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8 Key Points to Consider (and a Checklist to Use) When Selecting an External Coding Audit Company

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ASCs should incorporate an external audit into their compliance programs. Formal coding audit protocol should define the purpose of the audit, frequency of review and sample size. The difficult part is selecting a credible auditing company. Ideally, you should interview several audit companies, not just one. The interview process can be tedious, but remember, your final selection will impact your facility's bottom line. Consider the following key points when conducting your search.


1. Experience with ASC reviews

Facilities will want the assurance its external auditing company has plenty of experience in actual ASC auditing. Don't expect a company with auditing experience focused solely on physician E&M audits to instinctively know the intricacies of ASC coding, and ultimately ASC auditing. Think about it: Would you expect your orthopedic surgeon to know how to perform all ENT procedures simply because he or she is a "MD"?


Ask for references from other ASCs who currently utilize the company's service(s). Inquire about the qualifications of the company auditors who will be performing the audits.


2. Quality and usefulness of the review

Be sure you understand what the audit includes. While every audit company has its own method of reporting findings, at the very least the report should provide an overall percentage of accuracy versus variances, both in the preferred form of code over code reporting, and in the form of a summary report. The audit company should provide a spreadsheet that reflects a breakdown of the coding, to include a review of ICD-9-CM, CPT, HCPCS and modifiers. The audit company should include any indications of documentation deficiencies, and whether the operative documentation supports medical necessity pending carrier coverage policies. A Summary Report of the spreadsheet should include audit scores, trends, and recommendations for education, documentation improvements, claims corrections/rebills/refunds and problem resolutions.


3. External auditing company's processes

Find out who selects which accounts to audit, the audit company or your ASC. To maintain the integrity of the audit, the audit company will typically select the accounts to be audited. Will the auditors perform a random audit first, possibly followed by a more focused audit pending initial findings? Will all financial classes (Medicare vs. commercial) be included, again followed by a more focused payor audit pending findings?


Ask the audit company what kind of chart documentation it will require for the review: operative report; history & physical; pathology (if applicable); code selection (CPT, ICD-9, HCPCS, modifiers, etc.) coding sheet or claim form; and/or carrier information (commercial vs. Medicare, demographics, etc.).


You should also determine whether the audit company accepts paper submissions, or requires electronic access? In addition, ask about their standard for counting coding variances, and how soon your ASC can expect the preliminary audit report.


4. Utilization of credible resources

Ask the auditing company what resources it utilizes to determine variances? Are the specific references provided within the audit as a form of backup? Reference materials such as current editions of coding manuals, AMA guidelines, specialty guidelines, NCCI edits and CMS or other carrier policies (i.e., LCD, specific carrier billing policies/contracts) should be utilized. The auditing company should never mark a variance based on "opinion" alone.


5. Audit findings review

Once the audit is completed, who will receive the preliminary audit results? The coder should always have the opportunity to review the preliminary audit, and then explain the rationale behind his or her coding. Carrier specific written directives should be provided by the ASC prior to the initiation of the coding review.


Find out whether the auditing company will provide your facility/corporation with a comparison between current and previous audits within the executive summary. If a variance trend has been identified in a specific specialty, your auditing company should recommend a more "focused" audit for that specialty as soon as possible.


6.Approachability — Reconsideration of initial scoring

Medicare and RAC have a reconsideration phase, so you should expect the same from an external auditing company. Your facility should review each account where a variance is indicated. Your ASC will need to communicate with the auditing company per your corporation's/facility protocol regarding any disagreement with the audit findings. Don't settle for an overall score of 87 percent, when you could receive an overall score of 94 percent with documentation cited from credible sources. Facilities should rebut variances and expect a reconsideration of preliminary scores based on credible information. Remember, errors should never be based on "opinion".


7. Post-audit call

Is a post-audit conference call included as part of the external coding audit to answer questions regarding the errors and comments found within the audit? Remember, you should not be intimidated by a conference call. Consider it an educational opportunity for the facility and for the auditor. Avoid external auditing companies with an "It's our way or the highway" mentality. The potential for human error runs both ways; the auditing company may be incorrect at times.


After the audit is complete and the coder's rebuttal (additional information/rationale) has been considered, a final summary report and a revised audit spreadsheet (if applicable) should be submitted.


8. Problem Resolution Assistance

Your external audit is complete for the year. What next?


Don't wait another year to verify your coder's understanding of procedures missed during the audit! Find out how your coding audit company can help ensure your coder is educated regarding the audit variances. The coder may need more than a blurb/comment on an audit report or a post-audit conference call; he may benefit from some ongoing education for a short period of time. Will the audit company audit or "shadow" the coder on specialty accounts missed during the audit to ensure she is coding correctly? If your ASC doesn't have the expertise to educate your coder on a specific specialty, does your external auditing company provide this service, or offer other alternatives?


A word of warning: While outsourcing the coding to the external audit company may be an alternative, be cautious of overbearing audit companies providing only this option. Make an educated decision prior to acting on impulse.


Checklist for selecting an external coding audit company


Here is a checklist you can use when considering external coding audit companies.


Checklist for Selecting an External Coding Audit Company

Experience with ASC reviews

Yes

No

Notes

1. Will you provide references from other ASCs who have utilized your external auditing service?




2. What are the qualifications of company auditors who will be performing the review?




Quality and usefulness of the review

Yes

No

Notes

1. Will the report provide an overall percentage of accuracy versus variances? Will it include both:

  • A code over code reporting
  • A summary report




2. Will the report include a spreadsheet with coding breakdown? Will it include at minimum a review of ICD-9-CM, CPT, HCPCS and modifiers?




3. Will the report include indications of documentation deficiencies?




4. Will the summary report of the spreadsheet include audit scores, trends, and recommendations for education, documentation improvements, claims corrections/rebills/refunds and problem resolutions?




External Auditing Company's Processes




1. Who selects which accounts to audit (ideally the audit company)?




2. Will the auditors perform a random audit first, to be followed by a focused audit pending findings?




3. Will all financial classes (Medicare vs. commercial) be included, followed by a focused payor audit pending findings?




4. What kind of chart documentation does the company require for review (operative report, history & physical, etc.)?




5. Does the company accept paper submissions or require electronic access?




6. What is your company's standard for counting coding variances?




7. How soon can we expect the preliminary audit report?




Utilization of credible resources

Yes

No

Notes

1. What resources do you utilize to determine variances?




2. Are the specific references provided within the audit as backup?




Audit findings review

Yes

No

Notes

1. Who will receive the preliminary audit results?




2. Will the company provide a comparison between current and previous audits within the executive summary?




3. Will the company recommend a more "focused" audit in specific specialty pending findings?




Approachability – Reconsideration of initial scoring

Yes

No

Notes

1. Does the company have a reconsideration phase, similar to Medicare and RAC?




2. Does the company include a "post-audit call" as part of the external coding audit?




3. Will the company submit an amended final executive summary report and a revised audit spreadsheet pending reconsideration results?




Problem Resolution Assistance

Yes

No

Notes

1. Does the company offer coder shadowing?




2. Does the company offer specialty coding education?




3. What other options does the company offer?





Cristina Bentin can be reached at This email address is being protected from spambots. You need JavaScript enabled to view it. . Learn more about Coding Compliance Management.

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