Comprehensive Guide to Medical Billing Audit

Healthcare is an ever-changing industry. With evolving regulatory requirements and regulations, it can be hard to deal with these changes without a system in place. This is why audits are important in medical billing. Medical billing audits help providers stay up-to-date with regulations and requirements and deliver quality care effectively while improving the practice’s financial health. In this article, we will cover medical billing audit in depth, including their importance, the process, and the benefits of medical billing audits in healthcare. 

What is Medical Billing Audit? 

A medical billing audit is a process that examines the health records of practices and reviews billing data submitted to payers to make sure the practice spots, supervises, and adjusts improper billing practices. Medical billing audits help evaluate the effectiveness and reliability of clinical documentation and the billing process. It is vital for a practice to perform regular billing audits in accordance with medical billing rules to maintain efficiency. Providers or the government usually ask for lab results, medical records, and financial records like charge sheets, payment schedules, etc. 

Medical Billing Audit Process 

The medical billing audit process commonly entails the following steps: 

Determining the Scope 

The first step in a medical billing audit is to determine the scope of the audit and the resources needed to complete it efficiently. You will need an estimate of the number of clinical staff, providers, payers, coders, and billers.  


Next, you must assess your reports for risk areas or trends. It will also involve checking the frequency of services provided and reviewing the staff’s use of CPT codes. 

Adapt and Improve 

After the last step, audit results are used as strategic information to improve revenue cycle management and care outcomes. This entails establishing realistic improvement goals, dealing with any discovered internal problems, and applying pressure on payers to strengthen areas where they have been proven deficient. 


Make audits a regular process. If you handle medical billing in-house, it is best to carry out an internal medical billing audit at least once a year. Large practices may carry them out as frequently as once every three months. 

Types of Medical Audits 

Internal Audits 

Since medical audits are necessary, some practices keep an in-house team for this process. This team can audit random records whenever they see fit. It is best to have a plan from the very beginning. Every completed audit must include scheduling an audit, creating audit templates, and creating standard documentation. Your practice will save time and extra work in the future if the internal audit team is effective enough to prepare all of these and approach the audit procedure with a plan. 

External Audits 

Another choice is outsourcing medical billing audits to billing companies like CareCloud. Their auditing process is uniform and suitable for all types of practices. They can evaluate your billing procedure compared to other practices in the sector and identify any operational flaws.    

Benefits of Medical Billing Audits 

Improved Patient Care 

Medical billing audits help improve patient care by allowing providers to focus on delivering quality care to patients. This is because auditing helps track procedures and services and educates providers to provide the highest quality care.   

Accurate Coding 

One of the biggest benefits of billing audit is that they provide you with a chance to find and fix issues before the government or insurance payers do. Billing audit can be relied upon to find errors, offer guidance on how to fix problems, instill confidence in the coding team, and guarantee the use of current procedure codes. 

Improved Payer Relations 

Medical billing audit help improve payer relations. Payers prefer claims that are accurately and carefully submitted.  Auditing helps ensure all claims are submitted accurately, thus improving payer relations. 


Medical billing audit help protect the practice against incorrect billing activity and claims. Billing audits make it simple for practices to ensure ICD-10-CM compliance and reduce or eliminate improper payments. Auditing helps find problems with reimbursement and shows how to improve. As a result, areas for more reimbursement may be revealed, which would improve revenue. The practice also benefits from timely file processing, decreased inappropriate payments, and improved claim payment. 


It is a no-brainer that regular auditing is necessary for all healthcare practices to improve revenue cycle management and avoid claim denials. If you are choosing the option of external auditing, make sure to choose the right provider for your services. CareCloud’s robust medical billing software comes with many different features like claim submission, denial management, a rules engine, auditing, and more, which helps providers keep their auditing process regular and efficient and their revenue cycle profitable.

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