Whether your coding staff is new or experienced, it's important that their work be audited by an outside firm once a year. Here's how to do this economically and efficiently.

What kind of audit?
One of the first things to consider when choosing an audit company is determining whether you need a comprehensive audit or a coding audit.

• Comprehensive audit. For this type of audit, the auditor will need to be on site and have access to all patient files, fees and insurance contracts. The auditor will analyze the documentation and coding of the charts, the procedures billed to the insurance companies, your center's fee schedule, and the reimbursement from insurers and patients. This type of audit usually takes four days. Upon completion of the audit, the company will prepare a report for you documenting all errors and areas that need improvement. This report is normally quite long and can take the audit company weeks to complete.
• Coding audit. An off-site auditor compares documented procedures to billed procedures. In preparing for this audit (also referred to as a desk audit or an off-site coding audit), you'd supply the company with copies of patient charts and claim forms that it has selected. After the company completes the audit, it destroys the copies of the patient records. On average, this type of audit takes three days to complete. The company will prepare a report detailing the errors and areas needing improvement.

I recommend a comprehensive audit every two years and a coding audit at least once a year. Ideally, you should perform a coding audit every six months. I suggest an audit in February that covers the procedures billed from July through December of the previous year and another audit in August that covers the procedures billed from January through June of the current year. Such a schedule covers coding guidelines from the previous year in addition to the current year.

Cover all cases and coders
Once you've determined the type of audit you need, answer these questions to determine the scope of your audit.

• What's your annual case volume?
• How many specialties and doctors?
• How many coders on staff?

Case volume is the key factor in determining how large an audit you'll need. The standard surgery center audit involves 2 percent to 10 percent of your charts (see "Determining the Number of Charts for Audit"). Your audit should contain charts from every specialty and surgeon. In addition to covering all specialties and surgeons, you'll also want to cover all coders.

Now that you've determined the type and scope of audit your facility requires, the next step is to find the right audit company. Many companies will perform a chart audit, but only a few specialize in surgery center coding and reimbursement guidelines. The most common mistake you can make is assuming that the audit firm you use for your accounting records can also perform chart audits. Using a company that doesn't specialize in surgery center guidelines will jeopardize the audit's outcome. For example, don't let your auditor mistake you for a provider's office or hospital outpatient department.

The next step in choosing your audit company is investigating the auditors and their end product. Before contracting with a firm, request credentialing documentation of the auditor(s) who'll perform your audit, as well as sample audit reports.

Not only should the audit firm be specialized in surgery center guidelines, but the auditor should be specialized as well. You want an auditor who's credentialed and experienced in surgery center billing. You can't afford to let an auditor's learning curve diminish your audit's value. Keep in mind that your audit is ineffective if the end result, the report, is incomprehensible or inaccurate. The report needs to contain enough detail that your coders can recognize and learn from their errors, and comprehensive enough for you, the administrator, to highlight problem areas or problem coders in your organization.

Just as you work hard to find the best prices for your surgery center inventory, don't back down from investigating prices for your audit. Yes, even companies that perform audits need to be audited. During a recent search for an audit company, I was quoted prices from $1,500 to $35,000 for an audit of 150 charts. In order to separate the reasonable audits from the overpriced audits, look at what's included in the price, such as staff education and travel expenses. Also, find out if the quote is based on the number of charts or the estimated time it will take to audit the charts. Stay away from companies that don't quote a set price, only an estimate. If they don't know their business well enough to provide a set fee, what will the final product look like? As always, don't send any information to a company without a signed HIPAA Business Associate Agreement and a signed contract outlining the terms of the audit.

The most important aspect of any audit is that it must be random. Coders shouldn't see the audited charts until the audit has been completed. To ensure the integrity of your random audit, someone other than the coder should

• send the audit company a report by specialty and coder (most systems can generate this type of report) showing case number and procedure code only;
• ask the audit company to select the charts it will audit from this report; and
• pull and copy the charts to be audited.

I prefer that hands touch an audit sample only once, so I recommend the administrator generate the report by specialty and coder, and a non-billing clerk (a receptionist, for example) pull the charts.

Budget for an audit
One item that administrators commonly forget to put in their budget is an annual chart audit, but an audit should be an important aspect of any surgery center budget. In order to have an effective audit, you must determine the audit type that best fits your surgery center, cover all specialties and coders, make sure your coder is not involved in the audit and choose the best audit company for your needs. Most importantly, don't be afraid to investigate costs and the end product of your audit, and don't overpay for your audit.