The Joy Of Auditing

The Joy of Auditing

As unpleasant as the task may seem, a coding and documentation audit of your healthcare organization is the best kind of medicine to ensure a healthy bottom line for your revenue cycle.  If you are not consistently performing audits you could be making the same mistakes over and over.  Ouch!  Think claim rejections, lost revenue, payer audits, CMS sanctions.  Let’s examine what regular coding audits look like and what they can do for you. 

A strong auditing program supports:

• Protection against fraudulent claims and billing activity.

• Correction of problem areas before payers challenge claims.

• Prevention of RAC or ZPIC auditors from knocking at your door.

• Resolution of undercoding, overcoding, upcoding, and unbundling habits.

• Identification of payer errors.

• Discovery of lost revenue and underdocumented/poorly documented services

• Accurate casemix and reimbursement

• Accurate 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

• Creation of a vigorous culture of compliance

Build your auditing framework

• Establish your coding quality standards: 95% accuracy is the gold standard

• Establish your audit scoring process: Most organizations assign higher weights to errors that impact payment. 

• Retrospective or Prospective?

  • Coding audits can be performed after claim submission or on prebilled accounts.  Prebill audits require close attention to time constraints to prevent negative impact on accounts receivable. The upside is that no rebilling is necessary, and the learning opportunity is immediate.  Postbill audits allow more breathing room in terms of the auditing process, but then any needed corrections require rebilling and coder/provider education is sometimes delayed. Additionally, rebilling for higher reimbursement must occur within a certain time window depending on the payer.

• Select cases

  • Are you auditing a particular coder or provider, specific DRGs or diagnoses, selected surgical cases? Random audits include a selection from all chart types a coder has coded (or all encounters for a single provider within the audit timeframe).  Another sample selection method is to target a random sample of known high-risk areas and/or high-dollar charts.  For example, a particular coder has coded 40 accounts to DRG 091 over the auditing timeframe.  5 are selected at random for review.  A provider has billed out 200 level 5 office visits, and 20 are randomly chosen for audit.  Analysis of recent payer denials is an excellent jumping off point for these more targeted studies.

• 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?  Do you have OIG-approved software tools to assist in the auditing process?

• Report findings:

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

• Deliver coder and provider education:

  • Once you’ve identified problems, take steps to correct them.

• Rebill when possible

• Self-report if required

• Re-audit to ensure improvement

Celebrate the good stuff

Auditing internally with an educational intent and positive approach grows coder confidence. Let coding staff know what they are doing right.  Approach errors in a positive way that encourages professional growth.  Ok, this may sound trite, but the coders I know, myself included, are lifelong learners who always want to know more about their profession, from technical coding skills to pathophysiology to pharmacology.  We are just a curious bunch of folks!

Educate

Implement a no-surprises auditing methodology. Coders should know when audits occur and understand that their purpose is to identify learning opportunities.  One coder may only make an occasional mistake while another may have developed poor habits over time that impact coding quality, yet both coders will appreciate when their errors are caught and corrected, especially when education and is the objective.

Ensure compliance

CPT, ICD-10 and HCPCS code sets are updated and published annually so the need to audit for compliance is continual — and that’s without even mentioning the time-consuming task of keeping up with Medicare and other payers’ medical policies.  Hiring an external auditor for coding compliance will uncover any issues with current regulations so they can be corrected or prevented proactively. An external audit reduces the risk of improper documentation and mistakes, minimizes the risk of fraud and ensures that Medicaid and Medicare standards are being met.  The OIG recommends 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 this 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.