Keeping tabs on compliance with internal audits and monitoring

Wednesday, July 7, 2021

Regular monitoring and internal auditing are critical to ensure compliance throughout the revenue cycle and protect revenue integrity. Monitoring involves overseeing all processes and functions that contribute to generating revenue for the organization. Internal audits are typically more focused and involve determining whether the organization’s standards and procedures are current and accurate, validating that previously identified compliance risks have been resolved, and identifying educational needs.

The Certification in Healthcare Revenue Integrity (CHRI) holder will typically be involved in monitoring and auditing activities focused on documentation, coding, medical records, charge description master (CDM)/charging, and billing.

Documentation and chart audits

The medical record is a legal document and must meet the accepted standards of documentation as defined by CMS’ Conditions of Participation and Conditions for Coverage, federal regulation, state laws, and accrediting agencies such as The Joint Commission.

An effective clinical documentation process will help avoid improper coding denials by improving documentation and promoting clinical staff engagement. Clinical documentation integrity programs ensure that documentation in the medical record provides an accurate picture of the patient’s diagnoses, the care provided for those conditions, and the quality of care provided.

Overall, documentation should tell the complete, accurate story of the patient’s health and the services and items provided to the patient during an encounter. The CHRI holder should be familiar with the documentation standards that apply to the service lines, facility types, and practitioners in their organization and must be able to locate specific references and guidance when questions arise. In general, when reviewing documentation, the CHRI holder should ask whether documentation satisfies the following questions:

  • Is the reason for the patient encounter documented in the patient’s medical record?
  • Are all services that were provided documented in the patient’s medical record?
  • Does the patient’s medical record clearly explain and support the services, procedures, and supplies that were provided?
  • Is the assessment of the patient’s condition clearly documented in the medical record?
  • Does the patient’s medical record describe the patient’s progress and the results of treatment?
  • Does the patient’s medical record include the physician’s plan for care?
  • Does the patient’s medical record provide a reasonable medical rationale for the setting and services that are to be billed?
  • Does the patient’s medical record support the care given so that when another healthcare professional must assume care or perform a medical review, that professional will be able to do so?


Ideally, copying and pasting should be avoided in documentation. Overuse of copying and pasting is a serious problem because it increases the likelihood that errors will be introduced by copying old and possibly irrelevant or incorrect information. It may also make it difficult to trace the original source of the copied information and to differentiate between the copied information and new information. Documentation in the electronic medical record must show patients’ changes in condition and needs for each encounter.

Chart audits should be conducted on a regular basis to ensure that documentation is complete and accurate and that codes and charges are appropriately assigned. Chart audits should include the following actions:

  • Audit medical records against charges and claims to make corrections and improvements in charge capture, coding accuracy, billing, medical necessity, or documentation
  • Audit patient charts and medical records to evaluate adequacy of clinical documentation, compliance, reasons for treatments, billed services/items, coding, payments, operations, or completeness of bill
  • Review medical records for accuracy and billing compliance
  • Review hospital (or other healthcare facility) department medical record documentation for improvement opportunities as part of a scheduled periodic review process


Revenue integrity and other revenue cycle staff will work with compliance staff to monitor compliance with documentation standards and to conduct internal audits of documentation. The CHRI holder must consider ensuring documentation compliance to be a high priority, as documentation is the basis for coding and a foundation of the entire revenue cycle. If an inaccurate claim is submitted due to poor documentation, then the organization is at risk of False Claims Act violations and other compliance risks that can carry heavy financial penalties. It is the CHRI holder’s duty to ensure that the organization receives no more and no less than the appropriate reimbursement.


Coding audits can be prospective or retrospective. Prospective audits identify errors before claims are submitted. Errors identified during prospective audits should be corrected before the claim is submitted. Retrospective audits occur after claim submission and reimbursement. Incorrect claims identified during a retrospective coding audit should be reviewed for possible rebill or refund based on the payer’s repayment or corrected claim guidelines. In both cases, audit findings should be presented to the coding and compliance departments and can be used as the basis of departmentwide education or one-on-one training.

Coding audits may also include validation of the following:

  • Ambulatory Payment Classification (APC) assignment
  • Current Procedural Terminology (CPT®) code and relevant modifier assignment
  • Discharge disposition
  • Diagnosis-related group (DRG) assignment
  • Evaluation and management (E/M) leveling
  • International Classification of Diseases, Tenth Revision, Clinical Modification (ICD-10-CM) and/or ICD-10-Procedure Coding System (ICD-10-PCS) code assignment and sequencing
  • Present-on-admission assignment
  • Reason for visit
  • Specificity of code assignment


The CDM and charging

The CHRI holder should ensure that revenue integrity staff monitor and audit all charges generated through the CDM. Revenue integrity will typically collaborate with the compliance department on these activities to ensure that both departments are kept abreast of the most current government and commercial payer regulations and their interpretation and application.

If errors or other issues are reported, a corrective action plan should be developed. The specific process or processes affected should be audited to ensure resolution and optimize charge entry, billing, reimbursement, and data collection. These audits should determine whether individuals are properly carrying out their responsibilities and make recommendations for education or process improvement if necessary.


The CHRI holder should ensure revenue integrity staff work with compliance on monitoring and auditing the billing process from registration, prebilling review, and charge capture to accounts receivable. These activities should focus on ensuring accurate patient data, including payer/insurance plan information and patient status, are entered to support correct coding and billing. As a standard precaution, monitoring processes should be implemented for any new billing requirements.

The following areas are of concern and should be the focus of regular monitoring and targeted audits:

  • Medical record numbers. Incorrect medical record numbers pose significant risks to data integrity, patient safety and quality of care, and revenue integrity. A duplicate medical record number—which occurs when a single patient is erroneously assigned two medical record numbers—may cause services, documentation, and charges to be incorrectly split between multiple records. This may cause issues with billing for bundled or related services, for example, and poses significant risks to data and revenue integrity as well as to patient safety and quality of care.
  • Payer/insurance plan information. Incorrect payer/insurance plan information can cause mistakes in deductibles and copayments as well as claim denials.
  • Medical necessity. If a service or item does not meet medical necessity requirements, the payer may deny the claim in whole or in part. In addition, the organization is not in compliance with CMS regulations if it fails to notify a patient that a service is not considered medically necessary and will not be covered. Revenue integrity staff will work with compliance on monitoring and auditing claims denied due to lack of medical necessity and ensuring that notifications of noncoverage, such as the Advance Beneficiary Notice of Noncoverage, are appropriately provided.
  • Unbundling. Unbundling is the practice of submitting separate claims for services that could be on a single bill. It may lead to charges of fraudulent billing. Unbundling may occur due to unintentional charge entry errors or a faulty CDM. Revenue integrity staff should conduct spot checks of claims submitted for the same patient within one to two days of each other to ensure that bundled services and items are not separately billed.
  • Upcoding. Upcoding involves adding codes or coding services at a higher level than actually provided to achieve a higher reimbursement. For example, coding additional complications or comorbidities (CC) or major CCs (MCC) to shift the designation of patient care into a higher-weighted DRG is considered upcoding. Pre-bill internal coding audits should be conducted to detect potential upcoding concerns, particularly on inpatient claims where there is only one CC or MCC that is driving the claims to a higher-weighted Medicare Severity DRG.
  • Beneficiary inducement. The Anti-Kickback Statute and the Civil Monetary Penalty Law prohibit organizations from offering remuneration to Medicare or Medicaid beneficiaries to influence beneficiaries’ choice of providers, practitioners, or suppliers. One way an organization might inadvertently violate these regulations is by not collecting a copayment when a copayment is required. Such a practice may raise accusations that the organization is doing so to induce patients to choose to receive more services. Revenue integrity staff should monitor for potential concerns by conducting internal audits of accounts receivable to ensure that deductibles and copayments are collected and posted correctly based on the explanation of benefits.


The CHRI holder and revenue integrity staff will need to collaborate with the compliance department to monitor and audit processes across the revenue cycle and to develop policies and procedures, provide education to staff, and resolve compliance issues.

When a compliance issue is discovered, the CHRI holder is obligated to report it. The exact reporting method and individuals to whom the issue must be reported should be specified in the organization’s compliance program. The CHRI holder should know how to locate information on the organization’s compliance program and reporting method and should be prepared to supply that information to other staff members when necessary.

The CHRI holder may be involved in conducting interviews with staff, either to collect information on potentially unreported compliance issues or to gather more information on possible compliance issues that have been identified.

Risk reduction

If an audit identifies risk areas within the revenue cycle, the next step is to develop a method for addressing them. Generally, this will be a multidisciplinary function that includes representatives of the affected department or departments working with the compliance committee. The CHRI holder should be prepared to provide input on specific risk reduction actions and to actively participate in a leading or supporting role.

Editor’s note

This article was excerpted from the CHRI Exam Study Guide.