Audits: Friend, not Foe

From the Field

Around 20 years ago I took a course from a local college that was designed to teach students to be medical office specialists. At the time, this meant I would be able to work at a front desk, as a certified medical coder or as a medical biller. When I began working as a medical biller, I realized that the course I had taken only gave me a comprehensive medical terminology overview, a better understanding of anatomy, and not a whole lot about how to be a successful medical biller. One thing our billing instructor drilled into our heads was that audits were terrible, scary, heartburn-inducing events that we should avoid at all costs. I carried that phobia of audits around with me until I began performing internal audits for my employer, where I learned what a helpful tool a proactive audit could be.

One of the tenets of medical billing is that you only bill for services rendered. Related to this tenet is “if it is not documented, it did not happen.” These two tenets (along with many related rules and regulations that govern medical documentation and coding standards) guided the internal audits I performed. Reviewing billing entries and comparing them to medical records is incredibly tedious work, and it can be difficult to sit down with the individual you have audited and review their errors. The best part of an audit is using it as a tool to identify areas for process improvement and potential increases in revenue.

Why Perform and Audit?

During my time at Sceptre Management, I have been fortunate to have the opportunity to hone my auditing skills on internal employee audits as well as many diverse types of audits for our clients. Aside from being well prepared for an audit by Medicare or another entity, there are many ways practices and dialysis facilities can benefit from an internal or third-party audit.

Audits help analyze coding and documentation to provide feedback of the practice’s current work to revenue capture ratio. An audit may determine that a practice’s documentation and code selection is adequate, leaving the practice with confidence that they would do well in a payer audit. An audit may also reveal opportunities for providers to improve their code selection based on their documentation to maximize revenue.

Types of Audits

There are many types of audits that are relevant to nephrology practices and dialysis facilities. Here are some of the most common:

  • General Audit
    • General audits provide an overview of the documentation and code selection for the entire practice. These audits can be either prospective (before billing takes place) or retrospective (after billing takes place). Performing a general audit retrospectively helps to identify problems with payer reimbursement and denials. General audits provide an overview of the entire practice and may identify areas of potential education.
  • Provider Comparison Audit
    • Provider comparison audits are helpful to ensure all providers in the practice are complying with documentation and coding requirements as well as capturing all available revenue.
  • Service Specific Audit
    • A service specific audit is a great tool to use when a nephrology practice begins providing a new therapy or service to its patients. This type of audit focuses on the relationship between the diagnosis, service, documentation, and resultant claims, ensuring medical necessity is demonstrated and billing is compliant.
  • Focused Audit
    • Focused audits are usually performed after a general audit or provider comparison audit identifies an area of potential improvement. Focused audits are designed to hone in on a particular area of concern and help identify effective corrective measures.

Audit Frequency and Auditor

The best practice for general audits is to conduct them annually. However, depending on the specific nephrology practice or dialysis facility, bi-annual audits may be more beneficial. In the event an audit uncovers a concern with a provider or service, regular audits should be used to verify the efficacy of education and corrective actions taken to address the concern.

In the event you opt to perform an internal audit using your existing staff, the individual selected as the auditor should have familiarity with documentation requirements and coding guidelines. It is also helpful for your selected auditor to be detail oriented and possess organizational skills. There are companies a nephrology practice or dialysis program can hire to perform these types of audits. When deciding on a company to audit your practice, it is helpful to look for a company that not only has staff who are licensed coders and medical auditors but also experience in your practice’s specialty and good references.

Sarah Tolson is the director of operations for Sceptre Management Solutions, Inc., a company specializing in billing for outpatient ESRD dialysis programs, nephrology practices, and vascular access. Your questions are welcome, and she can be reached at [email protected], 801.775.8010, or via Sceptre’s website,