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Practice Management Alert

Is Retro Back? Your Auditing Style Guide

Published on Sat Feb 01, 2003

Should you run an audit before or after claims have gone out? The answer depends on whether your office can handle disclosing to your carriers the mistakes found in your audits, says Catherine Brink, CMM, CPC, president of Healthcare Resource Management Inc., in Spring Lake, N.J. Figure out whether your office should run prospective or retrospective audits.

Prospective Audits

Prospective audits are best for your office if you want your claims reviewed prior to the submission of the bill and you want to ensure coding accuracy, says Betsy Nicoletti, CPC, a consultant with Helms in Concord, N.H.

Prospective audits will work for you if you don't want to deal with the disclosure issues that retrospective audits raise, Brink says. With prospective audits, you can talk to the doctor and fix the claim, without the payer ever knowing the error.

Here are other details prospective audits have in common:

  • The communication is usually between the physician provider and the auditor.
  • The claims are time-sensitive, so you have to finish the audit quickly. The practice holds the insurance claim for the service until the auditor reviews it, and makes appropriate corrections and sends it out in timely fashion.
  • The audited claims may cover a limited range of codes.

    Because you're auditing the bills in a limited time period so they can go out, you may not see a full range of codes billed in that time period. You could choose a representative selection from the limited days worth of bills you have.

  • Services are actually coded correctly, so you're more likely to see payment.

    Retrospective Audits

    Retrospective audits are your practice's style if you want your claims reviewed after they've gone out to insurance companies and have been paid, Nicoletti says.

    But be prepared to deal with disclosure issues, Brink warns. You have to figure out how you will handle instances in which payers paid for overcoded claims, and you now know the claim's error. You must decide whether you would tell the payer and lose money and, more important, jeopardize your business. If you know you're overcoding and you don't 'fess up, you will face legal penalties for knowingly betraying payers.

    Here are other details that retrospective audits have in common:

  • The communication is usually between an attorney and the auditor. (An outside auditor would be under attorney-client privilege.) The auditor typically doesn't get the information directly from the provider.
  • They're not time-sensitive because you've already billed for the claims.
  • This type of audit can cover more codes used by the provider. You can select claims more randomly or choose based on frequency of code. Say a printout of three months shows you use 99213 50 percent of the time, so you select half your audited claims to have that code.
  • Auditing does not affect current payments. However, your practice has to decide what it's going to do about the disclosure to the payer, which could affect past payments. $ $ $

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