Health systems are up against many challenges when it comes to claims submissions, including timing and accuracy, to name the most prevalent. Revenue cycle folks want claims submitted as soon as possible, while billing compliance teams are up against submitting them accurately. Because CMS expects upwards of 95% accurate claims, organizations face external audits or fines if they do not comply. Let’s not ignore the payers, either, as they are on the opposing side, yet play a significant role in getting paid in full and on time.
Given these quandaries, what’s the best approach for providers? Clearly, AUDITS. But what types of audits are best? Let’s examine the audit categories from a payer and provider perspective and decide.
1. Pre-bill Audits
These are the claims that never left the building and need to be audited prior to doing so. On the provider side, these audits are about billing compliance teams fixing and releasing claims to get paid the right amount – and on time. For payers, it’s about catching the issues downstream. Providers focus mostly on undercoding and overcoding, while payers are interested in overcoding only.
2. Pre-payment Audits
These are the claims that have already gone out the door but have not yet been paid. For providers, the implications are that the more the delay on payer adjudication, the more drain there is on their cash flow. However, payers are very much interested in this lifecycle stage because they ideally want to audit before they release the payment.
3. Post-payment Audits
These claims have already gone out and have been paid by the payer; they may have been underpaid or overpaid. For both providers and payers, this is the stage where the audit is not very fruitful because even if a systemic issue has been discovered, it can be used for educational purposes only. And to either recover payment or clawback payment, there lies an administrative burden and costs are involved.
The Advantages of Prospective Audits
MDaudit research shows a 31% increase in prospective audits over 2021, and a 28% uptick in risk-based audits. Since most organizations are revenue-focused, the emphasis should be on both pre-bill and pre-payment audits – which are both prospective. These audits reduce the chance for denials, which revenue integrity teams are big proponents of. These prospective audits also demonstrate to CMS and payers that organizations are taking a proactive approach to submitting clean claims, which results in faster payments. Although prospective audits may be superior to retrospective, they require manpower, which many billing compliance departments lack, thereby limiting the number of prospective audits they can perform.
The Case for Retrospective Audits
Although retrospective audits have their place within the organization, looking in the rearview mirror will only help billing compliance teams from stopping future mistakes, but it will not bring in revenue. Retrospective audits are helpful in educating providers and preventing future clawbacks, so it’s advisable to keep them in your audit repertoire. These audits don’t have the same time constraints as prospective audits, as claims have already been submitted and adjudicated. Therefore, audit teams have the leisure of conducting in-depth analysis and are able to review as many cases as needed to reveal anomalies and providers that need coaching. Retrospective audits also enable teams to get to the root cause of issues and take corrective action to remedy impacted areas.
For providers to remain compliant, earn more revenue, and become more efficient, the answer lies in implementing the right technology. Payers have invested in AI technology and machine learning for claims adjudication in their processes, and it’s time the provider side keeps up. If healthcare organizations want to remain revenue-driven, they must step up their risk-based auditing, ramp up prospective auditing, and continue educating their providers on continuously improving until they become a well-oiled machine.
Take a more proactive approach to uncovering issues before they impact your organization; learn how in this in-depth white paper on Implementing a Risk-Based Auditing Strategy for Healthcare Organizations.
