Audit Process and Methodology
Audit Process and Methodology tests the lifecycle of a defensible audit: objective, scope, criteria, data request, sampling, testing, workpapers, findings, reporting, and corrective-action follow-up. The exam favors evidence over opinion.
Core rules
- Start with a written audit plan and audit program. Define the population, period, criteria, test attributes, sample method, and escalation path before testing.
- Criteria must be authoritative and current: coding guidelines, payer policy, contract terms, statutes, and internally approved policies. Undocumented “usual practice” is not criteria.
- Test at the claim/record level with a standardized tool. Record pass/fail for each attribute and preserve source documents, queries, responses, and calculations in workpapers.
- Distinguish coding errors, documentation gaps, medical-necessity failures, and payment errors. One record can contain more than one finding.
- Validate exceptions with the provider or coder through a documented query; do not change the record. Root-cause the pattern before writing recommendations.
Worked example
A practice audits 30 randomly selected claims from a 300-claim population and finds 6 claims with an unsupported modifier 25, an error rate of 20%. The auditor should not automatically project 20% to all 300 claims unless the sample was designed for statistical extrapolation and the plan permits it. Instead, report the sample finding, quantify the reviewed dollar impact, investigate whether a template or education gap caused the pattern, and recommend targeted re-audit.
Traps
- Selecting a convenience sample and then describing it as random.
- Auditing only paid claims and ignoring denials or underpayments.
- Mixing coding and medical-necessity findings in one undifferentiated error rate.
- Accepting verbal clarification without documenting who said what and when.
- Closing the audit without verifying corrective action.