A medical chart audit is a formal, systematic review of patient records, which can be either physical paper files or electronic health records (EHRs). This process involves examining documentation, including clinical notes, diagnostic reports, and treatment plans, to verify accuracy and completeness. A medical auditor, who is not part of the clinical care team, performs this review to bring an objective perspective to documentation and billing practices. The audit serves as a mechanism for accountability, ensuring that care delivered is appropriately documented and meets established standards.
Why Audits Are Performed
Healthcare organizations conduct chart audits primarily to ensure payment integrity within their revenue cycle. Auditors verify that the Current Procedural Technology (CPT) and International Classification of Diseases (ICD-10) codes billed to payers accurately reflect the services documented and provided to the patient. This analysis helps prevent financial waste by identifying instances of overcoding, where a more expensive service is billed than performed, and undercoding, which results in lost revenue. Accurate coding protects the healthcare facility from allegations of fraud and abuse and the patient from potential overbilling.
A second major driver for audits is adherence to regulatory compliance. Facilities must satisfy mandates set by governmental bodies, such as the Centers for Medicare and Medicaid Services (CMS), and state-specific laws. Audits specifically assess compliance with privacy regulations, such as the Health Insurance Portability and Accountability Act (HIPAA), ensuring patient health information remains secure. Failure to meet these standards can result in significant legal and financial penalties, making proactive compliance verification necessary.
Beyond financial and legal concerns, these audits are a tool for quality improvement in clinical practice. The review assesses the completeness of documentation, checking for missing information like a required physician signature or incomplete consent forms. By identifying gaps in the record, organizations can pinpoint deficiencies in care delivery or communication that might compromise patient safety. The results are used to refine care protocols and enhance clinical practices.
The Steps of a Chart Audit
The process begins with selection, where the charts to be reviewed are identified based on the audit’s objective. Selection may involve a random sample of records for a broad assessment, or it may focus on high-volume services, specific diagnoses, or providers with a higher risk for error. The sample size is determined to provide a statistically valid representation of the organization’s documentation practices.
Once the charts are selected, the review phase involves comparing the clinical documentation against established criteria. The auditor uses a standardized checklist to confirm that all required elements, such as medical necessity for the service rendered, are supported by the notes. This involves verifying that the documented date of service, patient identity, and all orders are consistent and present throughout the record. Any discrepancies, such as inconsistent documentation between different sections of the chart, are flagged during this examination.
The next step is documenting findings and scoring, which quantifies the errors identified during the review. Auditors assign a score or categorize the severity of each discrepancy, such as incorrect code usage or missing information required to justify the service. These findings are then analyzed to identify systemic patterns, such as a provider frequently using an inappropriate modifier or a recurring issue with documenting a specific level of service. This pattern analysis highlights the areas needing the most attention.
The final phase is remediation and feedback, which transitions the audit from a review to an improvement plan. The audit results are communicated to the relevant providers or departments to highlight areas of non-compliance and documentation weakness. Corrective actions are then implemented, often involving targeted training sessions for staff on proper coding or documentation techniques. This feedback loop ensures that the findings lead directly to process changes.
Key Differences Between Internal and External Audits
Internal audits are initiated and conducted by the healthcare organization itself. The primary goal is proactive risk mitigation, allowing the facility to identify and correct documentation or coding errors before they are discovered by an outside entity. Because they are performed internally, these audits are often more frequent, cost-effective, and can be narrowly tailored to focus on specific departmental concerns.
External audits, conversely, are performed by independent, third-party entities. These auditors may represent commercial insurance payers or government contractors like the Recovery Audit Contractors (RAC) who work on behalf of CMS. An external review offers an unbiased assessment of the facility’s practices.
The implications of an external audit are more severe than those of an internal one. While an internal audit leads to process improvement, an external audit can result in financial consequences, such as demands for repayment of claims or the imposition of regulatory penalties. These outside entities focus their reviews on confirming medical necessity and detecting fraud, waste, and abuse, so many organizations utilize a combination of internal and external audits for ongoing vigilance and objective verification.