How Often Should a Medical Practice Conduct an RCM Audit? Cost, Requirements, and Benefits
Revenue Cycle Management (RCM) audits play a critical role in the financial health of medical practices. These audits ensure that healthcare entities and their financial functions are aligned with governmental requirements, and they help benchmark against peers for best practices. The frequency of audits, cost, and requirements can vary based on the size, complexity, and scope of the medical practice.
How Often Should an RCM Audit Be Conducted?
A medical practice should ideally conduct an RCM audit at least once a quarter, or even monthly, depending on the size, scope, and complexity of the practice. Our focus at QueueLogix is moving towards a more real-time framework, as opposed to yearly or quarterly audits. As technology evolves and existing integrations between EMR and billing systems improve, real-time reviews and audits of patient encounters for accuracy are becoming increasingly important.
Benefits of Real-time Audit Framework:
Accuracy: Ensures that billing and coding processes are accurate and timely. Compliance: Meets governmental requirements and regulatory standards. Benchmarking: Identifies areas for improvement and best practices within the industry. Patient Experience: Improves the overall patient experience and satisfaction. Fraud Prevention: Helps prevent financial losses due to billing errors.Types of RCM Audits
The term audit can have different meanings depending on where in the organization you are having the conversation. Compliance professionals and Revenue Cycle Directors may have distinct definitions.
General Purpose of RCM Audits:
Regulatory Alignment: Ensuring adherence to governmental requirements, such as Centers for Medicare and Medicaid Services (CMS), for determining appropriate medical codes. Benchmarking: Comparing the practice's coding and billing processes with those of similar groups in the area, state, or nation to identify best practices and areas for improvement. Process Improvement: Analyzing the overall revenue capture process for inefficiencies and poor workflow practices.Cost of RCM Audits
The cost of conducting an RCM audit can vary based on several factors:
Sample Size: Whether the audit is sampling 5% of 1,000,000 patient encounters or 0.5% of 10,000 patient encounters. Service Line Complexity: The complexity and nuances of the service line being reviewed. For example, a primary care physician audit may differ from a pediatric emergency medicine site audit. Output Requirements: Whether the organization seeks basic information on service and procedural variances or deeper insights like risk adjustment factors and critical care time tracking. Also, whether an expert is required to provide findings on-site.Organizations typically expect to spend about 5 to 10 times the unit cost of coding a single encounter to conduct a proper audit. For instance, if it costs $2.50 to code a patient encounter, an organization might expect to spend $10 to $50 to audit the full encounter.
Requirements for Conducting an RCM Audit
To perform an RCM audit, most companies, including QueueLogix, require the following inputs:
Patient Demographic and Sampling Information: A sample of patient encounters for the period of review, randomly selected. Clinical Documentation: All related clinical documents that pertain to the patient encounters. Billing and Coding Outcome Data: The way in which the patient encounters were coded and billed, so a meaningful comparison can be made.Example of RCM Audit Comparison
An example of a comparison done by QueueLogix for a client in the emergency medicine field is outlined below. QueueLogix reviewed a small sample of patient encounters and compared the levels of service captured from the client's process to what it might otherwise have been. This was a part of the overall audit review:
In this example, it was identified that there was a variance in the institution's Medical Decision-Making approach and how they categorized complexity compared to how the QueueLogix team approached it. This highlights the importance of thorough audits in identifying discrepancies and areas for improvement.
Summary: RCM audits should be a key tool in the arsenal of any healthcare system or medical practice. Regular, comprehensive, and well-planned audit protocols can ensure accurate billing, compliance, and insight into delivering top-tier care. By staying up-to-date with evolving technology and best practices, medical practices can significantly improve their financial health and patient satisfaction.