Medical Billing Audit Checklist: 25 Things to Review This Quarter

Most revenue cycle problems don't announce themselves. They quietly accumulate — a rising denial rate here, a growing AR there, a coding pattern that's slowly drifting from compliant. A quarterly billing audit finds these issues while they're still fixable.

Here are 25 things every practice should review every 90 days — organized by category so you can work through them systematically.

Section 1: Claim Submission Quality (5 Items)

1. Clean claim rate: What percentage of claims are accepted on first submission? Anything below 95% needs immediate root-cause analysis.
2. Claim submission lag: How many days elapse between date of service and date of first claim submission? Should be under 2 business days.
3. Top rejection reason codes: Pull a report of your top 5 rejection codes from clearinghouse reports. Rejections (before payer adjudication) are different from denials and usually indicate data entry or eligibility issues.
4. Eligibility verification rate: What percentage of scheduled patients had eligibility verified before the visit? Target: 100%.
5. Modifier usage accuracy: Sample 20 claims requiring modifiers and verify each modifier is applied correctly. Random modifier audits catch training gaps before they compound.

Section 2: Denial Analysis (5 Items)

6. Overall denial rate: Calculate denial rate by dividing denied claims by total claims. Industry benchmark: under 8%. High-performing practices: under 4%.
7. Top 5 denial reason codes: Categorize all denials by CARC (Claim Adjustment Reason Code). The top 5 codes typically account for 70%+ of all denials — fix these first.
8. Denial rate by payer: Some payers have systematically higher denial rates. Identify outlier payers and investigate whether the issue is with your submissions or payer behavior.
9. Appeal rate: What percentage of denied claims are being appealed? Should be 100%. If staff are writing off claims without appealing, identify and retrain.
10. Denial overturn rate: Of appealed claims, what percentage are reversed? Target: 80%+. Low overturn rates may indicate appeal letter quality issues.

Section 3: Accounts Receivable Health (5 Items)

11. Days in AR: Calculate using the standard formula: (Total AR / Average Daily Charges). Target: under 35 days for physician practices.
12. AR aging: % over 90 days: Calculate the percentage of total AR that is 90+ days old. Target: under 15%. Anything over 25% requires immediate intervention.
13. AR aging: % over 120 days: Claims over 120 days are at significant risk. Review these individually — are there timely filing limits approaching?
14. Unworked AR by bucket: Are there AR buckets that aren't being worked? Look for claims in the 45–90 day range that have no follow-up activity logged.
15. Write-off rate: What percentage of billed charges are being written off as "bad debt" vs. contractual adjustments? Unusual bad debt write-offs may indicate revenue that should have been collected.

Section 4: Coding Compliance (5 Items)

16. E&M level distribution: Compare your E&M level distribution (99202 through 99215) to specialty benchmarks. A distribution heavily skewed to low-level codes may indicate undercoding. All one level may indicate upcoding.
17. Sample coding accuracy: Pull 10 random encounters and re-code them independently. Compare to what was billed. Variances identify specific coding training needs.
18. Diagnosis code specificity: Review a sample of claims for unspecified codes. Are specific codes available that weren't used? This is both a compliance issue and a documentation opportunity.
19. Bundling issues: Review claims with multiple procedure codes for NCCI edit compliance. Are modifiers being applied appropriately to override bundling edits?
20. HCC (Hierarchical Condition Category) capture: For Medicare Advantage patients, are all relevant HCC-qualifying diagnoses being captured and coded? Missed HCC codes cost money on both sides — your practice and the MA plan.

Section 5: Charge Capture and Revenue Integrity (5 Items)

21. Charge capture completeness: Compare your appointment log to your charge entry log for the same period. Are there encounters without corresponding charges? Common miss points: ancillary services, in-office procedures, add-on codes.
22. Underpayment detection: Compare ERA payments to your contracted fee schedules for major payers. Are you being paid what you're contracted for? Systematic underpayments of even $5–$15 per claim add up to significant annual revenue leakage.
23. Credentialing status: Are all providers properly enrolled with all active payers? Claims submitted under unenrolled providers are denied — and often can't be appealed retroactively.
24. Patient collection performance: What percentage of patient responsibility balances are collected? At what stage (point-of-service vs. post-service billing)? Improving point-of-service collection is one of the highest-ROI practice improvements available.
25. Timely filing compliance: Are there claims approaching timely filing limits? Build a 90-day warning into your AR work queue. A claim outside the timely filing window is unrecoverable.

Using This Checklist

Work through this checklist once per quarter. Many practices do a deeper annual audit (all 25 items) and lighter monthly reviews (5–10 items focused on the areas with the highest current risk).

The most important thing is to document your findings and create action items for every finding. An audit that produces a list of problems without action plans is just an expensive list.