Medical Billing and Coding Auditing Service

Medical billing and coding audits are vital part of the overall billing and coding process. Ensuring billing and coding is as accurate as possible plays an essential role in the prevention of fraud as well as the quality of care. Audits also exist to make sure that the proper procedures and processes to enable quality medical coding are in place and adhered to.

As with any type of audit, the end goal is to establish a quality assurance process that helps an organization operate effectively and efficiently. Mistakes even in the most buttoned-up processes are inevitable. Conducting frequent audits will assist with identifying where these mistakes are happening most frequently so gaps in the process can be fixed or eliminated.

What is a Medical Billing and Coding Audit?

Typically performed by a third-party certified medical coding specialist, medical billing and coding audit thoroughly examine and evaluate the entire billing process within a medical practice.

While third-party services are best used for audits as they provide an objective view of the process and may be more advanced in their knowledge and expertise, many organizations use internal auditors for this process as well.

Audits are performed by reviewing randomly selected patient medical records. The auditor will evaluate the procedural and diagnostic codes determined by physician documentation for completeness and accuracy, as well as many other factors.

Results from audits are documented in terms of accuracy. Accuracy rates of 95% or higher are highly recommended.

The Benefits of Regular Audits

Whether you use a third-party or internal resources for your medical billing and coding audit process, it is recommended to audit your processes at least once per year to ensure you are maximizing your reimbursement for the services you provide by reducing costly errors.

It is important to view audits as a benefit, and not designed to tear down the work of medical coders or get them in trouble. The ultimate goal of the audit is continuous improvement, and everyone in a role connected to the billing and coding process can contribute to this mission.

In addition to these internal benefits of audits, there are external benefits that can be achieved as well:

• Preventing fines and investigations by identifying where regular errors may be occurring
• Reducing rejection and denials of claims
• Maintaining compliance with updated laws, regulations, and guidelines

Billing and Coding Errors and the Consequences

While many billing and coding errors are unintentional and a result of inexperience or innocent mistakes, there are occasionally bad actors who are engaging in fraudulent practices that can mean severe penalties and consequences for the individual as well as the medical practice.

• Upcoding

Upcoding is defined as assigning an inaccurate billing code to a medical procedure or treatment during the submission of claims to increase reimbursement. This means exaggerating reporting including but not limited to a more serious, and expensive, diagnosis or procedure than what was actually diagnosed or performed.

Most commonly, this involves using higher level codes for follow-up office visits or consultations. When reported appropriately, codes for these visits are categorized based on factors including the duration of the examination the doctor has with the patient, and the complexity of the medical condition.

If discovered, upcoding is considered a severe form of medical fraud if it is found to be intentional and in a repeating pattern meant to receive higher reimbursement rates. Disciplinary measures have a wide range of consequences, depending on severity.

Cases of this practice can result in fines of up to $250,000, with the most severe resulting in permanent or temporarily loss of insurance privileges and/or medical practice license, or even incarceration of up to five years as stated under the False Claims Act.

• Downcoding

On the flip side, downcoding is defined as designating a medical procedure or insurance claim with a lower value in order to lower the reimbursement rates.

You may be wondering why anyone would want to receive less reimbursement, but many instances of downcoding may be unintentional and the result of inexperience or incompetence. However, it may also be intentionally practiced to evade audits by the payers or to avoid providing supporting documentation.

A common downcoding practice involves diagnosing diabetes. In these instances, providers choose the lowest level “diabetes without complications” or sometimes even prediabetes. Correct coding may require the provider to document the type and method of control and treatment plan, which is exactly what they are trying to avoid.

To protect providers from financial and compliance consequences, coding specialists should avoid downcoding at all cost if another code more accurately describes the performed services.

The lowered reimbursement rate caused by downcoding not only leads to reduced revenue but can also flag an audit by insurance companies which may lead to more severe legal actions. If found to be intentional, downcoding may violate the False Claims Act, Anti-kickback Statue, Physician Self-Referral Law (Stark Law), or the United States Criminal Code, all of which make it subject to prosecution.

Why choose PMN to conduct your Billing audit?

Many providers avoid or postpone medical billing and coding audits due to the time and financial burden that they can often require. If already suffering from reduced revenue concerns, it becomes an easy corner to cut. However, many options are available that can meet the current needs of the business as well as ensuring long-term compliance.

Our certified medical coders will evaluate your practice and customize a plan that best serves your needs. We will design a customized plan to meet your objectives, while staying within a reasonable budget that you can agree on.

Investing in regular audits help you maximize revenue and keep your business running smoothly for years to come.