Common Questions About Medical Billing Audits

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medical billing audit

Billing accuracy and compliance are crucial to ensuring your medical practice can continue to operate. One of the most effective ways to ensure that your practice is following legal billing guidelines is to conduct a medical billing audit. In this article, we will answer common questions about medical billing audits and explain how they are performed.

What is a Medical Billing Audit?

A medical billing audit is a comprehensive review of medical claims, coding practices, billing procedures, and documentation within your practice. The purpose of an audit is to ensure that your billing practices comply with legal and regulatory requirements, including those specified in HIPAA and with contracted insurance payers. During an audit, you will thoroughly examine your billing records to identify any errors, discrepancies, or potential cases of fraud or abuse within your practice. While many believe that such issues do not exist within their practices, mistakes can happen, and it is always better to be safe than sorry.

Frequently Asked Questions About Medical Billing Audits

Who Performs a Medical Audit?

Medical billing audits can be conducted by internal staff within a medical practice, outsourced to a specialized auditing firm, or facilitated through the use of technology platforms designed for auditing purposes. The choice of who performs the audit depends on your practice’s resources, expertise, and specific needs.

In addition to audits conducted by the practice, there are external audits that can be performed by government agencies or payers. We will discuss this further in the next section as we explore what happens if your practice chooses not to conduct an audit.

What Happens If You Don’t Perform a Medical Billing Audit?

If you don’t perform a medical billing audit, you leave your practice vulnerable to several consequences:

  • Financial Loss: Billing errors, inaccurate coding, or fraudulent practices can go unnoticed without proper checks, leading to financial loss. Failure to identify and rectify such issues can result in claims being denied or underpaid, which can have a significant impact on your practice’s financial health.
  • Increased External Audit Risk: Regular audits are crucial for your practice to avoid external audits from government agencies or payers. If your practice is suspected of having serious billing violations that have not been addressed, these agencies will conduct their own audits. These audits can be time-consuming and resource-intensive, taking away attention and resources from patient care and revenue generation. In the worst-case scenario, your practice may face penalties.
  • Legal and Regulatory Penalties: It is important to conduct audits to avoid missing any illegal billing mistakes. Failure to comply with legal and regulatory requirements can lead to severe penalties and legal actions. This includes violations of HIPAA regulations, fraudulent billing practices, or failure to follow payer-specific guidelines. The consequences of non-compliance may include hefty fines, loss of provider licenses, and even criminal charges.
  • Damage to Reputation: Inaccurate billing practices, whether intentional or not, can damage your practice’s reputation. Patients, payers, and referral sources expect accurate and ethical billing processes. Failure to meet these expectations can erode trust and lead to a loss of patients and referral opportunities.
  • Inefficiencies in Revenue Cycle: Medical billing audits help identify inefficiencies in the revenue cycle management process. Without audits, ongoing issues such as claim denials, delayed payments, or inadequate billing and coding practices may persist, hindering your practice’s financial performance.


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How Often Should You Perform a Medical Billing Audit?

The frequency of medical billing audits may vary depending on factors such as the size of your practice, the volume of claims, and regulatory requirements. For example, a large practice that works with multiple payers and employs in-house billers may opt for biannual audits due to the complexity of claim processing and the involvement of various individuals. On the other hand, a smaller practice with fewer staff members may suffice with an annual audit. Regardless, it is recommended to perform audits on a regular basis, such as quarterly or annually, to proactively identify and address potential issues.

How Do I Perform an In-House Billing Audit?

The medical audit process involves several steps, beginning with assembling a review team and selecting a sample of medical claims to audit. The claims are then carefully reviewed for accuracy, mistakes and discrepancies are logged, and audit findings are organized in a report. It is crucial to review these findings with staff and create a plan to address any deficiencies identified. For a step-by-step on performing medical audits, read our article on How to Audit Medical Claims.

Medical Audit Assistance

Consider using reliable software to streamline the medical billing audit process and ensure accuracy. Apex EDI is a leading clearinghouse platform that can help you organize all claims and documentation, providing an organized claims trail for efficient review during audits. With accurate reporting capabilities, Apex EDI can help identify common billing errors and improve procedures.

By eliminating manual data entry and expediting the claims process, the platform reduces stress and improves efficiency, allowing staff to focus on patient care. Apex EDI ensures compliance with regulatory guidelines and payer-specific requirements through regular updates and monitoring. By utilizing Apex EDI’s services, medical practices have experienced improved audit results, with fewer errors and discrepancies.

If you’re interested in learning more about Apex EDI, schedule a demo today.

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