Ask a practice manager when they last audited their charge capture process, and you will get one of three answers. “Last year.” “I’m not sure.” Or my personal favorite: “We never had any problems.”
That last answer always gets my attention, because nobody can know that without looking.
A charge capture audit does not need to eat a week of everyone’s time. Done the right way, a focused review of the right encounters can turn up billing problems that were quietly costing the practice money for months. For a small practice with organized records, that review can take a few hours. A larger practice, or one with records spread across systems, should plan for more.
Ray, who ran an eight person billing company in Asheville, called me on a Sunday afternoon. A commercial payer was auditing one of his clients and wanted two years of E/M documentation, and he did not know where half of it was. Part of it sat in the clinic’s EHR, part in scanned PDFs, and the rest in emails between his coders and the doctors. I drove up that Wednesday and spent the day with Ray and his lead coder, Bethany. We gathered the 180 sampled encounters and built a binder with the note, the coded claim, and a line on why each code was chosen. Fourteen were coded a level too high and nine a level too low. Ray wanted to keep the fourteen quiet, and I talked him out of it. They disclosed both, and the payer closed the audit with about $6,200 in repayment against the six figure amount Ray had feared. After that, Bethany drew ten E/M encounters per provider every month and checked them against the notes. That monthly habit is the kind of audit that can make a real difference in your overall profitability.
When I bring up a scheduled audit with a small practice, the answer I hear most is “We’re too busy for that.” What they are picturing is a giant chart review, a consultant billing by the hour, and a report nobody reads. That is not what I mean.
Why practices skip the audit
Nobody gets excited when somebody brings up an audit. The physician sees lost patient time. The office manager sees another project. The billing team sees more work stacked on top of an already full schedule.
So the audit gets pushed to next month. Then next quarter. Before long, nobody remembers the last time one was done.
Then there is the question nobody wants to answer: whose job is this? Billing thinks compliance handles it. Compliance thinks the practice manager handles it. The physicians assume somebody is checking. Everybody assumes the responsibility belongs to somebody else, and that is how a practice goes two years without anyone confirming that the work being performed is getting billed.
Step 1: Define the scope
Do not start by pulling a year of records. That is how a reasonable audit turns into a project nobody finishes.
Start with last month. The documentation is close at hand, the providers can still remember unusual encounters, and one month gives you plenty to start spotting patterns. Pick one or two providers to begin.
Then pick the codes you want to focus on. I would look at two groups. First, the 10 CPT codes your practice bills most frequently. Second, the 10 that bring in the most money, based on total payments received over the past year rather than billed charges, since billed charges can make a code look bigger than it is.
Why both? Missing a small charge once is annoying. Missing that same charge 200 times is expensive. And missing one high dollar procedure can hurt as much as either. The two lists will overlap. That is fine. You are looking for patterns, not auditing every code in your fee schedule.
Keep one distinction in mind. The code list tells you what to look for. It is not your sample. Your sample is the encounters, and it has to start from the schedule and the documentation, not from the charge file. A service that never became a charge will not show up in a charge report, no matter how well you pick the codes. Start with every completed encounter for your chosen providers and month, and you will catch the visits and procedures that never made it to billing.
Step 2: Pull the data
This is usually where the first headache starts.
You need four things for the same month and the same providers: the appointment schedule, the encounter documentation, the charge detail, and the claims that went out.
It sounds simple. But if your practice uses separate systems for scheduling, clinical documentation, and billing, you may spend more time getting the reports to agree than reviewing the encounters themselves. Make sure every report covers the same date range and the same providers before you start comparing, or you will chase gaps that are not there.
Step 3: Trace and compare
Here is the kind of thing you are looking for.
A physician documents an office visit and an injection. You open the charge detail and find the office visit code but nothing for the injection. That is a missed charge worth investigating.
Or the documentation shows two units of a medication, and the claim only includes one. Another potential problem.
Check modifiers too. When a procedure happens on the same day as an office visit, modifier 25 belongs on the E/M only when the documentation supports a significant, separately identifiable service beyond the usual work of the procedure. If the note supports it and the modifier is missing, the visit may be bundled away. If the modifier is there and the note does not support it, you found a compliance problem.
You are not looking for anything unusual. You are comparing what happened in the exam room to what the practice billed. Record both kinds of mismatch: documentation that supports more than was billed, and billing that claims more than the documentation supports.
Step 4: Categorize the gaps
This is where I think practices make their biggest mistake. They find 40 missing charges, fix the 40 claims, congratulate themselves, and move on. Three months later, the same problem is back, because nobody asked what caused those charges to go missing in the first place.
Sort what you found by provider, by service line, and by root cause. If 30 of those errors happened because the EHR template does not prompt for a procedure code, you are not looking at 30 separate problems. You are looking at one problem that keeps repeating.
Step 5: Fix and repeat
Fixing a missed charge is good. Making sure it does not happen again matters more.
If the problem is a bad template, fix the template. If the problem is documentation, work with the provider. If charges are getting lost between the clinical team and billing, figure out where the handoff is breaking down.
For the charges you found, the right path depends on the situation. A service that was never billed usually needs an initial claim. A claim that went out with the wrong code or units may need a corrected claim. Either way, the change has to be supported by the documentation, follow the payer’s rules, and fall within the timely filing limit.
Then repeat the audit every quarter. The second audit tells you whether the fixes held. Do not spend every quarter cleaning up the same mess.
Where HARRIS CareTracker fits
Anyone who has tried to reconcile clinical records against billing data from three different systems knows how much time that wastes. You pull a report from the EHR, export another from practice management, and then spend an hour figuring out why the patient counts do not match.
This is one of the reasons I like having scheduling, clinical documentation, and billing connected. With HARRIS CareTracker, those functions operate within the same platform, which gives the practice a more direct way to review encounters, charges, and claims. Rather than spending most of your time assembling information, you can concentrate on finding the gaps and correcting them.
Here is my challenge. Pick one provider. Pull one month of completed encounters. Choose a handful of your most common procedures and compare the documentation to what got billed.
You may find nothing. That would be good news.
But if you find the same missed charge turning up again and again, you uncovered a revenue problem that was sitting in your practice, possibly for years. And it took less time to find than your last staff meeting.
Follow for more on revenue cycle management, RCM reporting tools, and medical billing workflow that protects your net collection rate.
Frequently Asked Questions
What is a charge capture audit?
How frequently should a practice audit charge capture?
Should the audit start from the charge file or the documentation?
Who should perform a charge capture audit?
How do you rebill a missed charge?
About the Author
Thomas Koehl is a 30 year health technology veteran and currently Director of Marketing at Harris CareTracker. Prior leadership roles at QRS Healthcare Solutions focused on supporting revenue cycle management partners. Following Hurricane Katrina, he served as Director of a large New Orleans medical clinic that delivered care to over 32,000 patients. Koehl has testified before the U.S. House Committee on Energy and Commerce as an expert witness on disaster healthcare delivery. He also volunteers as COO of International Medical Alliance, a nonprofit providing free medical care to impoverished communities in developing countries. He writes about the business, strategy, and human side of health technology for the practitioners and leaders living it day to day.
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