5 Reasons Why Coding and Documentation Audits are More Important Than Ever

Auditing is a crucial component of governance and quality control. When ICD-10  (International Classification of Disease, 10th version) was implemented, numerous healthcare organizations adopted new electronic health record (EHR) technology. It provided record-keeping in considerable detail, outlining more than 71,000 procedure codes compared to just over 3,800 in ICD-9. The eleventh revision contains around 17,000 unique codes, and more than 120,000 codable terms – adding to the complexity of coding. Healthcare providers would do well to implement technologies powered by artificial intelligence (AI) and natural language processing (NLP) to make the most of this complex coding system. Leveraging technology can result in fewer billing and data errors.

The Growing Need for Audits

Clinical documentation improvement (CDI) is implemented and enhanced with the help of findings from medical coding audits. Auditing CDI teams can optimize diagnosis-related groups (DRGs). The Centers for Medicare and Medicaid Services (CMS) Recovery Audit Contractor (RAC) program, which has recovered millions in incorrect payments in Medicare and other insurance schemes, has illustrated the need for effective CDI.

Following are five reasons why audits are more important than ever.

1. Enhanced Data Quality: Reliable data is a cornerstone of healthcare. The right compliance auditing program significantly improves data quality, informs stakeholders, provides a rigorous feedback loop, and supports any potential follow-up with physicians, coders, or payers. Audits enable better reporting and research, making it easier for healthcare organizations to secure funds or grants.

2. Higher Operational Efficiency: Manual medical coding and billing is a significant challenge for providers everywhere. Each manual transaction costs $4.40 more than each automated transaction, according to the 2018 CAQH Index Report. The report also shared that automating claims-related dealings can save healthcare providers around $11.1 billion annually. However, the industry has made modest progress to shift from manual to fully-automated processes. Automated auditing can spot mistakes and highlight the root causes for inconsistent coding and documentation. If this is perceived as enhancing rather than replacing their current work, it may boost employee morale and productivity.

3. Improved Patient Safety: According to an article in the International Journal for Quality in Health Care, internal auditing decreased patient-related adverse events by 4.8%. Real-time auditing can improve patient safety by quickly identifying errors and providing feedback to medical staff. Since auditing identifies the areas where gaps exist, changes in clinical policy and practice can be implemented with confidence.

4. Improved HIM-Physician Relations: Accurately conducted audits by health information management (HIM) personnel weed out documentation errors caused by all parties involved, including physicians. With the proper procedures in place, these two key parties involved in patient care can better understand how one another's work processes affect them. Physicians who submit incomplete or incorrect documentation can collaborate with HIM staff to learn more about the best procedures. Greater transparency and consistent feedback guarantee higher-quality work.

5. Enhanced Accuracy of Reimbursements: Hospitals and care facilities have long been plagued by underpayments and overpayments. According to a CMS report, RACs identified and collected $162 million in overpayments during FY 2019 alone. Correct auditing procedures guarantee that complications and comorbidities (CCs) and their significant variants (MCCs) are adequately documented. The seriousness of any illness is, of course, decided by the presence or absence of CCs and MCCs, which determines payment for hospital services. In other words, proper auditing identifies these flaws in billing procedures and guarantees that both organizations and patients receive the compensation they are entitled to.