Medical Auditing Made Simple: A CPMA Study Guide to the Audit Process
Medical Coding by Jen | CPMA Study Resources
Medical Auditing Made Simple: A CPMA Study Guide to the Audit Process
Does the medical audit process feel like a long list of terms that all sound alike?
Internal or external? Focused or random? Prospective or retrospective? Then you still have to choose a sample, gather the correct tools, review the records, explain the findings, and decide what happens next.
The good news is that medical auditing becomes much easier when you follow one decision path. This guide breaks the process into plain-language steps and includes a free eight-page CPMA Medical Auditing Study Pack to help you remember the rules.
What Is Medical Auditing?
Medical auditing is a systematic review of healthcare documentation, coding, billing, policies, and procedures. The auditor compares the medical record with the codes and claims to determine whether the service was supported, correctly reported, and handled according to the applicable requirements.
A medical audit may help an organization:
Identify coding, documentation, billing, or keying errors.
Educate providers and staff about documentation requirements.
Find compliance risks before an outside auditor discovers them.
Recognize undercoding or missed-charge opportunities.
Respond more effectively to payer audits, denials, and record requests.
Create corrective-action and monitoring plans.
The most important CPMA idea is simple: A coding conclusion must be supported by the medical record.
Auditing and Monitoring Are Not the Same
Auditing examines records, verifies information, and gathers baseline data to identify risk areas.
Monitoring is the ongoing review performed after the initial audit. It helps determine whether education and corrective action changed the behavior or billing pattern.
Memory tip: An audit finds the problem. Monitoring checks the fix.
Know the Main Types of Medical Audits
Audit Type | What It Means |
Internal | Performed by someone within the organization. |
External | Performed by a person or group outside the organization. |
Focused | Reviews one concern, service, rule, provider, or risk area. |
Random | Gives each service in the defined audit universe an equal opportunity for selection. It is often used for a baseline audit. |
Prospective | Performed before the claim is submitted. Coding may be corrected based on the existing documentation, but the documentation should not be rewritten to support a desired code. |
Retrospective | Performed after the claim has been submitted and processed. Findings may require additional review of claim corrections, missed charges, or overpayments. |
Peer Review | Uses another provider when clinical decision-making or the treatment plan needs evaluation. |
Aggregate Analysis | Compares data among providers or similar practices to identify possible undercoding, upcoding, or utilization outliers. |
The Five Steps in the Medical Audit Process
1. Determine the objective and scope
Start by writing the exact question the audit must answer. Then define the provider, payer, service, setting, date range, and patient population included in the review. A good scope also says what is excluded.
2. Select the sample
Choose records that fit the objective. The selection may be random, controlled, high-volume, high-risk, denial-based, or based on previous errors. The supplied CPMA chapter uses 10 to 15 charts per provider as a common baseline benchmark, but the final sample should always fit the purpose of the audit.
3. Gather the correct tools and resources
Use the rules that applied on the date of service. Helpful resources may include:
The correct-year CPT®, HCPCS Level II, and ICD-10-CM code sets.
Applicable E/M documentation guidance.
Payer and Medicare Administrative Contractor policies.
Local Coverage Determinations and medical-necessity guidance.
National Correct Coding Initiative edits and instructions.
Specialty guidance and office policies.
An audit tool designed for the service being reviewed.
4. Gather the documentation and perform the audit
Compare the medical record with the selected codes, claim data, and payment information. Review any available encounter forms, billing sheets, templates, and supporting documents. Record each variance and identify where the problem occurred.
5. Communicate the findings and take action
A useful audit report does more than list percentages. It explains the findings, identifies likely root causes, and recommends specific action. Depending on the results, the organization may need education, a policy change, claim correction, overpayment review, missed-charge review, or continued monitoring.
Three Common Beginner Mistakes
Starting without a precise objective and scope. If the audit question is vague, the sample and conclusion may drift.
Allowing software to make the final decision. An electronic tool can organize the facts, but medical necessity still requires human judgment.
Reporting an error rate without identifying the cause. A percentage does not tell the organization what to correct or how to prevent the error from returning.
Use the 30-Second A-U-D-I-T Check
A - Aim: What exact question must the audit answer?
U - Universe: Who, what, payer, setting, and date range are included?
D - Data: Which sample and records will fairly test the objective?
I - Instructions: Which date-specific code, payer, LCD, NCCI, and office rules apply?
T - Tell and track: What happened, why did it happen, who will act, and when will monitoring retest it?
Enter your email below for instant access to the eight-page Medical Coding by Jen study pack.
It includes colorful sticky notes, an audit-process map, a memory story, the top three beginner mistakes, a seven-day learning plan, three mental models, a 30-second checklist, and a practice case.
GET THE FREE CPMA STUDY PACK
Ready to Learn More About Medical Auditing?
If you are preparing for the CPMA® exam or want to understand medical auditing beyond memorizing definitions, explore my CPMA course resources and weekly instruction.
Created by Jen Brewer, CPC, CPMA, CPC-IAAPC Approved InstructorMedicalCodingByJen.com
Educational study aid only. Always confirm the code set, documentation standard, payer policy, and regulatory guidance applicable to the date of service and audit scope. CPT® is a registered trademark of the American Medical Association. CPMA® is a credential of AAPC. Medical Coding by Jen is not affiliated with or endorsed by AAPC or the AMA.
Will add notes to book.