What is Chart Auditing and Why Is It Important?

A Growing Challenge for Providers and Medical Offices

Healthcare professionals face a myriad of challenges today. One of those challenges is ensuring the accuracy and integrity of medical records. There are many reasons why you should want your medical records to be accurate. Inaccurate or improper medical records can cause compliance problems and they can generate denied claims. However, they can cause another, larger problem for practices: an audit.

Third-party payers, including insurers and Centers for Medicare and Medicaid (CMS), are performing chart audits more frequently than ever before. Audits are used to root out fraudulent claims and inaccurate documentation. A third-party audit is time-consuming, expensive, and very disruptive to any organization that is unprepared. The best way to withstand external audits is to test your charts and records.

That is accomplished by performing audits internally. You can attempt to have your own staff perform an audit. However, extensive training and certification are required, stretching practice staff even further. RCM service providers offer chart auditing services with a focus on proper documentation and compliance. Depending on your circumstances, working with an auditing partner may benefit your practice. Regardless, understanding the importance of chart auditing and what it entails will position your practice to withstand any scrutiny from third parties.

What is a Medical Chart Audit?

An audit is a review of your practice charts either for a specific service or provider or for an entire visit to your practice. When an audit is performed, a process is put into place that determines whether or not services provided by your practice are supported with proper documentation. Ensuring proper documentation is essential to your operations and financial performance as discrepancies in documentation can result in denied claims.

Audits are equally important to root out allegations of fraud. If a practice is charging for services rendered to patients without proper documentation, it can open them up to liability and allegations of fraudulent billing practices. An allegation of fraudulent billing practices can be an existential threat to any medical office, as well as an invitation for investigation by government agencies. The best way to avoid this is to have your charts regularly and properly audited.

Finally, audits are an important indicator of the overall health of your revenue cycle and medical billing operations. If there are persistent discrepancies in documentation within your charts, there are likely other institutional or operational problems within your revenue cycle that are costing you time, money, and patients. Rooting out and remediating causes of improper chart documentation is an important first step in improving your practice’s billing process.

What is the Chart Auditing Process?

The process for performing an internal audit or enduring an external audit is similar. If a third party performs that audit, you can expect them to send you a formal notice. They start the process by selecting 10 random charts. CMS uses 10 charts as their benchmark, as do insurance companies. Once the records are selected, a Professional Medical Auditor will analyze and review each chart. They will seek out missing or inconsistent documentation and compliance errors. Practices that fail to rectify unsatisfactory charts can face financial penalties and potential legal action.

An internal audit is similar, except there are no financial or legal penalties for bad charts. A Professional Medical Auditor will randomly select 5-10 practice charts and analyze them for any documentation or compliance issues. If any issues are identified, they will work closely with your practice staff to remediate errors. There are different types of auditing services depending on your needs. For example, you can audit the charts specific to one of your providers or audit charts for an entire service offering.

Why Internal Chart Audits are Important

Think of an internal audit as preventative care for your medical records. You can proactively identify errors and correct them. Then, if your charts are audited by a third party, you will be able to withstand the audit and continue operating your practice.

Third-party payers can audit your charts at any time, so being prepared for that must be a top priority for any medical office. Documentation deficiencies within charts can indicate larger issues throughout your revenue cycle and billing process. That’s why it is important to consult with an RCM service provider who can thoroughly examine your charts. Once the documentation problems are identified, they will work closely with practice managers and staff to correct any errors. They can also offer a wide variety of services and solutions to help improve the overall quality of your RCM environment.

If your practice is experiencing challenges with documentation or denied claims, you likely need an internal audit performed by a trusted, independent third party. For additional information on how Physicians Resources LTD can assist in auditing your charts and improving your practice financial performance, please visit this page.

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