Accurate medical coding plays an essential role in healthcare information management and overall quality of care. Medical coding audits, both internal and external, ensure that healthcare organizations have the proper policies and procedures in place to achieve quality medical coding.
Regular audits can reveal inaccuracy issues, such as outdated codes or even fraudulent billing. These audits provide a quality assurance process that helps organizations obtain proper reimbursement and maintain regulatory compliance. We compiled this guide to the importance of medical coding audits, showing how they can improve medical coding accuracy, to aid organizations seeking greater accuracy and accountability.
Although comparing your code distributions with those of others can help identify patterns, the only way to determine if your coding is appropriate is to compare it against the clinical documentation in the medical record. Practices should regularly conduct an internal audit to make sure what was billed and what was documented accord with each other and comply with Centers for Medicare and Medicaid Services guidelines.
For a coding audit, we advise pulling about five charts for each physician and reviewing the patient service and what was coded in the previous 30 days. Select charts randomly, but use a system, such as pulling every fifth or every 10th chart. In an internal audit such as this, do not review your own charts. It is best for a practice to have one individual conduct the coding audit for all physicians, using a standard worksheet or compliance tool developed for the purpose.
The person reviewing the charts may be a physician, a nurse, a coding specialist on your staff, or a reimbursement consultant. The audit should be repeated regularly—at least quarterly—to ensure new physicians are learning to code appropriately, to avoid slippage in coding and documentation patterns by experienced physicians, and to ensure everyone stays current with changes in coding rules.
While you conduct compliance audits, review the documentation for chemotherapy, such as the start and stop times for each medication and the nursing notes, as well as E&M documentation. Systematic under coding is often discovered through such a compliance audit. The argument has always been that if you downcode, no one can accuse you of fraud. But Medicare will whack you with noncompliance for under coding as well as overcoding, even though no fines are involved. You’re supposed to bill what you document—that’s the basic rule. You don’t want to bill a higher level than the work you actually did, but you can’t afford to undervalue it. If you’re billing incorrectly, that’s a fraud.
A coding audit can determine whether variations from national averages in the distribution of levels of service are the result of inappropriate coding or atypical levels of intensity among the patients seen in your practice. The results of the coding audit should be used to fix any problems identified.
For example, one physician may have a tendency to inadequately document the patient history, while another may need improvement in documenting decision making. In either case, education about appropriate coding is called for. Even if your practice has its own coding audit system in place, having it done periodically by a practice management consultant experienced in compliance is a good idea.
How often to audit medical coding can depend on any number of factors, including the size of the organization, the rate of staff turnover and regulatory updates. The experts recommend an external coding audit at least once a year, but many healthcare facilities commit to monthly external coding audits to reap as much benefit as possible.