Practices are offered "free billing audits" regularly. Most of them are a sales call with a spreadsheet of your AR aging: a chart showing that 28 percent of your receivables are over 90 days, a comparison with an industry benchmark, and a proposal. The chart is probably accurate. It is also something your own practice management system could have printed in thirty seconds, and it says nothing about why the money is old or where the money that never became a claim went.
An audit that helps you tests whether the process works, with your data, at every step from the appointment to the deposit. That means somebody has to reconcile the schedule to the claims, read remittances against contracts, and talk to the people who do the work. It takes weeks, not a lunch meeting, and the report should be something your team can start working on the following Monday.
This article sets out the components we think a revenue cycle audit must include, what the findings report should look like, and the signs that tell you the audit you were offered is a proposal in disguise.
Key takeaways
- A real audit has seven components: workflow mapping, encounter-to-claim reconciliation, submission lag, rejection and denial analysis, remittance review, AR observations, and a separation of practice actions from billing-team actions.
- The encounter-to-claim reconciliation is the component most often missing, and it is where the largest findings usually sit. Without it, unbilled work is invisible.
- Underpayments cannot be found in an AR aging report. They require a remittance sample compared with contracted rates.
- The report should give you quantified findings, the underlying lists, an owner for each recommendation, and an honest statement of what the auditor could not see.
- An audit that bundles remediation, contract negotiation and a billing proposal into one price is usually selling the billing contract.
The seven components of a real audit
| Component | What is tested | What you should receive |
|---|---|---|
| Workflow mapping | How work actually moves, from charge entry to adjustment decisions, according to the people doing it | A process map with the steps that exist in policy but not in practice marked |
| Encounter-to-claim reconciliation | Arrived appointments vs. signed encounters vs. accepted claims for a defined window | The list of unbilled encounters by provider and date, with a dollar estimate |
| Submission lag and filing exposure | Days from date of service to submission, by provider and payer | The distribution, and the claims near or past filing limits |
| Rejection and denial analysis | Clearinghouse rejections and payer denials by reason, payer, provider and code | Preventable share estimated; unworked items listed |
| Remittance review | A sample of remittances compared with contracted rates | Underpaid lines, incorrect adjustments, unposted payments |
| AR observations | Aging by payer and balance type, credits, unapplied cash, unstatemented patient balances | Whether the problem is one slow payer or the practice's own follow-up |
| Practice-action dependencies | Which findings the billing team can fix alone and which need the front desk, providers or a contract change | Two action lists with suggested owners |
Workflow mapping
Interviews with the people who do the work: how does a charge get entered, who reviews holds, who reads the rejection report, who posts payments and how are adjustments decided. The map usually reveals a step that exists in policy and not in practice, such as a daily rejection review that actually happens on Fridays when there is time. Thirty to sixty minutes with each person is enough, and the interviews often produce the most useful findings of the whole engagement.
Encounter-to-claim reconciliation
Arrived appointments compared with signed encounters compared with accepted claims for a defined period, by date of service. This is the test for unbilled work and it is where the largest findings usually are. The method is described in detail in this article on unbilled encounters. An audit that skips it has not looked at the largest category of leakage, whatever else it found.
Submission lag and remittance review
Lag is measured by provider and payer, with the distribution rather than just the average: a median of three days with a tail of encounters at forty days points to a specific provider or visit type, and the tail is where filing limits are breached. The remittance review takes a sample, usually the top three payers, and compares the allowed amount on each line with the contracted rate. Small variances at scale are real money, and a payer applying an outdated fee schedule is a finding the practice can act on the same week.
How to read the findings report
A findings report should let you answer four questions in ten minutes: how much revenue is at risk, where in the process it is lost, who has to act, and what to do first. Look for these sections:
- Executive summary with the quantified findings in a single table and the three actions that recover the most.
- Method: the period reviewed, the reports used, the sample sizes, and any data the auditor could not get. An honest audit lists its limits.
- Findings by process step, each with the evidence, the estimated dollar impact, and whether it is recoverable or a future prevention.
- Practice actions and billing-team actions, separated, with an owner suggested for each.
- Appendices: the raw lists (unbilled encounters, unworked rejections, denials by reason, underpaid lines, unapplied cash) that the team will actually work.
The separation of practice actions from billing-team actions is the part everyone skips, and it matters. Without it the billing team is blamed for eligibility failures it did not cause, and the front desk never learns that the denials started at registration. A finding like "140 eligibility denials in the quarter" belongs to the front desk; "27 rejections never resubmitted" belongs to billing. The report should say so.
What the audit does not do, and what to prepare
It does not fix the claims it finds; that is remediation, and it should be scoped separately so you can decide who does it. It does not negotiate contracts, and it does not give legal opinions. An audit that bundles all of that into one price is usually a proposal for a billing contract in disguise.
What the auditor needs from you: read access to the practice management system, EMR and clearinghouse (or data exports for the period), payer contracts and fee schedules where available, and thirty to sixty minutes with each of the people interviewed. The more complete the fee schedules, the more useful the remittance review. If you cannot find your contracts, say so early; that absence is itself a finding, and the auditor can still sample remittances against the Medicare fee schedule as a reference point.
Signs of a weak audit
Findings expressed only as industry averages ("practices typically lose 5 to 10 percent") rather than your numbers. No encounter-to-claim reconciliation. No remittance sample. Recommendations that all point to a single product or a billing contract. No appendix lists. And no statement of method: if the report does not say which period was reviewed and which reports were used, you cannot tell whether the findings are measured or estimated.
Honestly, a free audit that consists of an AR aging chart and a benchmark is not worthless; it may be an accurate description of a symptom. Just do not mistake it for a diagnosis, and do not sign a multi-year billing contract on the strength of it.
What happens after the audit
Practices usually take one of three paths. Some fix the process gaps internally, using the appendix lists to rework recoverable claims and the recommendations to change the weekly rhythm. Some hire help for specific pieces, such as working the unresubmitted rejections before filing limits pass, or building the denial log. Some use the audit as the baseline for a billing transition, so the new vendor starts with a documented state and a defined legacy AR scope. The right path depends on the size of the findings and on the capacity of the team; the audit should give you the facts to decide, not decide for you.
Once the weekly reconciliations exist, a light version of the audit can run every quarter in an afternoon: refresh the encounter-to-claim comparison, look at denials by family, sample twenty remittances. The full audit is then needed only when something changes: a new system, a new billing team, a new payer contract, or a merger.
Questions we hear
How long does an audit take?
In our experience, two to four weeks from access to findings for a single-entity practice with a 90-day window, most of it waiting on data access and interview scheduling. Larger groups, longer windows and missing fee schedules add time.
How much leakage do practices typically find?
It varies widely. Practices with an unreconciled charge process often find unbilled encounters worth one to three percent of charges. Denial and underpayment findings add to that. Your report shows your own numbers, not an industry average, and that is the whole point.
Do we have to use the auditor for billing afterwards?
Not with Revelrex. The findings are yours. Some practices fix the issues internally, some hire us for specific items, some move billing to Revelrex. The Revelrex RCM Audit is a fixed-scope engagement built on the seven components above and is priced to stand on its own; rates are on the pricing page.
What to do this week
- Locate your payer contracts and fee schedules for the top three payers. If you cannot find them, request current copies from the payers now; every remittance review depends on them.
- Confirm you can produce three reports by date of service for the same 90-day window: arrived appointments, signed encounters and accepted claims.
- Write down who currently reads the rejection report, who works the hold queue and who decides adjustments, and check those answers with the people named.
- If you have received a "free audit" recently, check it against the seven components and note which are missing.
- Decide before any audit begins who will own remediation, so the findings report lands with someone who can act on it.
