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Retrospective Audits Are on the Rise
In the past, most payer audits focused on prepayment reviews or prior authorization compliance. But not anymore.
Retrospective audits—where payers request documentation months or even years after payment—are rapidly increasing.
And they’re not just looking for errors—they’re looking for money to claw back.
Why the increase?
- Medicare Advantage plans are under pressure from CMS to reduce overpayments
- Commercial payers use AI to flag outliers in coding, cost, and utilization
- Payers see post-payment audits as low-effort, high-return tactics
The Hidden Cost of Being Unprepared
When practices are caught off-guard, retrospective audits can lead to:
- Large recoupments for services already rendered and paid
- Increased scrutiny across all claims from the same provider
- Billing holds or flagged provider NPI numbers
- Hours of staff time retrieving charts, responding to requests, and appealing findings
Even “clean claims” can become financial liabilities without supporting documentation.
The Solution: Preemptive Internal Audit Protocols
The best way to defend against retrospective audits is to find the errors before the payers do.
A preemptive internal audit program helps:
✅ Identify risky billing patterns
✅ Validate documentation before an outside request hits
✅ Demonstrate good-faith compliance efforts
✅ Educate providers and coders on improvement areas
How to Build an Audit-Prevention Workflow in 5 Steps
1. Target High-Risk Specialties and Service Lines
Focus first on:
- Cardiology
- Orthopedics
- Pain management
- Behavioral health
- Dermatology
- Radiology
- Any high-volume E/M or procedural practices
2. Prioritize High-Value, High-Denial CPT Codes
Pull data on:
- Top 10 reimbursed CPTs
- Common modifiers used (e.g., -25, -59, -22)
- Services with high frequency per patient
3. Perform Sample Audits Monthly or Quarterly
- Select 10–25 encounters per provider or service line
- Ensure samples include both new and established patients
- Include a range of payers (Medicare Advantage, commercial, Medicaid)
4. Use a Scoring System for Findings
Score charts based on:
- Documentation completeness
- Medical necessity
- Modifier justification
- Coding accuracy
- Signature/timing compliance
Label findings:
- Compliant
- Minor variance
- Major risk
- Non-billable
5. Track Trends and Create Action Plans
- Share findings with providers and coders
- Offer corrective training and coding refreshers
- Flag repeat issues for re-audit in 90 days
- Document remediation to show audit-readiness
What to Look for in Preemptive Reviews
✅ Are diagnoses well-supported and specific?
✅ Does documentation support the code level?
✅ Are time-based E/M claims documented correctly?
✅ Are modifiers (25, 59, XU) clinically justified?
✅ Do notes reflect “cut and paste” language?
Tip: Payers often audit patterns—not just individual claims.
Final Thought
You can’t stop a retrospective audit. But you can control how ready you are.
✅ Find gaps before payers do
✅ Prevent costly clawbacks
✅ Build defensible, compliant billing workflows
Audit-proofing isn’t a one-time project—it’s a strategic posture.