#178 The 4-Step Audit That Exposes What Your Billing Team Is Missing

What if the biggest revenue leak in your practice isn’t a denial or a payer contract problem - it’s the person processing your payments?

In this episode, Dr. Heather Signorelli breaks down the four-step payment posting audit we run on every practice we onboard - and why practices doing $300K+ a month are routinely losing $8,000 to $25,000 of it to undetected posting errors.

You’ll learn:
• How to catch unapplied patient payments before they generate angry calls
• The ERA spot check that exposes systemic contractual adjustment errors
• How to find payer underpayments before your billing team writes them off
• The write-off audit that protects your revenue from unauthorized adjustments

This is the final episode in our four-part payment posting series. If you’ve been following along, you now have more visibility into your revenue cycle than most practice owners ever get.

📊 Free Payment Posting Audit Checklist:
https://eligibility.natrevmd.com/payment-posting-checklist

📅 Book a free 30-min call:
calendly.com/heather-natrevmd

Resources mentioned:

EP175 - What is Payment Posting?
EP176 - Insurance Side Mistakes
EP177 - Patient Payment Errors

Transcript

SPEAKER_00 0:05

All right, imagine getting$300,000 a month in net collections, but not realizing you're actually losing up to$25,000. Now, this isn't because of bad payers or denied claims, but actually because of issues that could have been caught if you were auditing your payment posting process. Welcome to Nat RevMD, a podcast where we share tips on optimizing medical billing and improving practice efficiency so you can have the business of your dreams. I'm your host, Dr. Heather Signorelli, founder of Nat RevMD. Let's get started. So we see it in practices that we take over constantly, practices that may have had clean claims, maybe they had some solid payer contracts, but the problems that were built up related to payment posting resulted in uncollected debt. And so we've spent several episodes going over all of the different types of payment posting and errors to watch out for. Today we're going to dig into the audit process that you can put in place into your practice. And so when we are digging into practices when we are onboarding, we are seeing some of the same culprits show up over and over again, really around payment posting errors. And so that's what we want to wrap up today. So if your practice is processing more than, you know, 1500, 2000, even 5,000 claims a month, you definitely want to make sure that you have a spot checking process in place to make sure that you just understand how things are being posted. We do this with our practices every single month. And obviously it's a spot check. You're not going to be able to touch every single claim, but we want to make sure that our teams are posting it correctly. And we want to make sure that your team is also doing this. And if they aren't doing this, we'll give that framework today. Or if you are realizing that your billing team is overwhelmed or not right for your practice, we'd love to take care of you. Um head on over to notrevmd.com and check us out. So we've spent the last couple episodes going over insurance payments, patient payments, the foundation of what payment posting is. And so this is that final episode where we're going to give those exact four-step audits that we run on our practices, both at onboarding as well as on a monthly basis. Obviously, no one is immune from these types of issues. And that's why audits are incredibly helpful and important. And we've run this across dozens of practices, large practices, medium-sized practices. And it's really important. And up to 50% of the practices that we have onboarded and took on, we found at least one category of posting errors that does erode margin and revenue. And in some cases, can build up to six and seven figures of AR that could have been handled differently. And these are easy things to put in place. We built a toolkit and a spreadsheet that we ourselves use. And it can be something that you can implement every single month. So here's what you need to understand, right? So obviously your AR report is not only a list of what people owe you, but it actually does imply how well your team is posting. And so if you're posting incorrectly, right? So if, for example, you are incorrectly posting a patient payment or incorrectly posting an insurance payment or incorrectly writing something off because of those posting errors, that can lead to, you know, your AR reports being wrong, your collection rate being wrong, days and AR being wrong. And obviously you can't fix what you're not measure. So let's walk through those four steps. All right. So before we get started on those, we do have a free payment posting audit checklist. And that is in a format that you guys can download. So most practices that run it find at least two categories of errors within that first review. And so you can uh head on over to eligibility.natrevmd.com backslash payment dash posting dash checklist. Long word. So it is linked down in the show notes. So it's free and it is an important framework that we think would help your team. All right. And if you would like to walk through that, we do have a free revenue audit for looking at metrics and things like this. Uh head on over to netrevmd.com. Uh top right hand corner is that free audit uh and see if your practice qualifies. All right, so the first audit area is the patient check-in, patient collection reconciliation. So obviously we know the workflow, right? So patients come in. Hopefully, you're collecting any balances that were due, any patient co-pays, coinsurance, all the things. So obviously, when that amount is collected, it goes unimplied, right? So it's sitting there waiting for your claim to adjudicate, waiting for that claim to be fully played. And then at the time of posting that insurance payment, you're then grabbing that patient payment and applying it to that data service. So, what to do here is to pull that daily deposit report from your front desk for three random days last month, compare the total cash collected, make sure that the specific patient accounts are in your billing system and those payments show on those patient payments. Obviously, if you have an integrated system, that's going to be automated. And then as soon as it's collected through the payment processor, it's hosted to the right account. If you have a manual process there, hopefully you don't. You're double-checking the accuracy there. But what you're looking for is once that claim adjudicates, you want to make sure that the payment is applied to the correct date of service and listed out as like the copay or the coinsurance, et cetera. And typically, you know, most offices, if they're collecting for multiple things, we'll just call it a patient payment. And that's nothing wrong with that necessarily, but it is if it is a copay, it is helpful to call that specifically out. So you want to make sure that money isn't sitting there unapplied. And then you also want to make sure that as you're running those unapplied reports, that you're looking for any patient refunds, refunding those patients quickly and typically within the same month, so that you can make sure that you don't have unused dollars there. The thing that gets tricky sometimes is if you had prior balances, that then you need to make sure that those are shown for a statement. So if a patient came in for a Monday visit and you collected information for that March 1st, you know, visit, so you collected money for that visit and that claim adjudicates, you want to make sure that that dollar is applied to that correct date of service. The tricky part sometimes is when those dollars are auto-posted to older dates of service, and then that can kind of mess up some of the statement clarity. It isn't necessarily wrong, right? Because the money you applied it to prior dates of service and those dates of service may have had a balance. But the the tricky part comes when you're trying to audit these accounts and make sure the statements look clean. So in an ideal world, you are looking up these patient collections collections, making sure they're accurate, making sure that they're being assigned to the correct date of service, making sure that unapplied patient amounts are applied to the claims when they're closed. And then last is making sure that those refunds then are getting sent back to the patients. So this is a great way for you to audit that whole process, is again picking, follow, follow, follow the patient, right? Pick a few patients who were seen last month or maybe the month prior, depending on you know your claim cycle. So you just want to make sure that that claims adjudicate, that's adjudicated, that's what you're trying to do. So was money collected from the patient? Was money due to be collected? But maybe it was never collected from the patient. Maybe they missed collecting a copay. Then was the payment applied to the right date of service? Do you have a refund due? Again, all of that can be audited to make sure that that process uh looks good. And again, you could even follow the trail even further and go look at the patient statements and make sure those looked good as well. So, again, similar to like a joint commission or uh other regulatory process that we do in the hospital, right? You're following the patient, you can do the same thing with your audit process. For our team, we do audits based on we have an audit schedule every single week of the things that we audit for our own internal teams so that we can make sure that things are done appropriately. Obviously, why this matters, this really ensures that your front desk and your billing team are actually taking or, you know, communicating with each other and making sure that everything runs smoothly. Unapplied cash is obviously going to be invisible in your AR report. Um, and that unapplied could be issues with how it's um then applied to those claims and how that ties together with the insurance payments, or it could be, again, those refunds. And so, really, really important to have this all cleaned up because you can get angry phone calls from patients who paid a copay at the desk and received a statement for the same charge. And maybe that copay was applied to an older date of service. And so maybe it makes sense. It just makes explaining all of that really difficult. Another important thing is if they had had a balance for older dates of service, why didn't the front desk collect that? So that's another part of this audit. All right, number two, the ERA spot check. So pull 10 random ERAs from the last, you know, 60, 90 days, open your practice management system and compare the the line by lines against the actual ERA and what was posted. A lot of softwares have automatic posting, which is really, really helpful, but you just want to make sure those rules and everything is balancing correctly. So things to look for is did the poster enter the correct contractual adjustment? Did they route the denial codes correctly? Did the eligibility denial go back to the issue for us? It goes on to an issue tracker to get resolved by typically someone in the office, or is it just sitting there in the queue? Um, is there a zero balance claim that is left open and untouched or not followed up? So these are the fastest way to catch some of these systemic errors. We want to make sure that a poster isn't skipping contractual adjustments. We want to make sure that the ERAs coming in do balance against what was actually put onto the account, that we're making sure that we're getting all of the codes that come over, even if it's for like a federal sequestration, we want to make sure that that's all captured. And so we just want to make sure that this is really clean. That way you know your AR report isn't inflated and that if an insurance payment is posted, then you know, is there a secondary balance to a secondary insurance that's going out? Or alternatively, is there a patient responsibility? And then is that process working? And so, really, really important, it's a good check and tells you whether your AR team is working appropriately. And again, if your team isn't doing this already, highly, highly suggest that this be a process that you implement. It allows your billing team to have a quality that uh they need in order to run accounts. Again, you know, your metrics and everything can look really clean, but stuff can be messy on the back end. And so this is our double check process. Obviously, we want metrics up front looking really good, but to me, that's a lagging indicator. We're a leading indicator of these audits that help address what is to come months later. So, really important to have this process done. All right, so the under payment review. This is such a struggle for many, many, many teams. And it's it is still hard and manual for our team. So obviously, if you had all your payer rates and those were in some beautiful little spreadsheet and you could just upload them to your EMR, there are many EMR features that allow you to run, to run reports to double check that you're not getting underpaid by a payer. A lot of times rates are changing every year, sometimes depending on how your contracts are written. We don't have access to all the uh payer rates. And so another mechanism, if you don't have your payers' rates loaded into your system, which most practices don't, most of our practices don't, is that you pull a report for the last 20 patients from your top CPT codes and audit what the allowables are from availability from one of the other places where you can get them or from the contracts you do have a hold of, and then compare that you're getting paid against your contracted fee schedule. So obviously what you're looking for here is are they paying against the contracted rate, right? Did you get short changed anywhere? Why? We recently went through this with one of our practices, found a couple claims that then we're gonna go appeal and see what's going on. Again, very uh you want this to be an exercise where you can capture um top CPTs, top payers, and make sure that you're not getting underpaid. In an ideal world, we have all of our fee schedules and all of those in a spreadsheet. It's just not realistic for most payers are not that forthcoming. So this is a very challenging area, but really important for you to at least audit this. Obviously, we know that this is a place where payers can short pay. Sometimes people think that's by design, sometimes it's a system error. Or if you have new rates that are getting uploaded into a contract, that's a good, that's a good time to go back and audit once those rates are in the system. So you can make sure, yes, that new rate is uploaded. We're doing that for another practice right now as well. So obviously, if your posting team accepts these underpayments, you of course are going to lose money. So um want to make sure that you audit this. It's not reasonable to look at every single one of these claims. It's just not possible. So an audit is a good way. Another thing before we move to the fourth is uh checking for zero dollar contractual adjustments. And so our team, when they see a zero dollar contractual adjustment, what that means is that your charges are set at or below the allowable rate. And so, in that circumstance, for most payers, that means that you need to increase your charges because you always want to see a contractual adjustment to make sure that you know you're charging more than the allowable. Because if you charge less than the allowable, they're only going to give you what you charge. But we recently learned of some payers in the Midwest that will actually not allow you to increase their charges unless it is approved by them because they're paying you a percent of charges. Important to make sure that you understand your contracts around this. Um, that was new for me. That was new for um some of our team members. We just haven't heard that before, but we read their contract and uh that was, of course, what it is. So just want to make sure you understand your contracts, understand you are looking for those zero dollar contractual adjustments. I don't think other than that one contract, I think the rest of our 30 plus practices, I've never seen that before. So looking for zero dollar uh adjustments allow you to understand if there are claims or rates that you need to increase so that you capture all of the allowed payment from the payer. All right, so the last one is the write-off audit. So this is where you can pull a report, look at the adjustments and the write-off codes that are used, and then sort them by the user who posted them. And obviously, we want to make sure that on non-or contractual adjustments, there that's fine. Like we don't necessarily worry about that unless somebody's using the code inappropriately. But then what other adjustment codes are there? Are there timely filing uh adjustment codes? Are there denial adjustment codes? You know, different practices have different ways to manage adjustment codes. In an ideal world, you're making an adjustment code specific to the reason why you have an adjustment that's non-contractual. For us, we put these into our issue trackers and we approve these with the practice. But you want to make sure that are your staff allowed to write off things without documented management approval? What are those things? Do you have those things written down? Is everybody on the same page for that? Um, and if there are timely filing, why is that? Or the are the claims getting sent out late, which, you know, obviously is the most painful type because everybody works and nobody gets paid, including the billing team. Or are you writing off of these things for timely filing because uh the AR team isn't working them? So really, really want to make sure why you're writing off timely filing denials. Obviously, if a coding denial or a denial keeps happening over and over again and for the same claim and the denial doesn't get resolved, and then you submit it again. If you do that past the timely filing limit, you may have an issue and may, even though you're continuing to still try and work the denial, you still hit a timely filing issue. And so it's good for you to just understand what those adjustments are, why, and um making sure that those are being done in accordance to the practice guidelines. Obviously, we all know why this matters, right? Critical revenue protection check on unauthorized write-offs and making sure that your billing teams are doing that appropriately. The struggle is if they are using contractual write-off codes to write off non-contractual adjustments, you're not going to have a really difficult time to identify that. And that's why where that ERA check comes in, because you're looking at the ERA, you're seeing the contractual adjustment. But then if you see uh a non-contractual adjustment on a claim, then you can clearly see that um that was done inappropriately, right? They're using a contractual adjustment code for non-contractual adjustments. And so that's where you're you're hitting kind of both of these, right? You're doing the ERA audit, but then you're also doing the write-off audit. And so that can help you uh check on all of these. We also audit things like AR follow-up, making sure that the AR is being touched enough. And again, this is our own internal audits that we do on our own internal team because it allows us all to be on the same page in terms of work quality. So, really, really important that you have this process down. If you have an in-house team and are struggling with the strategic oversights of some of these things, it's really important that you have that skill set on your team. Otherwise, the strategic direction of your billing operations is going to not be able to sustain growth of your practice. And so that's, I think why it's really, really important, whether you have an outsourced team, if they have somebody in that role, great. If they don't, that's a weakness. Same with your in-house team. If you have an in-house team and maybe some of the billers are great, but you don't have that strategic oversight, long term, you can struggle. And so, really important to kind of uh bring this all together. Obviously, every part of your billing workflow should be traceable, should be audible, and it should be something that you know what's going on. You know, with manual processes, there's always going to be something to fix. And the question is how fast do you identify it and fix it and retrain in order to make sure that they don't happen again? No one is perfect. And it's important to have these audit processes so that you don't get in a situation where issues build up over time and resulting in revenue loss over time. So, again, to recap, we want to make sure that you are doing an audit where we're looking at patient check-in, patient collection reconciliation, really looking at that front office process, but then also that back office applying of those payments to the right date of service, unapplied payments, refunds, et cetera. ERA spot checks, you're looking and making sure that those are posted appropriately and that they match the actual ERA. Again, looking at contractual adjustments, non-contractual adjustment codes, all of that. Looking at those underpayments, looking at those contracted rates and making sure that they're being paid per the allowable. And then last, writing off or write-off audits, making sure that those adjustments are authorized and uh being done correct. So this is really important. Again, we kind of have like a monthly schedule for our practices where we're doing a section of this every month. Um, and it just allows you to have a really good solid picture of your financial health. And this will be something that most practice owners probably aren't aware. If it is being done, you may not be aware it's being done. But if it's not being done, you want to make sure that someone can get this implemented. You're just gonna catch things before compounds. So obviously, if you don't run this audit, you are operating in the assumption that this complex, detail-oriented process is just perfect, right? And that's just not the reality. Download the free uh posting audit checklist and check this out with the link below. And again, would love for you to share uh this with a colleague or subscribe if you are listening to this online. Hopefully, you have a great rest of your day. Thanks so much.