External Medical Billing Audit
California was the first state that enacted the health insurance marketplace after President Obama signed into law the Affordable Care Act. But it is not surprising considering that it is the most populous area with nearly 40 million people. Apart from New York, it is the most recognizable state from people around the world, due to the lure of Hollywood.
However, Californians also badly need healthcare as residents who will be older than 65 years old would double from 4.3 million in 2010 to more than eight million by 2030.
There are quite a few medical practices in the area and if you’re one of them, you should know what medical billing audits are. If you’re not too sure, you can ask for the help of medical billing companies in California or keep reading below.
What is a Medical Billing Audit?
Currently, there are about 400 hospitals in California, and they all comply with the medical billing and coding requirements of the HIPAA. And a crucial element of the compliance is the medical billing audit to make sure that your documentation and processes are in line with the industry standard.
Unfortunately, some people still have the idea that the assessment only pertains to recording the numbers. However, it’s more of a procedure to determine if your physicians are giving the proper diagnosis and assigning the correct codes for them.
Companies in the healthcare industry, whether for-profit or non-profit, are required to adhere to strict regulations in their operations and handling of patients. For example, medical billing companies in California are familiar with the seven elements of HIPAA compliance by the Office of the Inspector General (OIG).
What are these seven elements?
1. Adopt all the compliance steps and policies
2. Assign a chief compliance officer
3. Craft an education and awareness program
4. Create a hotline that will accept anonymous tips
5. Make sure that all disclosures are acted upon by creating a task force
6. Evaluate and rectify all the identified problems
7. Install a medical billing audit measure
On the seventh step, you now have a choice of whether you will create an internal clearinghouse or outsource the auditing task to medical billing companies.
Why You Need an External Medical Billing Audit
Now, for a small healthcare practice with only four or fewer physicians, it might seem that making their own audit of their medical billing procedures would be the best route to take. The competition is already difficult enough, and they might have seen some other small clinics getting swallowed by conglomerates.
On the other hand, the medical billing audit demands precision. The two most crucial elements of the process are documentation and coding. For example, when you input the wrong code, you might lose profits when you present the bill to Medicare or other health insurance companies for payment. Imagine if you have been using the same wrong code this whole time?
But it is not even the worst news. What if you over coded on your medical billings? If you managed to rectify the issue in time, then it would be no problem. However, if the issue is systemic, the OIG might discover it, and then your company will be flagged. Medicare will demand reimbursement, and you will face a fine, as well as a comprehensive review.
When you are already trying to keep your practice above water, any such setback will be disastrous. If your staff is limited, there is already no time to conduct a comprehensive audit. Also, like it or not, the assigned compliance officer might suffer from bias, mainly if the survival of the business depends on it. In the same vein, the management may also ignore the recommendation found in the internal audit.
Instead, when you opt for an external medical audit, you guarantee objectivity in the process since the auditors do not have any conflict of interest. They are also familiar with compliance standards and determine if you meet those benchmarks. And when they do make a recommendation, it is cloaked with authority that the clinic will be compelled to adopt corrective measures.
Indeed, the small practice may take a hit when deciding to hire external medical billing auditors. However, the expenses should be considered an investment that will ultimately yield returns in the form of compliance with industry standards.
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