Medical Billing

# Preparing for Audits: A Medical Billing Checklist for 2025

- January 13, 2025
- Posted by Brian Bertrand

02 Jul

Medical billing and coding processes have intricate patterns that can result in mistakes and irregularities in general. Errors led to disturbance in the reimbursement cycle and ultimately disturb the financial status of healthcare organizations. Therefore, to cope with these drastic situations, audits are essential for healthcare providers in the medical billing departments to maintain the reimbursement cycle and compliance with regulatory policies. Essential steps should be taken to launch potential audit processes.

In this article, we will discuss the medical billing checklist to ensure the proper undergoing of audits in 2024. We will also learn about the essential steps and benefits of undergoing audits in the medical billing process.

## Purpose Of Medical Billing Audits

Before developing deep into the steps taken to ensure a proper audit system, it is very important to know the purpose and key objective for launching this system. It will give us a clear indication of what we are trying to achieve. Below are some key objectives:

- To ensure compliance of medical billing and coding tasks with the regulatory rules and policies provided by the federal and state authorities.
- Audits help to ensure an accurate and error-free billing process.
- Fraud and abuse can be detected with the help of potential audits.
- To improve the quality of patient care in all of the healthcare facilities.
- To maintain revenue cycle management.

## Medical Billing Checklist

### 1. Implement Robust Documentation Practices

Proper documentation is fundamental to effective audit work because reliable records are crucial to the entire audit process. Key practices include:

- Detailed Patient Records: It is crucial to be clear while documenting specific encounters with the patients, the treatment steps followed, and the results evaluated.
- Coding Accuracy: Choose current and correct ICD-10, CPT, and HCPCS codes if applicable to report the case. It would be appropriate to update coding manuals periodically and familiarize staff members with changes or new codes.
- Clear Billing Records: Ensure that accounting reports are well documented detailing every bill issued, service provided, and price charged.
- Audit Trails: When there have been amendments made to the records, it is essential to make sure this is documented and then it will show who made the changes and the reasons behind it.

### 2. Stay Informed About Regulatory Changes

The healthcare industry is continuously evolving and new regulatory changes appear from time to time. Therefore, it is recommended to stay updated and compliant with the new policies to meet all the requirements and standards. This step will help to escape legal penalties and maintain the efficiency of the medical billing process. Below are some sources of information for the new updates:

- Centers for Medicare & Medicaid Services (CMS) updates.
- The Office of Inspector General (OIG) Work Plan.
- Changes in the International Classification of Diseases (ICD) and Current Procedural Terminology (CPT) codes.

It is necessary to stay in touch with all the above-mentioned sources and attend their seminars and workshops to make your system compliant. There are some key regulations that should be monitored:

- HIPAA (Health Insurance Portability and Accountability Act) – Also read this guide about HIPAA Cost and Compliance
- False Claim Act
- Stark Law
- Anti-Kickback Statute

### 3. Conduct Regular Internal Audits

This is a very vital step in the checklist for preparation of audits. Internal audits should be done before the external audits. It will help to find the errors and issues in the medical billing task. Internal audits focus on the accuracy of medical billing and coding, completeness of medical documentation, and identification of any irregular patterns to detect potential mistakes.

Internal audits also concern fraud in the medical billing process. To make the process effective, compliance with regulatory demands can be ensured. Continuous internal audits improve billing processes and enhance the readiness for external audits.

### 4. Train And Educate Staff

- The legal compliance process is an integral part of the healthcare setting, and education plays a critical role in compliance. Some of the things that should be included in training programs are highlighted.
- Firstly, staff must be updated about new changes in healthcare regulations and payer requirements While performing duties, nurses and other members of staff should take briefings on changes in healthcare regulations and payer requirements at least once a week.
- Secondly, education about each service, correct coding and billing, and intensive training for improved compliance with coding and billing practices are mandatory. This includes factors such as the newness of ICD-10 and the complexities associated with the assignment of CPT and HCPCS codes. (Also read this blog about the CPT Codes in Orthopedics Specialty)

### 5. Maintain Communication With Payers

Communication gaps can hinder smooth billing processes and take time to address challenges. One component of effective communication is routine checks on contracts such as construction, supply, and service. It allows the listener to keep track of what the payers are offering and what is expected of them regarding contracts through ongoing compliance checks.

In case of any ambiguous details or contract issues, effective communication is needed to ask for clarification of billing guidelines and details. Communication should be an important step in the checklist for preparing audits. Undergoing effective audits, it is necessary to get clarification for all types of confusion and irregularities.

### 6. Utilize Technology Effectively

Modern technologies should be incorporated, which can enhance auditing. Auditing systems become useful when we use technologies like Electronic Health Records (EHRs), billing software, and data analytical tools.

EHRs help analyze and summarize patients’ data, create detailed reports, and track billing activities. Billing tools and software available in the market can automate data filling and detect errors. Data analytical tools can detect anomalies and fraud. These tools help identify trends that need immediate audits to clarify irregular trends.

### 7. Conduct Mock Audits

By implementing mock audits that resemble the conditions of an actual outside audit one can

easily find out areas that require attention. During a mock audit, the focus should be on:

- Analyzing a subset of patient records together with billing statements to detect the potential issue.
- Reviewing for coding and billing requirements as well as any regulatory and compliance requirements applicable to billing.
- Checking the comprehensiveness and the authenticity of records developed.
- Analyzing all the related issues to identify any potential risk areas.

In particular, mock audits help the practice to realize its preparedness in advance and to work on the issues that can arise in the course of an audit with an external auditor.

### 8. Develop A Response Plan For Audits

Auditing as a tool is critical for any organization as it helps to assess the organization’s

performance and provide recommendations on how it can improve its operations by identifying areas that need more attention. Staff should be aware of the importance of auditing as a tool in any organization. Your response plan should include:

- You should have a special audit response team with roles described on the team profile.
- Policies for accessing and handling key information requested by the auditor.
- The time frame for acquiring and bringing documentation.
- Information-sharing procedures in ensuring that the staff is informed about the protocols of audit processes.

### 9. Review And Update Billing Practices

Prompt auditing and updating of the billing and coding processes is therefore very essential in order to avoid issues that may lead to violation of the set standards. Key areas to review include:

- Code Selection: Be sure that you choose codes that will contain as much relevant and as up to date information as possible.
- Modifiers: Use modifiers to explain further the specific services offered in the statement of work.
- Bundling And Unbundling: Considering guidelines on proper procedures for the bundling and unbundling of services, it is advisable to follow the correct procedures.

Billing and coding errors must be avoided at all costs because they may result in an audit; hence, ensuring that one is up-to-date with the current practices can help.

### 10. Monitor Billing Metrics And KPIS

It is necessary to track billing metrics and KPIs that can show the effectiveness of the billing activity and the percentage of errors in the bills issued. Key metrics to monitor include:

- Claim Denial Rates: There is a problem or errors in medical billing if there are high denial rates for reimbursement.
- Days In Accounts Receivable (AR): Extended AR days can mean that some billing hasn’t been completed or some of the claims the hospital sent to insurance firms have not been processed.
- First-Pass Resolution Rate: Higher the first-pass complete claims resolution rate, which shows that the claims are being resolved at the initial instance with fewer errors.

## Conclusion

Preparing for medical billing can be daunting as it includes a number of steps that should be followed in order to make the medical billing process so efficient that it can face any type of audit. If we talk about the checklist, then it starts with a robust documentation process, compliance with policies and standards, utilizing technology, and training the staff members. Internal audits and mock audits should be performed in order to enhance the effectiveness of the process. Special attention should be given to medical billing practices to enhance efficiency. Using the above checklist, the medical billing process can face any audit and provide long-term success.

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