Claim Audit Information for Providers

Audit Types

Health plans and providers both turn to HMS for audits that help discover claims that aren’t coded or billed correctly, or where it seems other payment errors are likely.

The type of audit HMS conducts on any group of claims can vary and determined by the criteria set by the health plan.

The majority of claim audits HMS performs include:

Automated Edits and Analytics

Automated edits and analytics-based audits use proprietary data analysis queries and algorithms developed by HMS to compare the claim history and specific billing against the health plan’s rules for coding, utilization, billing and reimbursement.

The plan chooses from the library of edits maintained by HMS to apply to the claims under review.

No medical record is required to confirm validity. Instead, this type of audit relies on plan-approved data analysis and claim verification. However, any overpayments detected are manually verified by a coding or clinical professional before a repayment letter is issued. In the case of Medicare or Medicaid, claims are vetted before an offset file is submitted to the plan to allow reductions in future claims reimbursement until overpayments are recovered.

Hospital Bill Audit

A hospital bill audit evaluates provider claims reimbursed at a discount from the billed charges. The review ensures an itemized bill accurately reflects the services and procedures allowed by the health plan, were ordered by a physician and performed, and are accurately documented in the medical record.

This audit may also include a review for correct coding and for accurate and appropriate billing combinations based on CMS guidelines. Bill audits are conducted on site at the provider’s facility or performed remotely. 

Clinical Claim Reviews

Clinical claim reviews cover many instances of care, including:

  • Place of Service. Review of targeted inpatient claims to confirm that the services provided matches the documentation provided in the medical record.
  • Diagnosis-related Group (DRG) Validation. Targeted inpatient claims are reviewed to validate proper coding of diagnosis and procedure codes and any other elements affecting DRG reassignment, ensuring proper reimbursement.
  • Medical Drug. The medical record is reviewed to verify the billed units are correct based on medication administered and any applicable medication wastage.
  • Skilled Nursing Facility (SNF). SNF claims may be reviewed to validate coding accuracy and compliance with MDS assessment and documentation requirements. SNF claims may also be reviewed to ensure the level of care is appropriate and coverage criteria met in accordance with the Centers for Medicare & Medicaid (CMS) guidelines
  • Inpatient Rehabilitation Facility (IRF). Review of targeted IRF claims to verify that documentation requirements and coverage guidelines were met for IRF level of care
  • Readmission. Targeted readmissions pairs are reviewed to determine if the readmission was clinically related with a) a reasonable expectation that it could have been prevented with optimal quality of care during the initial hospitalization, or b) optimal discharge planning and post-discharge follow-up.

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