Why Billing Audits are Good for You

In an unpublished, informal study (conducted by me), being audited by an insurance company ranks # 1 amongst physicians’ biggest fears in revenue cycle management. Having worked with clients going through an insurance audit I can tell you that it is painful, but I believe it would be actually benefit physicians if insurance companies conducted more (meaningful) audits.

In the US police turn on their sirens only when responding to an emergency, but in many European countries police sirens are on all the time. With sirens blaring everywhere, it makes sliding through that red light much less tempting. If the audit sirens were blaring a little more consistently, we could catch the smaller offenses and prevent the big offenses from happening.

There is real, explicit fraud in healthcare and physicians should want the insurance companies to help prevent this. If insurance companies were to randomly audit .01% of a physicians claims (with a minimum of 500 claims), physicians who were acting in bad faith might be mindful of being caught and it would be less taxing on physicians overall.

In the last year, we have seen a significant increase of insurance companies requesting medical records retroactively. Many insurance companies have setup online portals that allow medical records to be uploaded for review, but there are quite a few that are requesting either mail or faxed records. Since February 2020 we have seen Blue Shield of California request medical records for many of our clients, yet they do not have an online portal for submission. This is ludicrous. Relying on snail mail and faxes (we just submitted 381 pages of records via fax for one patient to Blue Shield) is unreliable and outdated. I’m all for audits, but the mechanics need to be much more efficient.

Insurance companies, patients, and providers need to be on the same page: make auditing more frequent, proactive, and easier to navigate. Fraud will go down, insurance premiums will go down, and physicians who are practicing in good faith can rest assured that nightmarish audits will be a thing of the past.