Medical Billing Audits are essential for healthcare organizations to review the processing of billing claims to maintain compliance. Billing professionals and compliance officers conduct audits to detect billing errors and prevent fraud, claim denials, and revenue loss. According to a report, physicians lose $125 billion in total revenue each year due to billing errors. Such a significant loss underscores the importance of regular audits to help healthcare providers minimize financial risks. 

Measuring accuracy, managing resources, controlling budgets, and exploring possibilities are the major purposes of billing audits. Specialized billing companies provide unbiased insights into billing processes. Helping healthcare organizations to improve revenue capture and avoid payer penalties. 

Preventing Errors and Denials with Medical Billing Audits

Catching billing mistakes is highly challenging for medical practices without the assistance of billing professionals. Because it requires technical expertise, even minor errors can lead to billing denials. Similarly, resolving these errors requires a specific amount of time and energy. Inspecting billing mistakes and processing claims are not the primary job roles of medical practices. As a result, the attention diversion of healthcare staff, such as physicians or nurses, directly impacts patient care. To deal with such challenges, professional services provide essentail support while effectively resolving billing challenges:

Setting clear audit goals

Professional billing audit service providers set clear goals to identify weaknesses in the system and improve control. Ensuring accurate documentation, managing risks, and compliance with regulatory laws are the basic goals. Identification of common medical billing errors, such as incorrect patient information, enables medical practices to comply with payer rules. It makes billing audits more effective while improving accuracy and reducing claim denials.

Check on regular coding practices

Checking coding practices is an essential part of a professional audit. However, it requires a well-planned and consistent approach. Because billing codes frequently change. In this process, professional billers guide medical practices about updated billing codes. Moreover, they identify common coding errors such as the use of incorrect modifiers, upcoding, or downcoding. Accurate billing codes and regular coding audits help practices stay compliant, prevent claim denials, and increase revenue. Moreover, professional billing companies also offer staff training, updating healthcare staff about the latest coding rules and payer requirements. A combination of staff training and effective resource monitoring supports accurate billing and more substantial revenue.

Sample Audits and Standardized Documentation

To catch billing mistakes in healthcare, professional auditors regularly check a small portion of regular claims. It allows medical practices to identify recurring denied claim patterns. So they can make quick fixes. Healthcare organizations must conduct billing audits monthly or quarterly to identify system issues and improve profitability.

Audits may target some specific services, such as high-volume areas, or may randomly review 5% or 10% of claims. Moreover, in billing audits, the auditors also ensure that medical records support the services. They use consistent Electronic Medical Record (EMR) templates with accurate dates and signed clinical notes. Such processing ensures smooth operations and efficient handling of claims.

Regular internal audits develop a strong structure for a healthcare organization. These play a significant role in improving routine operations. Enabling healthcare professionals to catch errors at early stages and minimize the risk of external audits. At the same time, proactive internal audits save healthcare organizations from intimidating external audits by regulators.

Internal audits provide detailed insights into the entire billing process. It helps medical practices to identify where compliance risks and  errors most likely occur. The information helps medical practices to improve accuracy and maintain compliance with regulatory standards. Let us discuss the top 10 common billing errors that consulting firms highlight during medical audits.

Top 10 Frequent Billing Errors

Audit findings in medical billing help medical practices improve their workflow. These enable them to catch the errors and fix them in time before they cause serious damage to their organization. 

1. Incorrect E/M Code Selection

Medical billers use Evaluation and Management (E/M) codes to describe the level of care practices delivered. With the help of these codes, insurance companies also analyze records and decide the reimbursement amount. Mistakes in these codes may lead medical practices to financial imbalances.

Errors often occur when medical or billing staff select the wrong code that does not match the patient’s condition. For example, when they submit high-level claims without proper supportive documentation, that is upcoding. With this,  medical practices may receive more than the actual amount. But it also increases the risks of audits, compliance issues, and fines. On the other hand, when billing staff use low-level codes that cause downcoding. It can cause significant revenue loss to medical practices.

2. Incorrect Patient Demographics or Insurance Data

Medical practices must enter the correct patient details while submitting claims. Minor claim errors, such as incorrect patient ID and wrong patient’s date of birth, can significantly increase billing problems. Such billing errors lead to claim rejections, payment delays, and a slowdown in cash flow for medical practices. 

Medical billers or healthcare staff must double-check patient information before claim submission to avoid this error. Healthcare organizations can also use advanced AI tools to automate claim submission that automatically highlights claim errors while submitting claims. Implementation of precautionary steps and using advanced tools prevents claim denials while keeping the entire process smoother.

3. Misuse of Modifier 

Medical practices use modifiers to enhance clarity in the details of medical services. These modifiers help insurance companies to understand the difference between two services or procedures. Such an explanation of services becomes essential because these are often delivered on the same day. Errors in modifiers are common in medical billing because each has a specific rule. Similarly, these are complex to understand and create confusion for medical practices. They often use wrong modifiers, forget to add one, or add one that is not required. Such errors increase compliance risk and impact the overall revenue of the organization.

Healthcare professionals must follow the National Correct Coding Initiative (NCCI) guidelines to prevent incorrect coding and overbilling. It helps medical practices to process accurate claims and avoid payment delays.

4. Missing Clinical Documentation

Insurance companies ask for complete clinical documentation to support their claims. When medical billers or healthcare practices fail to provide the essentail and required documents, the chances of claim rejection increase. Errors regarding missing clinical documentation often occur because the compilation of data is not simple for healthcare providers. It requires a significant amount of time and effort. Missing and incomplete notes increase the chances of claim denials. Therefore, healthcare professionals must review documents before claim submission.

5. The use of non-specific codes

Billing codes frequently change, and each procedure and treatment has a specific code. Most healthcare staff are not aware of the latest and updated codes when they manage billing on their own. So often errors occur regarding using wrong, outdated, or non-specific codes.

The chances of claim denials increase when codes do not match the service or when practices use outdated codes. 

Medical practices must provide training to their staff and provide them with information about the latest coding updates. So, they use the right code for the right treatment. 

6. Unbundling of Services

Many errors occur during the unbundling of services because it is a highly technical area of the medical field. To manage this, healthcare practices need expert medical billers. In this, the practices bill two services together under a single code. Mistakes often occur when practices do not recognize which procedures belong to one bundled code. Such errors lead to overbilling, compliance issues, and possible payment reversals during audits.

7. Failure to Obtain Prior Authorization

In many treatments, healthcare providers must get approval from insurance companies before offering care. But many times it happens that healthcare professionals skip this step. They miss this essential step for different reasons, such as system limitations, high workload, or complex insurance rules. In audits, it appears as a missed requirement leading to claim denials or delayed payments. 

Verifying prior authorization before delivering services is the key solution to prevent this error. Medical practices must integrate authorization checks to avoid claim denials.

8. Duplicate Billing

Duplicate billing frequently occurs because medical practices sometimes accidentally bill the same service.  Moreover, system glitches, manual entry mistakes, and a lack of proper checks in the billing workflow are the reasons behind such errors. Such mistakes cause revenue loss and also raise concerns about the credibility of a company. Medical practices must integrate the advanced software to prevent such errors.

9. Telehealth Billing Mistakes

Insurance companies ask healthcare practices to tell about if they treat their patients virtually. It also requires special codes. Sometimes, insurance companies deny the claim when the practices miss the telehealth indicator. Healthcare practices must set up EHR templates and use payer-specific billing guides to ensure the right coding of telehealth visits. The digital health record forms automatically fill the correct modifiers and POS codes for virtual visits.

10. Non-Compliance with CMS Regulations

Noncompliance with Centers for Medicare & Medicaid Services (CMS) guidelines occurs because healthcare staff often overlook small but important details. To ensure compliance with CMS and payer rules, medical practices must prove the medical necessity of service. For this, they must provide the information about the time they spent on a service. Moreover, they must use the right billing codes. To avoid medical billing compliance issues, medical practices must follow some steps, such as obtaining patient consent. Moreover, they can use EHR timers to ensure accurate documentation.

How to Prevent Billing Errors?

Healthcare practices must take some essentail steps to prevent billing errors and optimize cash flow. Here are a few techniques that can significantly help in reducing claims denials, maintaining compliance, and protecting revenue:

• Regularly conduct staff training to enhance their awareness of the updated codes and payer rules. The training also helps them to improve collaboration and optimize workflow.

• Leveraging advanced technology, such as advanced EHR tools, claim scrubbers, and real-time eligibility checks.

• Ensure proper documentation of all services and justify code level and supporting modifiers. 

• Conduct internal audits regularly to review high-risk areas and analyze denial patterns.

• Outsource Revenue Cycle Management (RCM) responsibilities to a trustworthy medical billing company. Professional services save time and energy for healthcare staff and ensure timely payments. 

Conclusion

Effective RCM management requires detailed attention and a better understanding of regulatory requirements. Always keep your medical practice prepared for external billing audits. Ensure accuracy and develop the credibility of your organization. Implement the advanced and latest techniques to prevent the occurrence of common billing errors. Outsource medical billing processes because in-house management is time-consuming and diverts the practice’s attention from patient care. Professional billers help medical practices in reducing administrative burden and, amazingly, maximize revenue.

You can rely on Physicians Revenue Group, Inc. as your trusted medical billing outsourcing partner. The team of experts ensures the timely submission of your claims, regularly conducts internal audits, saving you from hefty penalties. Helping you to focus on patient care and prioritize it over administrative tasks while maintaining efficiency and compliance.