along consistently so that my skills improved. Imagine if I had no teacher and played the same piece over and over, hitting the wrong notes or getting the time signature wrong.

As coders we all need that wise teacher who knows our strengths and weaknesses and can help us excel at our work. If you are not consistently performing coding audits in your organization, you could be making the same coding mistakes over and over. Ouch! Think claim rejections, lost revenue, payer audits, CMS sanctions. Let’s take a look at what regular coding audits look like and what they can do for your organization. 

All audits start with a basic framework: 

• Establish your coding quality standards

• Select cases: Are you auditing one particular coder or provider, specific DRGs or diagnoses, selected surgical cases?

• Review cases: Use your internal resources: do you have an in-house coding quality assurance expert, manager or coding educator who can perform the audit? Will you outsource to a reliable vendor?

• Report findings: Tailor your reporting appropriately-coders and providers need detailed feedback, and your C-suite needs the 10,000-foot view.

• Provide coder and provider education: Once you’ve identified problems, take steps to correct them.

• Rebill when possible: The ability to rebill is a huge benefit of frequent auditing

• Self-report if required

• Re-audit problem areas to ensure improvement Frequent regular coding audits support:

• Accurate case mix and reimbursement

• An accurate reflection of risk of mortality/severity of illness measures

• Medical necessity of services

• Appropriate resource consumption and length of stay

• Improved provider profiling and scorecards (PEPPER, PQRS, Healthgrades)

• Contract negotiations

• Decreased claims rejections and denials

• Creation of a vigorous culture of compliance

Per the OIG:

“It is incumbent upon a health system’s corporate officers and managers to provide ethical leadership to the organization and to assure that adequate systems are in place to facilitate ethical and legal conduct.”

“Adequate systems” includes monitoring your current practices, identifying and addressing your problem areas. 

The OIG recommends that a facility or practice conduct a baseline audit that covers one full quarter and includes a random selection of 5–10 Medicare/Medicaid charts per provider who receives financial reimbursement from CMS.

Starting from the OIG’s baseline, you should then customize your audit plan to suit your organization’s needs and move forward with regular frequent auditing.

the bottom line

Part of doing good business is identifying problems and resolving them quickly, so audit often and audit well to ensure your coding department holds up to regulatory scrutiny and positively contributes to your organization’s revenue cycle.