To the owner of a physical therapy practice, almost nothing can give you more terror-filled nightmares than the possibility of a billing audit. Avoiding an audit is always the preferred way to go. When your income stream comes from the payouts of Medicare and your clients’ insurance companies, adhering to good billing practices is vital. The checklist that follows may help you navigate away from a billing audit. Or if an audit is looming, this list may help get you ready, as may working with an external billing and collections service.
Did You Check Your Work?
Dumb question, right? Wrong. So many billing audits are triggered because billing claims weren’t checked properly. Think of billing like a carpenter thinks about cutting wood. The carpenter measures twice and cuts only once. That means the carpenter has devised an organized system. He’s learned from bitter experience that mistakes are wasteful and costly. The same applies if you want to avoid a PT billing audit. Before you submit your billing to insurance companies, check your work several times. Then have someone else check it. If an audit is on the horizon, make sure all your paperwork is in order and consistent.
Better yet, trust your work to a proven PT billing and collection agency. It will be a huge weight off your shoulders.
Are You Overbilling?
A surefire way to trigger a billing audit is to overbill. Regardless if it’s accidental or intentional, overcharging is still overcharging. And auditors don’t like it one bit. There are a few ways this can happen:
- Overcharging – when additional charges and/or unnecessary codes are used for treatments that were not performed.
- Upcoding – when you use codes for treatments and/or services not provided.
- Overbooking – when you book patients for no reason other than getting more revenue.
To avoid an audit, always double check the codes you use are the right ones, don’t schedule appointments that aren’t needed, and don’t tack more to the bottom of the bill.
Do You Know Your Contracts?
Each insurance company has its own way of doing things. You need to know your contracts with insurers front and back. When incorrectly followed, third-party payer contracts can be a quick road to a billing audit, among other very serious issues. To some extent, contracts are negotiable, so when you see something you don’t like, don’t hesitate to contact the payer. Review your contracts and pay close attention to the following:
- Treatment authorization.
- Imbursement terms.
- Requirements of cancellation (and included penalties).
- Late payment interest.
- Filing schedule.
- Denied claim appeals.
- Length of claim.
- Requirements for additional service or providers.
- Advance notice required for proposed changes.
Are You Patient Bartering?
If you’re bartering with your clients, a billing audit will most likely be in your future. The solution is simple: don’t. Wanting to attract more business or to be more flexible to clients is fine, but always be beyond reproach. You cannot waive copays, or accept things in place of payment, or any other type of bartering. Make sure everyone on your staff is following the same set of rules. In the end, you will be held accountable. If you want to do some pro-bono work, build it into your operational budget and keep a close watch on it.
Mis-billing is Very Possible
If you’re above 4% in denials, you have a problem. Check everything and ensure there are no timing problems, input issues, or errors in manual coding. For clean billing, you need a clean paper trail. Always use the most recent (and accurate) billing code modifiers, look for typos, and make sure the paperwork is filled in completely.
Of course, the simplest way to avoid a billing audit – or to navigate one smoothly – is to entrust your billing process to a specialist PT billing company. You’ll have the best in the industry on your side, which should keep some of those audit nightmares at bay.
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Tags: medicare audit physical therapy, physical therapy audit checklist, physical therapy billing audit
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