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Tip: Conduct a worthwhile internal billing/coding audit

Healthcare Auditing Weekly, February 20, 2007

Last week we covered four reasons to get your team involved in annual billing and coding mini-audits. This week we will provide the steps you can take to see those audits are carried through.

Step 1: To conduct an audit, pull 10 random patient charts from a specific date of service three to six months ago. This allows adequate time for insurance processing and receipt of third-party payment. Break the staff into teams of two and have each team review at least five of the charts.

Step 2: Ask both teams to document any discrepancies as they track the service and its codes through the chart, charge slip, computer record, insurance form, and explanation of benefits (EOBs) finally received. After the teams finish their reviews, have them analyze the results for any patterns.

Step 3: Ask the teams to calculate the potential cost of the errors for a 12-month period. Also ask them to identify errors they fear represent possible overcoding or overbilling, and the reasons why the claims may be wrong. EOBs that show consistent downcoding, such as those with bundled services, also may signify a serious problem. Discontinue any such coding situations at once, conducting an in-service training session and monitoring for compliance. Finally, have the teams make specific recommendations on how to correct the deficiencies for the practice's long-term benefit.

Perform the above steps to avoid falling into common pitfalls, which can include unjustified insurance write-offs, missing dictation, wrong diagnoses, service overcoding, improper unbundling, and missed hospital charges.

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