Continual Medical Coding Audits Ensure Accurate Claims

What’s the purpose of continual medical coding audits?

Medical coding acts as a type of shorthand for documenting and communicating aspects of a patient’s diagnostics and treatment. With the increasing complexity of patient care and the healthcare sector itself, maintaining coding accuracy has never been more challenging – or essential.

For providers, accurate coding helps ensure that clean claims are submitted to payors, with no errors or omissions. Claims that can be processed without questions or additional information benefit all stakeholders.

While coding errors can never be completely eliminated, regular coding audits can not only catch problems, but also trigger corrective action and training for the sake of future coding accuracy.

Why is inaccurate coding such a common problem?

Coding guidelines provided by government payors, such as CMS, include periodic changes and additions, including new codes for innovative technologies. While updated versions are available, not all coding staff may be staying on top of these updates. Private insurers may adopt the same evolving standards, or they may publish their own, further contributing to the confusion.

The issue can be even more acute for practices where busy physicians and their staff do the coding. Since they are typically not subject to the same continuing education requirements as dedicated coders, inaccuracies may be more common.

Coding staff hired in a hurry may not have received thorough training, or they may have brought their ‘bad habits’ from a previous job. Finally, it’s a fact of life that humans make mistakes. And of course, someone whose errors are never corrected will continue to make those same errors.

Why should healthcare practices conduct regular coding audits?

Every healthcare facility is different. At one, there may be a knowledge deficit, compounded by the fact that people don’t know what they don’t know. At another, there may be issues with a provider’s documentation. Coding audits can help reveal problematic patterns that were previously unseen.

As mentioned, one of the most important benefits of coding audits is the ability to consistently submit clean claims. You can read more about reaching at least a 90% clean claims rate here.

Ongoing medical coding accuracy

So much depends on accurate coding. Conversely, when things break down, they affect everyone and everything. Plus, no coding mistake exists in a vacuum; its impact may ripple in unpredictable ways.

For additional insights, read more about medical coding within the context of Health Information Management.

Optimizing reimbursements

If the medical staff neglected to document a procedure that was performed, then no code will appear for it. This happens more than you might expect. A sharp coding professional may catch the omission, but a less experienced one may not. In addition, quality is often neglected.  Many times, only one unit is billed when multiple are performed.

Or perhaps the procedure was documented, but an overworked coding staffer mistakenly omitted it from the claim. Or they accidentally typed in the wrong code, for a less costly procedure. Each of these errors can result in claim denial or reduced reimbursement. And each could be avoided by establishing regular medical coding audits.

Clearly, the revenue loss can add up over time, with the pain particularly impacting smaller practices who find it harder to cover those losses with other billings.

In some cases, billing errors that result in reduced reimbursement can also mean increased out-of-pocket expense for the patient, and no patient is ever happy about that.

Learn more about the wider issues of Revenue Cycle Management, as well as opportunities for operational support.

Maintaining coding compliance

The general need to remain compliant, and avoid any cause for compliance scrutiny, doesn’t need to be explained.

One specific area, though, where a coding error becomes consequential is when it may be seen as overbilling. Even an honest mistake may trigger an audit by the government or a private insurer.

Subsequently, that payor will inspect future claims from that provider with much more scrutiny. It now becomes an ethical issue, with the perceived possibility that the overbilling was not only intentional, but part of a pattern.

At which point, internal coding audits may seem to make a lot more sense. They tend to be less expensive in the long run than potentially hefty fines, with related reputational damage.

Patient records

Documentation and coding errors can also contribute to medical records errors. These of course could negatively affect further diagnostic and treatment planning – and by extension the patient’s health.

If a code is mistakenly applied for, say, a cancer diagnosis, that mark on the patient’s permanent profile may affect their ability to get affordable health insurance in the future.

Or, a code that wrongly indicates that the patient received a certain treatment may later prevent “duplicate” treatment – or its coverage – when the patient actually needs it.

How is medical coding auditing performed?

The auditor begins by collecting medical records, lab reports, x-rays and more. They also compile financial records such as entered charges and explanation of benefits (EOBs), as well as entries in accounts receivable ledgers. Policy-related documents pertaining to payors are also referenced.

The auditor then compares the documentation in the patient’s records to what was applied in the billing. Accidental omissions and other coding mistakes reveal themselves when things don’t match up.

Individual errors may turn out to be just that; but an auditor can also detect problematic patterns for a particular coder, a particular type of service or for the practice as a whole. They can then suggest corrective actions, such as procedural changes or further education.

Why don’t more practices conduct continual medical coding audits?

For some, it simply doesn’t occur to them to look closer at their billing and coding practices. Since revenue is coming in, they don’t think about the revenue they may be ‘leaving on the table.’

Others see continual medical coding audits as an unnecessary expense that would eat into organizational profitability. And at busy facilities, some managers just don’t have the time to think about, let alone create a coding audit system.

What other types of issues do coding audits uncover?

 Coding audits may also reveal mistaken codes that wrongly lead to medical necessity denials, claims or records not coded to the highest specificity, secondary diagnostic codes in the primary position or treatments that were planned, but subsequently cancelled.

In addition to missing and incorrect codes, missing and incorrect modifiers can also be found to be culprits. These two-digit code add-ons can be highly consequential, such as when surgery is necessary for something on the patient’s left side, but the code modifier specifies the right side.

Can claims be resubmitted after errors are found in an audit?

In some cases, claims can be resubmitted, depending on how long ago the initial claim was filed. But due to the additional time and expenses of a reworked claim for both the provider and the payor, as well as the red flags they might raise, it’s perhaps not something that should be a regular practice.

When claims are in fact resubmitted, it’s typically because additional diagnostic codes are found during an audit, or a procedure code has been changed or removed.

How are medical billing audits different from medical coding audits?

While medical billing audits include the inspection of medical documentation and applied codes, they are more comprehensive than medical coding audits. They tend to cover the entire medical billing cycle, from initial insurance verification, to claim filing, posting of payment, any follow up, and responses from the payor as well as the organization’s subsequent processing.

However, while coding audits include diagnostic measures, medical billing audits typically do not.

What are the types of medical coding audits?

Audits can be internal or external; pre-bill or post-bill; and periodic or continual.

Internal vs. external audits

 It’s possible for a knowledgeable manager or staff member to conduct internal audits at their own facility. However, those audits are less likely to be completely objective, since that person is assessing their own co-workers, at their own place of employment.

Larger organizations may be able to afford a dedicated coding auditor, which is a step up. Of course, staff coders should never audit themselves, for obvious reasons.

For ensured medical coding accuracy, smart medical facilities generally contract with a company that provides an external auditor, an independent expert who can perform their work with no bias.

Pre-bill vs. post bill audits

A pre-bill coding audit naturally allows any mistakes to be caught, and adjustments to be made, before the claim is submitted. However, this can also potentially delay billing and payment.

Issues found in post-bill audits, as already noted, can lead to re-worked claims. But more often they are used to indicate the need for further education. With lessons learned, the practice moves on.

Periodic vs. continual audits

How often should medical coders be audited? Periodic coding audits are conducted at least yearly. But they should occur more frequently for new coders, as well as for those who have a history of errors.

Continual coding audits follow the same overall processes, but are conducted for each and every claim or bill, optimally before it is submitted.

Why are continual coding audits the recommended approach?

Although they require more resources, continual audits clearly are more thorough, uncovering and correcting coding errors in real-time. Error patterns can also be discovered and addressed before future claims go out.

Plus, continual coding audits become a normal part of the overall billing process, without the sense of interruption that periodic audits pose.  These  audits can make use of technology to lower the resources required and increase continuous feedback.

What tools can help with medical coding auditing?

Medical coding audit software

At one time, coding audits were conducted manually, using spreadsheets. Now, a number of more efficient, sophisticated and customizable software programs are available to streamline the auditing process.

Most audit software will gather and process all the data, and output results for a human auditor to review. Some products can pick up on patterns of anomalies, such as repeated mistakes by an individual coder. All previous audit data is archived and available.

Targeted DRG Analytics

 The sample size of typical coding audits may not be large enough to reveal certain negative trends or patterns that may be impacting revenue.

That’s where targeted analytics comes in to provide continual auditing. JTS Health Partners offers a deeper dive into the data with nCREAS™ Analytics as a Service (AaaS). By targeting specific Diagnosis Related Groups (DRGs), near-real-time data can be consolidated and analyzed to reveal previously unseen coding issues that are having a negative effect on individual claims as well as capturing ongoing revenue.  In addition, this allows for immediate feedback and education for coders to mitigate recurring errors.

You can read more about the suite of healthcare analytics services at JTS, including the many benefits of predictive modeling and forecasting for making financial decisions and optimizing future revenue.

Artificial Intelligence and medical coding

The use of AI is a new but growing trend in the medical coding sphere. It can transcribe dictated information and recommend the proper codes for diagnoses and procedures.

Here too, it’s up to a knowledgeable human to review and verify its work. Currently, voice recognition in AI systems doesn’t always perform perfectly due to variations in volume, accents, stray words and other factors. Which means it may be starting with faulty or incomplete data.

Although it can’t always make the logical connections that the human mind can, AI will undoubtedly continue to improve and offer benefits such as time and cost savings. And as it does, the role of the medical coder will evolve from interpreting and coding to verification and auditing.

That last sentence is in the singular because many providers in the future may only need a billing staff of one.

Everything depends on medical coding accuracy

Cleaner claims; optimized reimbursements; ensured compliance; accurate patient records; and the confidence of knowing that they’re all aligned. Everything, and everyone, benefits from continual medical coding auditing.

How can JTS Health Partners help with effective, continual medical coding audits?

Many healthcare organizations have turned to JTS to provide external medical coding auditors with systems and schedules to fit their workflow. Others have recruited full-time or part-time in-house auditors through JTS as well.

JTS also offers high touch consultation, coding quality reviews and education programs. These are designed to improve a facility’s own coding and auditing practices, establish proper guidelines and criteria, get up to speed with today’s compliance standards and focus on problem areas.  JTS strives to create sustainability throughout the entire health information management process.

Healthcare organizations tend to find that these services end up paying for themselves through increased revenue, operational efficiency and potential staff reduction. Plus, the experts at JTS can offer levels of professional objectivity that can rarely be achieved in-house.

Next step? Let’s talk!

Schedule an initial no-cost, no-obligation initial consultation with a JTS Health Partners professional, and let’s discuss your needs, questions and concerns, as well as the most cost-efficient ways we can help.