Why Your Practice Needs an External Billing Auditing Team?

We all need mentors or coaches in our personal as well as professional lives who will assess our performance, give us critical feedback, and help us create and put efficient systems in place for continued growth and development. External billing auditing teams are the guiding force that healthcare practices need for optimized billing workflows, a steady revenue cycle, and improved financial performance. 

So, if you are scouting for the most effective way to reinforce quality and safety standards in your healthcare billing while boosting revenue, opt for a third-party billing audit and let a team of professionals save you from costly errors. 

What Is an External Billing Auditing Team?

Think of an external billing audit as an independent and impartial review of your medical practice’s financial records, operations, and insurance billing workflow. A third-party billing audit team comes in to assess the accuracy, reliability, and fairness of the billing processes while identifying possible instances of non-compliance. 

Simply put, an external billing auditing team comprises medical billing specialists, financial experts, and professionals who are in direct communication with industry regulators. Their job is to review the healthcare organization’s billing records and patient charts and ensure that the medical coding and insurance claim filing meets the established standards, be it in the form of government regulations or payer policies. 

Partnering with an External Billing Auditing Team

Seeking the services of an external billing auditing team can have a positive impact on the financial health and sustainable growth of your medical practice. Third-party auditors deep dive into the clinical and non-clinical aspects of your practice, streamlining workflows, boosting productivity, eliminating errors, and slashing costs where necessary to make your two biggest stakeholders happy – your Patients and the Insurance Payers. 

By bringing an expert external billing auditing team on board, you can attain a range of benefits, each one propelling you toward success in its own unique way, as described below.

Improved Financial Performance 

The first reason to consider a third-party billing audit is the impact it can have on your practice’s financial performance. A highly specialized team communicates with you and assesses and analyzes your practice’s current financial standing, billing workflow, coding efficiency, claim processing methodology, and denial management style to identify strengths and weaknesses. From there, the team works its way toward pinpointing the exact reasons for the revenue shortfall and formulating strategies to maximize cash inflow. So, if you want to make your medical practice profitable, partner up with an external billing auditing team. 

Enhanced Operational Efficiency

Next, if you want to make your systems more efficient, reduce staff burnout, and improve their productivity, bring in an external billing auditing team. They are skilled in identifying imprecise, improper, and resource-wasting billing practices, such as manually verifying each patient’s eligibility and benefits. With the right tricks up their sleeves, this cohort of experts can increase the operational efficiency of your practice. For example, they can introduce billing tools and software to speed up the process or give your staff the required training for seamless practice management.  

Increased Regulatory Compliance 

Healthcare is a highly regulated industry, and based on innovations and advancements, these regulatory guidelines are frequently revised. Even the most well-established healthcare practices and seasoned professionals find it challenging to keep up with the changing regulations. Hence, special consideration must be given to compliance and avoiding hefty fines or class action lawsuits. External billing audits prevent non-compliance by introducing guardrails, like data protection, transparent communication, and fair billing, and training the staff on the current laws and regulations.  

Reduced Overhead Costs 

External billing auditing teams are proficient in identifying billing practices that increase overhead costs, such as paying subscriptions for expensive billing tools that are half as efficient as their newer counterparts. Besides implementing cost-cutting measures, auditors also highlight areas where the practice is leaving money on the table. For example, they may advise a practice to adopt better denial management techniques, like reworking the claims and appealing denials or chasing patient payments, for an improved revenue cycle. So, third-party billing audits are essential for overall cost-effectiveness. 

Decreased Coding Errors

Insurance payers, including the Maryland Local Health Department, cite incorrect coding as one of the most common medical billing mistakes that triggers claim denials. Coding errors can occur because of several reasons. The coder may have made a typing error during charge entry, selected the wrong code, or may not have received the updated coding guidelines for the revised CPT, ICD-10, or HCPCS codes. However, when external billing auditing teams assess the medical coding process, they ensure that coding errors are minimized. Their techniques might involve training the staff, setting up claim scrubbing tools, or both.  

Lowered Risk of Penalities & Lawsuits 

External billing audits are a proactive approach to mitigating regulatory audits. The team steps in to identify potential non-compliance with government regulations or payer policies and refines the billing process before violations occur. So, in other words, external billing auditing teams protect healthcare practices and professionals from fines and lawsuits that are the result of not meeting the industry regulations or payer policies. 

For example, the penalty for violating the Health Insurance Portability and Accountability Act (HIPAA) is up to $50,000 and one year of imprisonment. However, auditors can identify gaps in data security and advise the practice to ensure stricter measures for protecting sensitive health information. 

Does Your Practice Need an External Billing Auditing Team?

It is important to ask this question if you own, manage, or are associated with a healthcare practice. There are several instances where an external billing audit becomes mandatory, even if you already have an internal auditing team reviewing the billing processes on a daily basis. Let’s look at some of these scenarios in detail. 

High Claim Rejection or Denial Rates

An external billing audit is recommended if your practice faces a high claim rejection or denial rate. It becomes vital to identify the underlying causes of these frequent denials, chart patterns, and devise strategies to prevent payment delays in the future. The external auditors use research-based approaches and data analytics software to reduce the denial rate, improve the clean claims rate, and maximize reimbursements. 

Recent Regulatory Changes Impacting Medical Billing

Second, you must also seek the services of a third-party billing audit team if the government has revised existing laws or introduced new regulations that affect medical billing. Comprehending pages and pages of government whitepapers can be daunting, especially if you have dozens of patients to attend to in a day. You need experts to break it down for you into manageable, practical steps and ensure its implementation in your billing workflow. External billing auditing teams are pro at ensuring adherence to the latest regulatory changes. 

Scaling Healthcare Operations

Requesting an external billing audit is also advised if you plan on expanding your practice and rendering more services to your patients. In this case, your patient volume will increase, and so will your billing workload. You will need efficient processes to file error-free claims on time and collect your rightful reimbursements. Third-party billing audit teams can help out with that. They will carefully study your current revenue cycle and suggest strategies to optimize it.  

Identify Revenue Leaks or Fraud Risks

You must reach out to an external billing auditing team when you experience a revenue downturn or suspect fraudulent billing practices at your facility. Please note that surprise billing, upcoding, charging for non-covered services, or double billing are all considered fraudulent activities in healthcare billing, and the consequences of these can be dire. However, if you approach a third-party billing audit company, they can identify the exact reasons for revenue loss and help you stay compliant with payer requirements and industry regulations. 

External Billing Auditing Team vs. In-House Auditors

When it comes to improving the overall performance of a healthcare practice, especially its insurance billing process, providers have two options. They can either set up an in-house billing audit department or outsource the process to third-party auditors. Both come with their own advantages and disadvantages, which we have discussed in this section. 

Relying on an External Billing Auditing Team 

For most healthcare organizations, partnering up with external billing auditing teams is more effective in terms of cost and optimized revenue cycles. Third-party billing audit teams come on board at the right time with their specialized skill sets to prevent or resolve crises without disrupting the organizational structure or core operations of the practice. 

To simplify, these experts work as an extension of the existing teams for a specific time and offer the following pros and cons.  

Pros: 

• More cost-effective than hiring in-house auditors as, in this case, you are making a one-off payment for the featured service. 
• You get instant access to specialized knowledge and expertise. 
• Findings are objective and impartial, resulting in focused prevention or resolution techniques. 
• You obtain better results in terms of cash inflows, streamlined workflows, and regulatory compliance. 
• Problems are identified and solved in the specified time frame, as most third-party auditors charge by the hour.  

Cons:

• External billing auditing teams may not understand why certain processes and resources are necessary for your practice. 
• Communication may be delayed or ineffective if the auditors are managing the process virtually. 
• There might be security risks if you outsource to an unverified third-party billing audit team.  

Hiring an In-House Billing Auditing Team 

To be precise, some form of internal billing audit does take place at most healthcare practices, even if it is a solo practice where one office administrator usually handles billing and claim filing. However, this may be on a surface level and arranged on an ad hoc basis, for example, when practices apply for re-credentialing or when there is a noticeable shortfall in revenue. 

In contrast, when healthcare organizations become serious about improving their processes and financial performance, they may consider hiring billing auditors in-house to work with them for the long haul. While in-house billing auditing teams have their own pros and cons, it must be noted that due to budget constraints, small organizations cannot opt for this option. 

Pros: 

• More control over costs and processes. 
• A deeper understanding of the practice’s operations.
• Better rapport and communication with the staff. 
• Audits can be tailored for specific needs. 
• Add to the healthcare organization’s overall risk management process. 

Cons: 

• The team may have limited expertise and knowledge. 
• Contributes to the overhead costs of the practice (hiring and retaining the auditors).
• The auditors may lose their independence, and the findings may be biased. 

Team up with MediBillMD for Seamless External Billing Audits

Do you want to navigate the complex landscape of government regulations and payer policies and attain long-term success? Then, MediBillMD might be the trusted partner you need. As an external billing audit team, it ensures financial accuracy, regulatory compliance, fraud prevention, and optimized workflows. 

MediBillMD’s medical billing audit services include aging AR analysis, denials/rejections audit, revenue leakage identification, collection ratio evaluation, custom KPIs verification, and pending ERAs and payment posting errors review to secure a 360-degree business transformation for your practice. 

Based on your healthcare organization’s needs, MediBillMD’s team can customize the external billing audit to achieve one or more targets, such as improved compliance, reduced billing errors, increased revenue, better patient satisfaction, decreased claim denials, and focused staff training. With a comprehensive checklist in place, HIPAA-compliant certification, and a proven track record, MediBillMD has the potential to become your third-party billing audit service provider.