Random billing audits help ensure full payment
Go back to the fundamentals
Commercial and Medicare payers are becoming even more picky about the appropriateness of claim coding. In this atmosphere, "it is even more important that practices implement processes to ensure that physicians are getting paid in full for what they do," says Rebecca Anwar, a senior health care consultant in the Philadelphia office of the Sage Group.
Like many things in life, this means paying more attention to the fundamentals. And with billing, this translates into making sure the steps in the claims process are done correctly, from posting charges to final explanation of benefits.
"One way to do this is to perform regular random audits of your entire billing process to ensure your systems and controls are in place and working properly," says Anwar. "I recommend random audits be done quarterly and include at least 20 to 25 patients for each provi der which are tracked from the date of service through the entire process."
Steps in these random audits include:
• Appointment system.
Do you know if all your patients are being properly entered in the appointment system, including walk-ins, add-ons, and nurse visits? "This can be verified by matching your charge documents or superbills used the previous day with the appointment schedule for that day," says Judy Capko, another senior Sage consultant. "For instance, is there a charge document for each patient on the appointment calendar? What about the patients who were not in the appointment system?"
Do spot checks
Once all appointments have been documented for a given week, create a hard copy of that week. Then pull the patient charts for every fourth or fifth appointment on the schedule.
• Chart notes to charge slip.
Examine the chart notes for each patient to determine if the documentation matches the description of the service on the charge document. For example, the charge document may show the patient had a problem-focused exam, but the chart documentation could reveal a detailed examination with lab and X-ray done. If this is the case, are there results in the chart to substantiate that the ordered diagnostics have been completed? Are the diagnoses listed on the charge document also listed in the patient’s record?
• Charge slip to patient ledger.
Take the charge slip with a copy of the patient’s ledger from either your computer or your billing system and determine if all the charges were transferred from the charge slip into the accounts receivable system. Have all CPT and ICD-9 codes been entered correctly? Do the ICD-9 codes match the corresponding CPT codes? "You also will want to make sure any payments made at the time of service were entered into the system on the correct date and verify that the services were submitted, either electronically or by paper claim, to the appropriate third-party payer," says Anwar.
• Explanation of benefits (remittance advice).
Finally, review the explanation of benefits (EOB) for third-party payment on the date of service being audited. "The important thing here is to not assume the insurance company did not make an error in processing the claim," says Anwar. "Therefore, you want to check to see that all the services submitted for payment were considered by the insurer and any adjustments made by the payer were indeed appropriate. Finally, verify that an attempt was or is being made to collect any remaining monies due from either a secondary carrier or the patient."
• Analyze the findings.
Add up the number and kinds of discrepancies uncovered, along with their total dollar value. Then project these findings over the next year. For example, if you audited 20 out of 200 total patient visits for the week, the findings represent 10% of total visits. If the audit revealed just $90 in lost revenue, you would multiply this by 10 for a potential loss of $900 a week, $3600 a month, or $43,200 a year. "Even this relatively small amount of missed revenue can quickly add up to pay the salary of another full-time employee," says Capko.
• Pinpoint patterns.
Is there a common type of error being made, such as in diagnosis, service code, or date of service? Does one physician or one small group of physicians account for the bulk of the mistakes, or are errors evenly distributed among all providers?
What happened when
• Timing.
How long did it take between the time the data were originally entered and the claim was submitted? What kind and percentage of claims were returned for correction and had to be resubmitted? Are your insurance plans paying you in a reasonable length of time and in agreement with your contract? Are the payments posted promptly and correctly? After the insurance payment is posted, is the patient (or secondary insurance company, when appropriate) balance-billed promptly?
• Action plan.
"Naturally, you want the process to be perfect," says Anwar. "However, if the audit uncovers errors in more than 10% of your patient visits, you probably have a serious problem that needs to be immediately corrected," says Anwar.
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