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Dynamic Chiropractic – May 20, 2012, Vol. 30, Issue 11
Dynamic Chiropractic
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Dynamic Chiropractic

Audits: Protect Against and Profit From Them

By Tom Necela, DC

Audits are a big concern these days for all health care providers, especially chiropractors. The "business" of auditing is booming, as it is consistently providing a great return on investment for the entities that are sponsoring the audits.

The latest figures estimate that auditing returns approximately $7 for every $1 spent. Recently, Medicare made big news when the recovery payments associated with auditing in 2011 alone were substantially larger than the first three years (2005-2008) of its RAC (Recovery Audit Contractor) program combined.

So, while the prospect of audits may not be going away anytime soon, I'd like to talk to you today about how to make some "lemonade" out of those auditing lemons. The process is simple: use the same strategies for defending yourself from an audit to uncover profits that may slip through the cracks. The method: the self-audit. Self-auditing is a simple, cheap (especially compared with the cost of a post-payment review) and effective way of discovering problems before they happen and capitalizing on missed opportunities when potential errors occur.

Making Lemonade Out of Audit Lemons

audits - Copyright – Stock Photo / Register Mark The first step to productive self-auditing is to analyze your basic stats or practice-management reports. Most chiropractic practices track parameters such as the number of new patients, patient visits, exams, report of findings and such within their practice-management system or billing software.

One of the most dangerous things to be audited for is billing for services that were not rendered. While we certainly do not ever want to be scrutinized for that, we don't want to perform services and unintentionally give them away, either. Analyzing your stats can help you do both.

For example: If you saw 25 new patients last month, that should result in 25 new examinations performed and 25 E/M codes billed. If you looked at your stats and saw that you billed five patients at the 99201 level, 10 at the 99202 level and 10 at the 99203 level, then you can happily conclude that you neither (a) billed for services that were not rendered; nor (b) failed to bill for services that were rendered.

In my experience consulting clients, this exercise alone will probably generate anywhere from 5-25 percent worth of errors in billing. One of my clients was shocked to find that all of his examinations were mistakenly being billed out at the 99201 level, which cost him nearly $50,000 in one year. It's bad enough to be audited and told you overbilled; he felt it was worse that he had underbilled all of those services.

Preventative Statistical Analysis

Perform this statistical analysis on your E/M codes first, since they are easiest to track and you probably have other statistics to match them up to. Not only will this help you find services that fall through the cracks, but this type of self-auditing will also help you uncover some procedural problems.

For example, if you see 25 new patients in one month, how many re-examinations should you have? For most practices, a healthy answer would be at least 25 re-exams. If you analyze your stats and find that you only have 12 re-exam codes billed in that month, then you have one of three potential problems: (1) You are doing the exams and not billing for them. (2) You are failing to do the re-exam as consistently as you think you are. (3) Patients are dropping out of care before they even get to the re-exam.

No matter how you slice it, none of those scenarios is good. Yet all would be discovered by a self-audit. Apply this same level of analysis to all of your procedures. I guarantee you will either find some money that has slipped through the cracks for services you already performed, or you will find that you are not quite as methodical and consistent as you think you are.

The Documentation Self-Audit

Self-auditing can also be applied to your daily notes to help you ensure that you are properly documenting your services and not mistakenly billing for services. For chiropractors, one of the easiest areas to spot and one of the biggest potential areas of trouble is your adjustment levels. Put simply, if you bill a 98941, you better be able to go to your notes and find at least three areas of the spine that were documented. Similarly, if you billed for an ancillary service such as traction or ultrasound, it should appear in the notes.

Don't make the job of an auditor too easy. Ensure that you are consistently documenting everything you bill for. While you should do this regularly when the note is produced, the self-audit process should also be applied randomly before the claims go out in order to prevent future damage. In other words, have a staff member check your notes on a random number of claims to ensure you documented the level of your chiropractic services and any other procedures properly.

They don't have to go through your notes with a fine-toothed comb, but a quick glance to make sure these "big items" are in place would be well-worth the time spent. And sure, it's likely that they might also find things you documented and failed to bill for – again, preventing lost income.

Practice What We Preach

At this time in the history of our profession, audits are a major source of worry and potential threat to many chiropractors. However, if we practice what we preach and take some "preventative maintenance" with respect to what we do, we can turn this around to be a force for our own good.

Take auditing seriously and preventatively. Most chiropractors who have been on the down side of an audit wish they had taken steps like these before they were under the microscope. Had they done so, I am sure the outcome of their audits would have been much more favorable. Use the self-audit strategy today to help protect and profit from the good work that you do.


If you'd like a free "Self-Audit Template" you can use to self-audit your own billing, coding and documentation, e-mail the author at , noting that you read this article in Dynamic Chiropractic.


Dr. Tom Necela maintains a private practice in Washington state. He is also the founder of The Strategic Chiropractor, a consulting firm for chiropractors. Dr. Necela can be contacted with questions or comments via his Web site, www.strategicdc.com.

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