10 things to know about ASC coding audits

A coding audit is critical to helping ensure ambulatory surgery centers (ASCs) receive appropriate payment for services provided to patients. This process, which is a review of codes submitted to payers and the comparison of those codes against what is supported in the documentation, must be performed on a regular basis or ASCs risk making coding errors that can leave money on the table.


Here are 10 things ASCs should know about coding audits.

1. Coding audits can provide significant insight. A coding audit can help you understand which of your ASC's claims are being billed correctly and which ones are not, providing you the opportunity to correct the cause(s) of problems.

When claims are billed incorrectly, the result can include loss of revenues to the facility, whether from undercoding procedures, missing procedures that could be coded or missing the coding of implants, for example.

A coding audit can also identify instances of upcoding. Upcoding can bring in unearned revenue that the ASC will need to return if the mistake is identified by the payer. Upcoding, if perceived as intentional, can trigger regulatory scrutiny.

2. External audits are recommended. While an ASC can perform its own internal coding audit, it's wise to seek out an external vendor to perform the audit. An internal audit may be biased since the individual(s) performing the audit is familiar with the coders and/or the coding processes in place. An external auditor will be in a better position to examine information objectively and focus the examination solely on what is in the documentation.

3. ASC-experienced auditors are preferable. While bringing in an external auditor is important, finding an auditor with ASC experience is critical. An individual with ASC experience will better understand the minutiae of ASC coding.

Even auditors with outpatient surgery experience but not ASC experience may come up short in their auditing effectiveness. They might lack an understanding of correct modifier usage in the ASC setting or how to capture implants correctly. These are processes that ASCs typically perform differently than other outpatient surgery settings.

4. The audit should examine a meaningful number of charts. There's no recommended number of charts to include in an audit. Rather, a good figure to target is 5-10% of the total volume for a given time period. Include a large enough selection of cases to help ensure you gain a strong understanding of your ASC's coding strengths and weaknesses.

If you audit too few charts, you will lack a substantial enough sample size to get strong results; audit too many charts and the information gleaned is more likely to become repetitive and not necessarily helpful.

5. Random, focused audits are best. There are different ways to approach an audit in terms of case selection. You can perform a straight random audit, which is an entirely blind, arbitrary selection of cases.

A likely better approach would be a random, focused audit. This approach still entails arbitrarily selecting cases, but it's doing so within certain parameters to help ensure all surgeons and/or specialties you want audited are addressed, with a good sample size of each included.

If you identify quality issues through a random, focused audit, you will be in a better position to drill down and perform a more focused audit of a specific surgeon or within a specific specialty.

6. Dictate audit frequency by your compliance plan. Your ASC's internal compliance plan should identify the frequency for coding audits, whether they be monthly, quarterly or semi-annually.

A quarterly audit is likely the best approach. At this frequency, you can stay atop of findings and identify concerning trends before they develop into larger issues.

7. Audits should examine many areas. A coding audit, when performed effectively, will review many different components of an ASC's coding processes and performance. An auditor should look to see that the ASC's coders indicate a strong understanding of ICD-10 guidelines and can apply those rules consistently across the board for all the ASC's case types and specialties.

The auditor should determine whether a coder has missed guidance issued by the American Medical Association for a specific case type. There's a high probability that if a coder misses a detail on one case, the detail has been missed on many cases.

A good auditor will also check for physician documentation deficiencies because of their impact on coding. While the auditor may not closely review all physician documentation, if something is missing from the documentation vital to correct coding, the auditor should identify this shortcoming.

8. Education needs to be a critical component. A good coding audit will provide your ASC's coders with the appropriate references and resources so they can understand the reason for their errors and correct those problems going forward.

9. Audit summaries should cater to the needs of non-coding staff. Coders may not be the only people in your ASC interested in learning about the audit's results. That's why it's worthwhile to seek a coding audit vendor that also provides a written summary in easy-to-understand language for non-coding staff (e.g., business office manager, administrator) who might want to review the information.

10. Follow-up audits are key. If an initial audit identifies deficiencies, it's worthwhile to perform a follow-up audit after coders receive their education. This will allow you to better ensure coders appropriately implemented those changes necessary to correct their mistakes.

Mandeara Frye (mfrye@surgicalnotes.com) is director of coding for Surgical Notes. Surgical Notes is a nationwide provider of revenue cycle solutions, including, transcription, coding, revenue cycle management, and document management applications as well as revenue cycle services such as coding audits and billing for the ASC and surgical hospital markets.

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