Conducting a thorough medical billing audit has multiple benefits: It can help your ambulatory surgery center (ASC) reduce errors, improve revenue recognition, and increase overall profitability.
Understanding how a medical organization utilizes and allocates its financial resources is critical for maximum profitability and financial success. Failing to run in-depth and periodical medical billing audits can waste valuable time, preventing ambulatory surgical centers from reaching their full potential. Conducting this type of medical audit can also safeguard your center from fraudulent claims or compliance-related problems, which can be especially crucial when dealing with Medicare patients or complicated insurance plans.
Medical billing audits are also an important aspect of revenue recognition, which stipulates how and when revenue should be recognized—when realized, not just when cash is received. Identifying potential shortcomings related to medical billing can help increase profits and avoid unnecessary charges related to medical or insurance reporting errors.
Does your ASC need a medical billing audit? Do you want to improve revenue recognition but aren’t sure how to get started? Here’s a step-by-step guide to performing a successful medical billing audit:
Designate a team to carry out the audit, clearly define your goals, create a timeline, and outline the process for conducting your medical billing audit.
First, decide how many people should be involved in your medical billing audit and how thorough it should be. Look at the number of employees who work in the revenue cycle at your ASC, your on-staff billers and coders, and how many patients you currently have. Then, give yourself a clear timeline. How long do you have to complete your audit? What goals do you hope to accomplish?
Choose a random number of patients per insurance provider and look over the documentation of each patient. This should give you a general idea of how many cases are overcoded or undercoded, and if any claims were processed incorrectly or not processed at all.
Conduct an honest assessment of your current medical billing process to identify any problematic trends and/or areas of increased risk. Examine billing reports and certain key metrics: days spent in accounts receivable, net collection percentage, accounts receivable aging, and so on. Compare these statistics to previous metrics—whether monthly, annually, or both—to pinpoint any potential issues or problems.
It is also important to consider timing. A successful billing cycle timeline follows these steps:
If your current billing process takes much longer than this, it may be time to reevaluate and optimize.
Once you’ve obtained enough information, create internal benchmarks that can be measured against both internal and external key performance indicators to track and oversee your progress over time. These metrics should be clear-cut and defined, giving you easy ways to tangibly monitor your journey. These benchmarks can vary, from lowering the amount of rejected claims your office encounters to increasing the amount of revenue each patient brings in.
This is also an ideal time to identify internal practice issues and alert employees and providers of any areas that may need improvement, such as lack of documentation or disorganization among different departments.
With benchmarks in place to hold your ASC accountable, use the billing audit results to guide your improvement efforts. This step will improve revenue recognition and optimize medical billing processes.
Start by encouraging payers to pay the appropriate contracted rates on time, following up with delinquent accounts when needed. This can also help you create a proactive strategy to deal with late payments and accounts that are consistently late.
Once your audit is complete, don’t forget the importance of regular checkups. Repeat the same quarterly, or at least semiannually, to ensure your revenue cycle is continually improving.
If you find the medical billing audit process too lengthy or time-consuming, be open to exploring other options. Consider outsourcing your future medical billing audits to experts such as Amblitel, who possess the in-depth knowledge and experience required to fully optimize your ASC’s medical billing/revenue cycle management.
Get in touch with Amblitel today to learn how you can optimize your revenue cycle management, improve your revenue recognition, and ultimately increase your profitability with accounting and financial management services.