Medical Coding Audit_Save Your Practice From Losing Millions of Dollars

Medical Coding Audit

Are you suffering from an unstable financial situation? If your answer is yes, then it’s the right time to conduct medical billing and coding audits. Because it is the best possible way to highlight the problematic areas in the clinical documentation of rendered services.

So, to secure efficient revenue cycle management and reduced accounts receivable, medical practitioners prefer to give importance to regular audits.

We all know that medical coding is not only crucial for financial stability. But it is also important from a compliant perspective. It is the process of translating patients’ diagnosis, treatments, medical services and equipment into universal medical alphanumeric codes.

Why is a Medical Coding Audit Essential?

No doubt the constant changes have made medical coding extremely complicated. But you cannot afford any negligence in this procedure. Because some coding errors such as: upcoding, unbundling, under coding can land healthcare providers in legal troubles.

For example, they have to face federal penalties, heavy fines, and even imprisonment. Because the above-mentioned coding errors are considered as medical fraud and abuse.

Therefore, frequent internal or external coding audits can uncover inaccuracy issues, i.e. outdated codes or even fraudulent billing. It is a way to see if your medical billing system runs smooth or needs an upgrade for improved performance. Which helps medical practitioners to get completely reimbursed and maintain regulatory compliance.

In addition to this, by conducting a regular coding audit, you also get a better idea about the inconsistencies. That might not be the problem for the time being but later can be disastrous.

Healthcare providers can hire external auditors or hand over this responsibility to the existing staff. They must have the required skills and experience to audit medical record documentation.

Usually, the basic goals of medical coding audit are included:

  • Identify errors in medical documentation.
  • Identify inefficiencies in payer reimbursement.
  • Determine the usage of incorrect, or outdated medical codes.
  • Identify errors in the claims management process.
  • Uncover fraudulent billing practices, i.e upcoding, under coding, unbundling.

Before diving into further discussions, let’s discuss the coding errors.


it is a fraudulent activity that occurs when medical coders use the codes for more expensive services than actually performed. Sometimes these errors are committed intentionally to generate maximum revenue.


In the case of under-coding, the code used is for less-expensive services. Usually, these errors are committed intentionally to save the practice from the federal audit.


It occurs when coders use multiple CPT codes for a single procedure.

Topmost Benefits of Coding Audit

Have you ever thought, how can coding and billing audits benefit your healthcare facility? Here are the following benefits of conducting a regular business audit.

1. Reduces Billing Frauds

Medical fraud and abuse have become the biggest issue for healthcare providers.

As we have already discussed that if you have a history of billing fraud, you can face critical challenges. However, you can prevent such errors by training your billing and coding staff.

More importantly, medical coding audit can uncover improper billing practices, whether caused by error or fraud. The audit reports enable healthcare providers to make wise business decisions regarding the hiring and training of the administrative staff. Which is essential to prevent future billing mistakes.

The most common reasons for billing frauds are:

  • Lack of clinical documentation.
  • No documentation at all.
  • Lack of medical necessity.
  • Incorrect medical codes/modifiers.

2. Improves Accuracy

Accuracy is vital to streamline the entire healthcare revenue cycle management. Because it helps you to avoid compliance consequences, financial crisis, etc.
Medical coding audit can identify issues, such as poor documentation, that affect coding quality. Poor documentation can lead to the incorrect transformation of diagnosis and medical services into universal medical codes. It also makes the coding process extremely complicated and increases the chances of medical fraud.

However, the coding audit provides detailed insight and feedback about areas of clinical documentation that can be improved. This includes identifying missed cases and making sure all coding data is recorded properly.

Hence, establishing a regular audit helps you to maintain the best coding practises for the well-being of your healthcare facility. Most importantly, you can easily identify the areas of improvements that can reduce the risk of claim denials.

How Often You Should Have an Audit?

The frequency of medical coding mainly depends on the size of the organization, the rate of staff turnover, and regulatory updates. However, in general, the industry experts recommend an external coding audit at least once a year.

But some healthcare facilities prefer monthly audits to enhance the productivity of your medical practice.

It’s pertinent to mention here that monthly coding audits help medical practitioners to catch errors more frequently. In this way, they can fix the issues that affect the revenue cycle management. Which ultimately helps healthcare providers to uplift their bottom-line.

Furthermore, the regular coding audit can also keep medical coders updated with the latest changes as well as regulatory requirements. Which enables them to avoid common errors that can lead to claim denials.

Medical Billing Benefits is an insightful healthcare newswire. Which contains the most up-to-date news on all aspects of health, medicine, and well-being. Stay tuned for the latest updates in the medical industry.

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