Use Random Audits to Find Payment Problems
Fam Pract Manag. 1998 Jun;5(6):16-18.
As you contract with more managed care plans and begin to see your adjustments climb, you need processes to help ensure that your practice gets paid for the work you do. One step your practice can take is to conduct periodic random audits of your reimbursement systems and controls.
Random audits should take place quarterly and include at least 20 patients per provider. For each patient, work with your staff to track all the reimbursement paperwork related to a date of service. Begin by ensuring that charges are posted, and end by reviewing your claims processing and the explanations of benefits (EOBs) from your insurers.
But before beginning an audit, find out whether all your patient encounters are entered into the appointment system, including walk-ins, add-ons and nurse visits. You can verify this by comparing your charge slips or superbills from a given day with that day's appointment schedule. Do you have a charge slip for each patient in the appointment system? Do you have an appointment to match each charge slip? Once you're sure the appointments and charges match up, you're ready for a self-audit.
Steps in a self-audit
First, produce a hard copy of your schedule for a given week. Select a manageable sample of the appointments — for example, every fourth one — that will include several patients from each day. Highlight those patients' names and pull their charts.
Then examine the chart notes and see whether the documentation matches the service listed on the charge slip. For example, the charge slip might indicate that the physician performed a problem-focused exam, but the chart notes might reveal a detailed examination, lab services and X-rays. If the chart shows lab services and X-rays were ordered, are the results in the chart, proving the diagnostics were actually performed? Are the diagnoses that appear on the charge slip also listed in the patient's record?
Next, compare the charge slip with a copy of the patient's ledger. Make sure the charges were transferred from the charge slip into the accounts receivable system. Verify that all CPT and ICD-9 codes were entered accurately and that they correspond with each other correctly. Make sure that payments at the time of service were entered into the system on the correct date. Then verify that a claim for the services was submitted to the appropriate third-party payer. The last step is to review the payer's EOB. Don't assume the insurer didn't make an error in processing the claim. Confirm that the insurer considered all the services you submitted. Scrutinize the EOB to confirm that any adjustments were appropriate. Finally, verify that your office has collected (or is trying to collect) what's owed by a secondary insurer or the patient.
Analyzing your results
Tally up the dollar value of the discrepancies your audit reveals. Then use this amount to project the financial impact of reimbursement-related errors in your practice. For example, an audit of 20 patient visits (one-fifth of 100 visits in a week) reveals $90 in lost revenue. Multiplying this amount by five shows a potential loss of $450 a week, or $1,800 a month, for that provider alone.
Your next step is to assess the types of errors being made. Work with your staff to watch for recurring mistakes and common threads so you will know where to target your effort to prevent more errors. Is one physician the primary culprit, or are the mistakes distributed among several doctors? Do errors occur most often in one particular aspect of record keeping, such as the diagnosis, service code or date of service? Is information often missing or incorrect?
To maximize the quality-assurance value of your audit, scrutinize dates for acceptable time spans. What's the average length of time between data entry and claim submission? Were any claims returned for correction and resubmission, eating up valuable staff time and delaying payment? Are your insurers following their contracts and paying you in a reasonable amount of time? Are the payments posted promptly and correctly? After the insurance payment is posted, is the balance promptly billed to the patient or secondary payer? You may need to communicate clearly to your staff what time spans are acceptable.
Reasonable expectations and actions
What error level is unacceptable, and what should you do about it? Obviously, you want 100 percent of what's due to you, but settling for 95 percent may be more realistic. If you find that errors are costing you revenue, you need to ensure that the physicians and staff understand how seemingly small mistakes can add up. If you find that problems lie with those outside your practice, you'll want to take corrective action.
If you find errors in more than 10 percent of audited visits, you have a serious problem that needs a well-organized solution. It's important to identify the source of the problem without creating a climate of defensiveness in your practice. You may find it helpful to bring in an outside billing specialist to examine and streamline your reimbursement procedures and develop tools to reduce the likelihood of errors.
Whatever its source, your solution needs to involve the entire staff. When the whole team supports the billing process, your practice will get results. In a reduced-fee-for-service environment, this is one of the best ways to increase your profitability.
Copyright © 1998 by the American Academy of Family Physicians.
This content is owned by the AAFP. A person viewing it online may make one printout of the material and may use that printout only for his or her personal, non-commercial reference. This material may not otherwise be downloaded, copied, printed, stored, transmitted or reproduced in any medium, whether now known or later invented, except as authorized in writing by the AAFP. Contact email@example.com for copyright questions and/or permission requests.
Want to use this article elsewhere? Get Permissions