Medical billing audits in California can be a cruel necessity. The transition in 2015 to ICD-10 coding prompted many healthcare organizations to review their claim processing methods. Even though that bird has flown, auditing in healthcare organizations is the new normal.
In any case, every practice should understand billing audits and choose the ones that fit their needs best. If you’re uncertain about billing practices, areas of risk, or growth opportunities in your practice, it’s time to revisit and enhance your knowledge of medical billing audits in California healthcare organizations
However, it can be admittedly nerve-racking when your practice is under audit.
Join us while we explain what medical billing audits are like, the different kinds of audits, and how to guide your practice through the process smoothly without undue stress.
What Medical Billing Audits in California Look Like
A billing audit in the medical field is a structured process that evaluates and confirms the accuracy and reliability of clinical documentation. To that end, this involves a thorough review of all patient health records and an analysis of the billing data submitted to insurers. The main objective is to detect, monitor, and rectify any incorrect billing practices to ensure financial health and compliance.
To conduct a medical billing audit in California, auditors collect data from various sources. This may include clinical records like medical charts, x-rays, and lab results, as well as financial documents such as charge sheets, remittance advice, and accounts receivable ledgers. Additionally, policy-related documents may be required by providers or regulations.
Notably, audits can be done before claims are sent to insurers (prospective audits) or after (retrospective audits). New providers often undergo prospective audits, while existing ones may have retrospective audits.
Medical billing audits in California are far more extensive than coding audits. Basically, they encompass every aspect of the medical billing life cycle. This includes ICD and CPT coding, payment posting, insurance verification, claim submission, follow-up procedures, and denial management.
The Purpose of Medical Billing Audits in California
While audits can feel daunting, it’s important not to forget the benefits these periodic checks provide. Clear medical billing and coding are essential to healthcare revenue. A medical billing audit helps hospitals, nursing homes, and other facilities identify issues that could lead to non-compliance or financial losses.
Improved Coding
Conducting medical billing audits in California is a great benefit to coding staff, as it allows them to proactively identify and correct potential issues before they’re flagged by government agencies or insurance payers for incorrect coding. This resource helps in error identification and provides guidance on rectifying them. Thus, it boosts the coding team’s confidence and ensures consistent use of current procedure codes.
In addition, internal auditors can highlight areas requiring additional staff education and training to uphold proper coding protocols. Effective medical coding decreases the chances of government audit visits from entities such as Recovery Audit Contractors (RACs)—more on that later—or Zone Program Integrity Contractors (ZPICs).
Better Claims Collections
Medical billing audits provide valuable benefits to administrative staff by ensuring accurate and properly-submitted claims. Audits establish office standards, reduce frustration, and create a positive work environment with a compliance-focused culture. This environment attracts skilled personnel and addresses issues like under-coding, code overuse, and improper unbundling—promoting accurate billing practices for common procedures. Consequently, establishing and following policies and procedures reduces the likelihood of external auditor visits.
Also, these audits safeguard practices from fraudulent billing. Internal checks ensure compliance with ICD-10-CM and EHR Meaningful Use standards, minimizing incorrect payments. Plus, medical billing audits in California reveal reimbursement shortfalls, coding discrepancies, and opportunities for increased revenue. Efficient file processing, reduced improper payments, and optimized claim payments are additional benefits.
In conclusion, medical claims audits enhance payer relationships by ensuring accurate submissions and identifying issues proactively. This approach can prevent external audits by resolving problems before they reach the payer’s claims software.
Increased Patient Satisfaction
Claims audits are vital for patient care. By monitoring services closely, educating physicians on delivering positive medical experiences, and focusing on improving overall quality, practices naturally shift towards better care. Improved care leads to efficient revenue cycles and better health outcomes.
Medical billing audits in California practices help them understand risks better. This lays the groundwork for streamlined workflows and optimal performance.
How to Conduct Medical Billing Audits in California
All medical billing audits in California are conducted according to the following basic steps:
Defining the Audit
Start by determining the audit’s scope and required resources. Understand the clinical staff involved, payer mix, and billing and coding team composition.
Evaluating the Current Situation
Assess the state of your practice to identify issues. Review service frequency and analyze CPT code usage by billing staff and providers.
Implementing Corrective Actions
Make forward progress based on audit findings. Set improvement targets, address internal issues, and work with payers to fix deficiencies.
Continuous Learning and Improvement
Learn from each audit to refine the process for future medical billing audits in California. After all, continuous improvement ensures a more effective auditing process over time.
Internal Medical Billing Audits in California
Medical billing audits in California can be internal or external. The choice depends on factors like staff size and resources. Internal audits are done by the healthcare facility itself, often by dedicated teams in larger organizations.
Regardless of the means, the results help enhance billing accuracy and efficiency.
Conducting Your Own Medical Billing Audit in California
When conducting internal medical billing audits in California, your two priorities are accuracy and reporting.
Ensure accuracy in charges by encouraging proactive review before claim submission. The American Medical Association suggests appointing a leader for internal audit efforts.
Monthly reports are valuable for spotting reimbursement trends early. Suggested metrics to cover include the following:
- Reimbursement by CPT code
- Encounters vs. appointments comparison
- Net collection percentage increases
- Days in accounts receivable (AR)
Analyze days in AR by comparing to previous periods and averaging over quarters, half-years, and years. Then, benchmark these figures against historical and national data from the Medical Group Management Association. If your revenue cycle management software lacks reporting capabilities, discuss with your vendor or explore other options.
External Medical Billing Audits in California
External medical billing audits can seem a little more scary. However, they are the new normal.
In 2012, Medicare spending totaled $574 billion. Medicare Administrative Contractors (MACs) were processing about 4.4 million claims daily from over 1 million providers. The Federal Bureau of Investigation estimated that 3% to 10% of those payments could be fraudulent, while the Centers for Medicare and Medicaid Services (CMS) suggested that around $65 billion was improperly billed to Medicare or Medicaid. Combining the FBI and CMS estimates, it suggests MACs could improperly disburse between $82 billion and $122 billion annually.
To address fraud, waste, and abuse in healthcare, there’s been an increase in funding for initiatives under healthcare reform. Recovered funds are meant to expand coverage under the Affordable Care Act. The Patient Protection and Affordable Care Act allocates $10 million per year, while the Budget Reconciliation Act provides $250 million annually for new programs targeting fraud and abuse, focusing on billing pattern analysis within Medicare and Medicaid.
The CMS’s Health Care Fraud Prevention and Enforcement Action Team (HEAT) involves the Department of Justice and the Department of Health and Human Services. If fraud is detected in a HEAT audit, a local Medicare Fraud Strike Force is activated for investigation. There are nine Medicare Fraud Strike Forces across the US, each led by a US attorney.
Types of External Medical Billing Audits in California
With the increased focus on uncovering fraud, waste, and abuse, you are likely to undergo an audit at some point. Make sure you understand the different types of medical billing audits in California you might face so you can respond effectively.
Comprehensive Error Rate Testing Audits
The CMS uses Comprehensive Error Rate Testing (CERT) audits to evaluate whether MACs process claims accurately. These audits concentrate on operational aspects like coding and billing accuracy and don’t target individual physicians.
Be careful not to disregard any requests for records. Failure to provide the necessary documentation can lead to alerts to Medicare regarding noncompliance, potentially triggering more audits. Moreover, you may need to reimburse CMS for visit costs.
To navigate a CERT audit smoothly, maintain accurate medical records and cooperate fully with the auditors.
Recovery Audit Contractors
Recovery Audit Contractor (RAC) audits focus on healthcare provider errors to correct improper payments. RACs aim to prevent future issues, working as third-party contractors who receive a percentage of overpayments or underpayments found.
Being chosen for a RAC medical billing audit in California may follow a CERT audit or high patient volume, indicating potential errors. The US is divided into four regions (A–D), each with an assigned RAC. Knowing your region’s RAC and reviewing their services on their website can help you prepare for an audit effectively. RAC audits are more intricate than CERT audits, but many don’t uncover errors.
However, the RAC system has flaws. The fee structure can lead RACs to focus on technical mistakes, especially affecting low-volume providers. RAC audits can be inaccurate, with a significant number of successful appeals. However, the appeals process for RAC claims is costly and complex, often requiring legal assistance.
Zone Program Integrity Contractors
Zone Program Integrity Contractors (ZPICs) conduct detailed medical billing audits in California that compare billing practices of providers. ZPICs can suspend payments, find overpayments, and suggest excluding providers from government programs. They support fraud investigations by the FBI and the Office of the Inspector General.
ZPIC audits are not random. They target presumed fraud and may involve on-site inspections. Factors initiating reviews include the following:
- Data analysis
- Service frequency
- Tips from whistleblowers or hotlines
- Referrals from MACs, RACs, or patients
ZPICs review some patient records and extrapolate errors to estimate misappropriated funds. Interviews with patients, beneficiaries, or staff may be conducted. Whistleblowers are motivated to report fraud and can receive a portion of recovered funds.
Navigating a ZPIC audit necessitates expert legal guidance due to the intense scrutiny involved.
Support for Medical Billing Audits in California
Outsourcing medical billing offers significant advantages for healthcare practices, especially when preparing for medical billing audits in California. One key benefit is the expertise provided by third-party billing companies. These professionals are well-versed in current Medicare regulations and coding requirements. This reduces billing errors and ensures accurate claim submissions. Outsourcing can also improve compliance and reduce audit risks overall.
Medical Billing Audits in California–A Test of Endurance
Audits are now a standard part of healthcare. It’s vital for your practice to conduct internal audits and regularly check medical records. Emphasize compliance within your team to streamline the process. Enhance your staff’s grasp of coding and billing rules through ongoing education. Also, review any billing reports from CMS.
When your practice faces a medical billing audit in California, promptly identify the auditor, audit type, and deadlines. Then, immediately perform an internal review and seek advice from legal experts.
Don’t be afraid to outsource your medical billing to protect your practice. Stay informed, stay prepared, and continue providing quality care to your patients with confidence.
