A medical billing audit is usually seen as a way to defend against issues. It happens when a government or private payor denies or delays multiple claims. At this point, you might question whether your documentation follows the guidelines from Medicare or commercial payors. You should have reviewed your medical billing process when your manager suggested it.

Boost Your Practice’s Profitability with a Medical Billing Audit

Conducting a medical billing audit is smart, no matter the reason. It’s not just about defense; it’s an opportunity to enhance your practice’s profitability. Thinking creatively is key. Often, doctors focus only on reviewing clinical records during an audit. They compare this information to the diagnosis and procedure codes on the claims. While this is crucial, there’s more to it. It reveals areas where you can increase profitability.

Simplify Medical Billing Audits

Consider focusing on smaller details in billing audits. Check medical records to ensure all provided items or services are properly charged. Evaluate your documentation for evaluation and management services – it might support higher-level CPT coding. Ensure clinical records include important quality measures. When auditing seems difficult, getting help from a medical billing company in California is always a wise decision. Professional medical billing companies have much experience in dealing with healthcare financial management and can resolve every issue before they cause real problems. 

Emphasize Quality Measures

Medicare payments increasingly hinge on submitting quality measures. Failing to document and submit these measures may result in penalties, which have risen over time. On the flip side, you can earn incentives for exceptional performance. Billing audits often reveal easy ways to enhance performance and qualify for incentive payments.

Start with Checklist

Use our Revenue Cycle Best Practices Checklist to begin. This type of billing audit, a ‘micro’ approach, often leads to additional training for staff and physicians. Strengthen incomplete staff procedures, improve clinical documentation, and ensure proper coding. This not only enhances patient care but can also increase payments and potential incentives.

Exploring the Bigger Picture

Now, what about the ‘macro’ approach to a medical billing audit? Recognize that your practice’s profitability depends on various factors. While your clinical skills are crucial, the amounts of claims and the efficiency of billing and collections processes also play a significant role.

Manage Your Fees

Even before a patient comes to your office or hospital, you can impact your earnings by controlling your service charges. Most doctors set their fees based on a published fee schedule, often using their area’s Medicare physician fee schedule. Billing at two or three times the Medicare rates ensures you won’t receive less than any payer will reimburse.

Billing Strategy

Some practices bill Medicare at allowable rates to ensure a zero balance after payments. However, staying updated on Medicare fee schedule changes is crucial to avoid payment discrepancies.

Contracts with Insurers

Contracts with insurance companies can significantly affect profitability. Some have fixed fee schedules, while others are negotiable. Leverage your location or specialty for better rates. Regularly renegotiate fees to ensure fair compensation.

Patient Scheduling and Payments

Billing begins when a patient’s appointment is scheduled:

Verify insurance coverage

Inform patients of financial responsibilities, including copayments.

• Display signs about copayment expectations.
• Discuss cash or hardship discounts.
• Accept various payment methods.
• Remind patients of past-due balances when scheduling future appointments.

Utilize Technology

Use practice management software for real-time insurance verification. Minimize phone calls to insurers by leveraging electronic means.

Efficient Scheduling

Set boundaries for scheduling patients and appointment durations in a group practice. Higher patient throughput spreads overhead costs, boosting profitability.

Charge Capture and Coding

Traditional charge sheets are outdated. Integrated systems manage medical coding during visit documentation. Submit claims promptly and capture charges for out-of-office procedures promptly.

Streamline your approach for a more profitable healthcare practice.

The ‘Billing’ in a Medical Billing Audit

What we commonly call billing is more accurately known as claims submission. Modern practice management systems have greatly streamlined the claims preparation process. Electronic clearinghouses accept, scrub, and submit claims to payors, revolutionizing the preparation and submission process. Like any software system, they require maintenance and timely input for maximum benefits.

Maintenance involves adding information about new or updated insurance company contracts or payor fee schedules. Timely input includes promptly closing medical records entries after visits and capturing out-of-office charges.

Denials and Advance Beneficiary Notices

Keep track of denials and use patterns of denials to improve medical documentation. Improved documentation, including appropriate diagnoses supporting specific procedures, can minimize denials for lack of medical information.

Other denials may result from Medicare limitations on certain procedures. When this occurs, having the patient sign an Advance Beneficiary Notice allows billing the patient if Medicare denies the service. In this regard, using auditing as a tool, medical billing services providers better manage practice management, and electronic health record systems streamline this process in a patient-friendly manner.

Auditing Accounts Receivable Management

As the saying goes, you can’t manage what you are not measuring. Tracking only the total value of accounts receivable (AR) can hide issues. Improve profitability by reducing AR, but only if you collect more owed amounts.

To track AR effectively, measure the days in accounts receivable, representing the average days between recording charges and collecting revenue. A number under 30 days indicates good performance, while over 60 days suggests room for improvement. Each one-day reduction in Days in AR contributes to practice profit.

Perform this exercise for each major payor to identify timely payors and those stretching payments out. Effective accounts receivable management improves profitability. The longer it takes to process claims, follow up on denials, and send patient statements, the lower your eventual collections and profit!

Conclusion

A medical billing audit for planning can help you adjust your practice size. Analyzing it thoroughly may show chances to hire more clinical staff, like nurse practitioners or physician assistants. These skilled professionals can boost profits by growing your patient base while keeping overhead costs in check.