Sep 29

Performing your own internal coding audit

With RACs surrounding us and lots of talk lately about fraud and abuse issues, now might be a good time to conduct your own internal audit.  When you perform an internal, you’re comparing your physician’s billing records, claims, and medical records to verify expected treatment outcomes and medical necessity of services. In addition, you’ll look for appropriate documentation to support fees and reasonable charges for services your surgeons rendered. You want to find out if there are any compliance problems before an outside auditor does. The following are a few quick steps to help you conduct your own audit:

Involve the staff. Let every member of your practice know what you’re doing and why, and remind them that you aren’t trying to get anyone in trouble. Instead, you want to determine whether they’re bringing in the right amount of reimbursement and cutting out denials.

Select the charts. Most auditing specialists I know recommend that you review 10 to 15 records per physician at a minimum. I’ve seen the sample go as high as 50 charts per physician.

Examine the chart’s documentation. Read the documentation and determine which ICD-9 and CPT codes you think apply to the chart, then check which codes were actually assigned to the services. When in doubt, engage the services of an outside auditor.

Pay special attention to time-based coding. I know many physicians who code E/M services based on time with the patient. You have to have a believable reason that you had to provide the majority of the service on counseling/coordination of care to justify basing your E/M level on time.

Use a score sheet. Many MACs offer audit tool score sheet templates that can help you when auditing documentation. For instance, High-mark Medicare offers several templates on its Web site, such as the E/M worksheet at


Educate. After the audit, show your physicians, other practitioners, coders, and billers what the outcome was so you can combat any problem areas.

Remember the goals of any good compliance program are the following:

Prevent – Detect – Correct

About Reed Tinsley, CPA

As a top advisor to physicians, I help increase practice profits by delivering hands-on, expert medical accounting/tax support, practice counsel, and revenue-building strategies. Read more →