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  • Writer's pictureMuhammad Sair Khan


Third-Party Payer Audits

As the value-based care model gains momentum in U.S. healthcare, payer audits by third-party vendors are becoming more common. Insurance providers state that audits are conducted to improve the quality of service that the patient receives. This is how it works: the third-party analytics company collects medical notes with the corresponding diagnosis code. Then, they measure the progress of the patient and can report factual, outcome-based data about the quality of treatment the physician is providing. You can find performance reports for participating physicians, facilities and healthcare plans on the NCQA website.

Understanding the Audit

Medical record and coding audits are conducted by third-party companies who report the results to a government-mandated agency such as Health and Human Services (HHS). The purpose of the record review is to confirm that the medical notes validate the members' health status and that you bill accurate diagnosis codes and levels of specificity.

Because billing and coding are complex and payers are continually updating codes, it is crucial to perform internal coding and charting audits to ensure that both meet minimum requirements. Consistent, internal regulation will help keep your practice/facility in compliance and prepared for payer and government-mandated audits

What Audits Mean for Providers

Providers who receive a record and diagnosis audit are typically chosen directly by the payer or have been highlighted by an analytic software that identifies billing/coding practices that differ from other physicians of the same specialty. Receiving a record request does not mean that you are under investigation, and if all the documentation you submit meets the criteria for accurate diagnosis and coding, it will place you on a recognized provider list hosted by the NCQA.

As the US healthcare industry shifts to a value-based model, payers will begin reimbursing providers according to health outcomes and the quality of care they provide. According to UnitedHealth Group, the nation’s largest health insurance company, they are paying nearly 60% reimbursements ($64 billion) to value-based care organizations which are rapidly replacing fee-for-service based practices.

Performance measurement is quickly becoming the norm in U.S. health care. As a medical practitioner, it will be critical to comply with changes in regulation and to partner with associates who share the same values. For more information on this topic and how to prepare your medical practice for a third-party payer audit, contact our Datapro consulting team.


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