What Type of Internal Audit Is Done Before Reporting Claims?

Organizations frequently conduct internal reviews of their processes and data before submitting official claims. This practice ensures information is accurate and adheres to established standards, verifying the integrity of financial data and operational procedures.

This internal oversight helps organizations identify and address potential issues before they become public. It represents a commitment to self-correction and maintaining high standards in financial reporting. By scrutinizing their own records, entities can maintain robust financial controls and compliance.

Understanding Internal Claims Audits

The internal reviews performed before claims are reported are commonly referred to as pre-billing audits, pre-submission audits, or internal claims reviews. These internal quality assurance steps serve as a final check before claims are officially submitted to various payers, such as insurance companies or government programs.

These audits are performed by designated internal teams or personnel with expertise in billing, coding, and compliance. This process helps ensure all claims align with internal policies and external regulatory requirements prior to submission.

Core Objectives of the Audit

A primary objective of these internal audits is to confirm the accuracy of all submitted claims. This verification helps ensure that services billed precisely reflect services rendered and documented. Organizations also aim to maintain compliance with federal regulations, such as those governing protected health information under the Health Insurance Portability and Accountability Act (HIPAA), and various payer policies.

The audits also seek to identify and correct any errors before claims are formally submitted, which helps prevent rejections or denials from payers. Addressing issues pre-submission can avoid significant financial losses and reduce administrative burden associated with claim appeals. These reviews safeguard the financial integrity of the organization by minimizing potential overpayments or underpayments and maintaining a consistent revenue cycle.

Key Elements Examined

During an internal claims audit, specific components and data points are scrutinized. Reviewers examine medical coding, such as CPT (Current Procedural Terminology) and HCPCS (Healthcare Common Procedure Coding System) codes, to ensure they accurately represent the services provided. They also verify that ICD-10 (International Classification of Diseases, Tenth Revision) diagnosis codes precisely reflect the patient’s condition and support the medical necessity of the services.

The audit assesses whether proper documentation, such as medical records, supports the services rendered and coded. This includes checking for complete and legible entries that justify the billed procedures and diagnoses. Auditors also ensure adherence to specific payer guidelines and contractual agreements, which often dictate specific billing rules and documentation requirements. Correct patient demographics and accurate insurance information, including policy numbers and coverage details, are verified to prevent rejections based on administrative discrepancies.