Audit Readiness

Posted on 27 Dec, 2017 |comments_icon 0|By Elizabeth

The best way to prepare yourself for an external audit is to perform internal audits.

Knowing where to start, though, is one of the biggest challenges of self-audits.

Consider the billing problems that are most often problematic for your practices. Another strategy is to scan current audit hotspots and determine whether you’re at risk.

Number 1 Audit Hotspot–Evaluation and Management Reporting

It isn’t a question of if your payer will audit your E/M claims, but when. If you pay attention to current trends with the most commonly billed E/M codes, you can spot trouble areas in your practice’s coding before your payer does.

  1. Analyze the Reports

If a MAC looks at E/M coding curves — which show the range of codes billed from low-level to high-level — the MAC will scrutinize the curves that are heavily weighted to the high side because they’ll look for whether the practice was overpaid. However, many payers are also looking at those practices that err to the low side of the curve because that also indicates that incorrect coding might be happening.

Reminder: Most Part B contractors post CBRs on their websites in an effort to educate the provider community about the averages. Reviewing the findings allows you to determine whether your billing habits are similar to other practitioners nationwide.

Don’t Miss: Practices that are billing significantly higher codes aren’t necessarily defrauding Medicare. You might be treating sicker patients, and you may not have the same insurance case mix as other practices. The information in the comparative billing files includes Medicare patients only — and since you probably see patients from Medicare, Medicaid, private payers, workers’ compensation, and other sources, your case mix will be different.

“It is important to look at the many different sides of this,” says Suzan Hauptman, MPM, CPC, CEMC, CEDC, Director of Coding Operations at Allegheny Health Network in Pittsburgh, Pa.

Hauptman notes the problems, but is quick to see the other side:

  • “EMRs are being built to allow for ‘note bloat,’” which could be falsely substantiating higher levels of service when medical necessity isn’t always there.
  • Providers are aware that it is necessary to have a better understanding of the guidelines and regulations surrounding documentation, and they are working towards better notes and following medical necessity requirements.
  • It can be a perfect storm at times, with complexity of care, patients’ cases, and/or the availability of options. All of this adds up to more involved medical decision making. “I don’t think the higher codes are necessarily fraudulent,” Hauptman clarifies, “but they are worth investigating.”
  • Additionally, reviewing all your services in a pre-bill status will give you the reassurance that regardless of how your providers’ claims fall compared to the curve, they are substantiated, Hauptman explains.
  • The data is still helpful as an overall view of where your coding patterns may fall. Once you download the CBR from your MAC, look for your specialty designation to see what the average coding patterns are for specialists like you in your state and across the country.

Example: Part B payer Palmetto GBA notes that the most common established patient office visit code billed by internal medicine practices in North Carolina last year was 99214, which is about 8 percent higher than internists nationwide. Only 5.3 percent of E/M codes billed by internists nationwide were 99215s during that period, so if your internal medicine practice has significantly more of its claims billed as 99215s, you may want to examine that more closely.

Source: North Carolina E/M Procedure Code Range Summary, dates of service July 1, 2014 to Dec. 31, 2014 Comparison_Report.pdf/$File/NC_EM_Comparison_Report.pdf.

  1. Spot Audit Random Charts

Reading your CBRs should be a springboard to auditing some of your practice’s files by selecting random charts and reviewing them to determine whether the correct E/M code was reported in each encounter note.

“If you bill E/M services to Medicare, we recommend that you perform a self-audit of your billing and documentation practices to ascertain if problem areas exist, which may warrant further education or corrective actions,” says Part B MAC WPS Medicare on its website.

Tip: During your self-audits, check the chart documentation on the randomly sampled claims, determine which E/M code you would report for the service, and then check what the physician actually billed. Keep a tally of any discrepancies so can offer the physician tips on how to select the right E/M code.

“The auditor should definitely know what the code was that was originally submitted, and thus the intent of the visit from the physicians prospective,” says Hauptman. “There should then be education around why the audited code was different than the actual billed code. An accuracy rate should be determined and the office or practice should develop a policy around the acceptable accuracy rates, including penalties, additional education, and monitoring frequency.”

Remember: your numbers may fall outside of the norms for your specialty, and that’s okay as long as the documentation supports the codes billed, and you can find justification of the medical necessity for each visit in the notes.

  1. Compare Practitioners to Each Other

Once you’ve compared your practice to other specialists in your area, another smart tactic is to compare the practitioners in your practice to one another. Some coders report that their practice’s coding habits fall in line with the national averages, but on closer inspection they find that one physician habitually over-codes while another under-codes too often, thus leading to the misleading “normal” averages.

Bottom Line: If you find any practitioners whose charts fall well outside the curve, examine whether they are billing appropriately. If their codes match the documentation, you shouldn’t need to worry. But if they seem to be miscoding a lot of files, it’s time to offer some E/M selection education to help him to better substantiate the appropriate codes.

From start to finish, The Physician Practice Compliance Sourcebook will equip you to plan and execute self-audits and audit-readiness to ensure practice-wide compliance with federal and state laws requirements.



Elizabeth works on an array of projects at TCI, researching and writing about modern reimbursement challenges. Since joining TCI in 2017, she has also covered the nuts and bolts of cybersecurity, compliance with federal laws, and how to tap into the advantages of telehealth services.

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