Medical billing services are critical in ensuring the excellent revenue integrity of the medical organizations. Coding and billing teams work together to deliver the best results in terms of maximization of revenue.
The teams often evaluate their performance based on the RCM KPIs like denial rates and net revenue collection. However, if your clean claim rate has not decreased over a few months, does that mean you should stop worrying about its outcome in the upcoming days?
The medical industry is walking on a pretty thin rope in profitability. Some organizations have even been forced to shut down due to recurring losses, and others are trying hard to stay afloat in these challenging times. Every penny counts in this situation, and you need to be aware of the loopholes in your current workflow.
Even if all RCM KPIs show promising results, only through regular audits can you truly determine the quality of your workflow. Read on to know why regular audits are crucial in medical billing services and how you should approach the issue.
Issues highlighted by Audits
Medical billing services ride on their efficiency of workflow. Performing regular audits on medical billing services can highlight the exact pain points causing your revenue flow not to grow.
But apart from revenue flow, other issues need your attention, which could damage the organization’s credibility if left unattended. Here are a few things that an audit can help identify:
- Compliance Loopholes:
Auditing can often reveal continued upcoding practices or downcoding in an organization. Sometimes the coders might not be up to date with the regulations, leading to frequent upcoding and downcoding issues.
They are considered criminal acts which might be unknown to coding teams. Repetition of such practices without organizational intervention could lead to severe lawsuits costing the loss of multi-million dollar to the organization.
- Increased Efficiency:
Medical billing services, especially when outsourced, focus on improving the organization’s efficiency in RCM workflow. Often, billing team leads cannot pinpoint a specific error, though they have to deal with the outcomes of decreased revenue flow in particular fields.
Audits help comb through the workflow movement and identify the exact point where it goes wrong, thus improving the team’s efficiency.
- Better Patient Experience:
Every step that a healthcare organization takes towards improving its medical billing services helps improve the patient experience also. Patients want transparent conversations around financial responsibility with their providers.
Moreover, they do not want to suffer the agony of wrongful billing due to inaccurate actions taken by the provider’s office. Auditing medical billing services will shed light on the areas hindering the patient experience.
Improving the patient experience will have a long-term positive effect on the revenue flow of the organization.
- Improved Payer Relationship:
Providers and payers have been at loggerheads where the payer has refused to pay the total amount or denied the claim altogether, citing issues with the bill. While these recurring problems have a long-drawn effect on the payer-provider relationship, specific repetitive errors on the provider’s end could be the main problem.
Sometimes audits can also highlight instances of an overpayment that might have gone unnoticed earlier. Performing regular internal audits for medical billing services could rule out the recurring errors during claim submission, thus improving the relationship with the payer.
It could also save the organization a lot of legal hassle by identifying an issue early on without the payer hiring an external auditor.
Medical Billing Services Audit Cycle
Step 1: It is crucial to identify the size of your practice and use that figure to determine whether you have enough resources to perform the audit diligently.
Step 2: Next, the audit will begin to highlight the areas of increased risk in the organization. You need to identify them and use them to report on the required parameters.
Step 3: Once the reports are in place, you must make and implement an effective plan to improve the pain points. It is advisable to add tangible goals to your action plan for a more straightforward evaluation.
Step 4: The fourth step is the most critical. You should set up a regularized auditing time frame for the next audit to have a goal in a fixed period.
Points of Assessment in Medical Billing Services Audit
Each organization can have different goals for performing an audit on medical billing services. Some of them are:
- Days in Accounts Receivable: Compare this figure with the last quarter or month, or year, according to your need.
- Analysis of CPT code usage: You can segregate the reimbursement levels with the CPT codes.
- Number of provider encounters: Compare this number with the number of appointments to check for any mismatch.
Net collection percentage: Monitor the change of this value over a significant period.
- Trends in underpayments: CPT reimbursement reports compared with the individual payer contracts will highlight the areas where the provider is frequently underpaid.
- E&M frequency report: This report could help in comparing the frequency of physician services with their peers over a while.
- Written Off Payments: While there are many instances where the providers write off the payments, this report could highlight if there is any instance where the costs are written off entirely, which should never be the case.
External authoritative audits like RAC or ZPIC could pose severe issues to a healthcare organization’s financial health and reputation. The authorities can trigger these audits in case of severe fraud charges or even simple clerical errors.
So it is advisable to perform regular audits internally for the medical billing services so that these errors are identified early, and the management can take necessary steps to reverse the problems.
We hope this article helped you understand why regular audits are necessary for medical billing services and which reports can benefit the practice. Please write to us in the comment section below if you have any queries.