Article - Why You Should Conduct Medical Billing Audit?

What is Medical Billing Audit?

Medical billing audit is a planned process that examines and evaluates the effectiveness and reliability of clinical documentation and the overall medical billing process. This process thoroughly checks all health records maintained by the practice and reviews medical billing data submitted to the payers to ensure that the practice identifies, monitors, and corrects inappropriate billing practices.

When going through a billing audit, the practice may be asked to provide clinical records, which may include medical records, x-rays, and lab reports; financial records such as entered charges, explanation of benefits (EOBs), and accounts receivable ledger; and policy-related documentation as required by providers or the government.

Audits can be conducted either before claims are sent out to the payers (prospective) or after the fact (retrospective). Some practices follow the rule of conducting new provider audits prospectively, and current provider audits retrospectively.

Scope of Medical Billing Audit

Medical billing audits have a more comprehensive approach than coding audits. Medical billing audits cover all the areas of the medical billing life cycle starting from insurance verification processes, ICD and CPT Coding, claim submission process, payment posting process, follow-up processes, and denial management processes. Medical billing audits are specific to coding and billing only and do not include the level or scope of care, medical necessity, pricing structure, or items or services delivered by providers.

Advantages of Medical Billing Audit

Coding compliance:

Billing audits provide a way to identify and correct problem spots before the government or insurance payers challenge inappropriate coding. You can rely on billing audits for identifying inaccuracies, providing instructions on ways to correct issues, building confidence among the coding staff, and ensuring to use of up-to-date procedure codes. Those conducting the audit can identify areas where staff education and training are needed to make sure that proper coding protocol is always followed.

Administrative Benefits:

The administrative staff benefits from medical billing audits by confirming that claims are true and accurate and are correctly submitted. Audits set the standard for the office staff and spare them unnecessary frustration by creating a positive, stable work environment and culture of compliance that attracts and retains talented personnel. Under-coding, code overuse, improper unbundling habits are replaced with appropriate billing for commonly documented procedures. When policies and procedures are set in place and followed correctly, the chance of a visit from an external auditor decreases significantly.

Ensure compliance:

Through medical claims audits, the practice is protected against fraudulent billing activity and claims. With help of billing audits, practices can easily verify compliance with ICD-10-CM, incorrect payments are reduced or eliminated. The audit may identify reimbursement deficiencies and reveal ways in which the practice varies from the national average due to inappropriate coding. Thus, areas for increased reimbursement may be revealed and, in turn, boost revenue. Additionally, the practice benefits when files are processed efficiently, improper payments are reduced and claim payment is optimized.

Better relation with insurance carriers:

An improved relationship with payers is another perk of a medical claims audit. Payers appreciate it when claims are submitted accurately. An audit will reveal any outliers that allow the practice to identify any problems before a large payer identifies a problem and requests an external audit. 

Better patient care:

Medical claims audits contribute positively to improved patient care. By tracking and monitoring services and procedures and educating physicians on providing patients with positive medical experiences, the focus of the entire practice shifts to the quality of care provided. When patients have a better experience, the result is a smoother revenue cycle and better patient outcomes.

Need of External Audits

Medical billing audits can be conducted either by internal or external auditors called internal and external audits respectively. Internal audits are precisely what they sound like, an audit performed by an internal, billing, and coding team. Larger organizations might have a dedicated internal audit group, giving them the key benefit of performing audits on an ongoing basis. Frequent auditing provides the organization with information that allows for continuous improvement in processes and accuracy.

External audits can be an excellent option for a small, busy practice. They provide insight that eliminates conflicts of interest and spots upcoding without regard for its impact on revenue, something that internal auditors with even the best of intentions might miss. There’s also the added benefit of recommendations carrying more weight when they come from an external source.

External audits, though, aren’t a clean substitution for internal. Even organizations that conduct ongoing internal audits should have an independent, external audit performed annually. Overall, small practices might find it useful to lean on one of the many companies that specialize in external audits, especially if they don’t have the resources to conduct consistent periodic internal reviews.

Just receiving reimbursements against submitted claims is not sufficient. Each and every revenue cycle activity must be audited properly to avoid any inefficiencies or malpractices. Medical Billers and Coders (MBC) can assist you in conducting external audits as per your medical specialty. As a medical billing company, we provide all revenue cycle services including external audit. To know more about our medical billing audit services, contact us at

Published By - Medical Billers and Coders
Published Date - Dec-07-2021 Back

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