How Do Billing Codes Affect Reimbursements And Auditing

by  Find-A-Code™
Jan 25th, 2023

Your job as a medical biller or coder has a direct impact on the jobs other people do. Your work impacts medical reimbursements, auditing, and even research. That's why it's so important that coders and billers get it right. A lot rides on the information behind medical billing codes.

This post will focus mainly on how coding affects reimbursements and auditing. The reimbursement portion you may already be familiar with to some degree. Auditing may be another matter. Unless you have reason to know about medical auditing, you may not think of it in terms of your daily routine.

Billing Codes and Reimbursements

As you know, the primary purpose for developing medical billing codes was to streamline the reimbursement process. Between private insurance carriers and Medicare/Medicaid, there are a tremendous number of players in the payment pipeline. Do not forget those patients who pay with cash, either.

Reimbursements are essentially payments to healthcare providers. One reimbursement may be a payment to your GP to cover your last physical. Another might be a payment to a hospital to cover your emergency room visit.

Insurance companies and federal agencies rely on medical billing codes and other data to determine how much to pay. Private insurance companies must meet standards set by the U.S. Department of Health and Human Services (HHS). However, most of the rules they have to follow are implemented at the state level.

As for Medicare and Medicaid, they are controlled by HHS. It is not unusual for the two programs to establish some sort of policy only to have private insurance companies follow their lead.

Medical Billing Codes and Audits

In a general sense, the point of any audit is to track quality, performance, accuracy, or some other metric. Some audits track multiple metrics. In terms of healthcare auditing, it can be utilized for any number of purposes. It is most often utilized to track coding and billing performance.

An audit reveals the accuracy of the coding and billing procedures. It measures the performance of the coding staff. An audit is designed to reveal both strong and weak points, particularly so that weak points can be addressed. In addition, an audit might also be used to:

●    track quality of care
●    measure adherence to organizational policies
●    educate individual providers on those policies
●    defend against malpractice claims or federal audits
●    maximize revenue-generating capabilities.

As a medical coder, you may be subject to annual performance reviews based on audit data. That really depends on the policies of your employer. But rest assured that you and your coworkers are being audited from time to time. It is part of being a medical coder.

The Best of the Best

Given how interrelated medical billing codes are with both reimbursements and audits, it stands to reason that healthcare providers and third-party coding and billing providers stress accuracy. Efficiency is a pretty big factor, too. When they hire coders and billers, they want the best of the best.

So what makes for a good medical coder? First and foremost is an attention to detail. There is a lot to learn about medical billing codes even before an individual can start working. A good coder must be able to figure out exactly what services or procedures were rendered and enter the appropriate information into the appropriate fields in the relevant database.

Coders are not expected to memorize thousands of medical billing codes. Instead, they utilize websites like ours to call up codes as needed. So to be successful, a coder must also be proficient in computer use. Otherwise, reimbursements and audits can run off the rails.