What a billing audit actually examines

"Free billing audit" is offered by nearly every billing company, and in most cases it means a sales call with a spreadsheet attached. A real one is a diagnostic: it reads ninety days of claims data and tells you where money is going, including the possibility that nothing much is.

Here is what is actually worth examining, and what each finding means.

1. Lag between service and submission

Measure the median days from date of service to date of first submission.

Anything above two or three days is free delay. This is the cheapest thing to fix in the entire revenue cycle and one of the most common findings, because submission lag is invisible from inside a practice — nobody experiences it as a problem, it just quietly pushes every payment later.

2. First-pass acceptance

The share of claims accepted on first submission, with no rework.

Below about 93% means something systematic. The useful part is not the figure but the breakdown: which payer, which code, which provider. A single provider with a documentation habit, or one payer with an edit nobody has accounted for, will often explain most of the gap.

3. Denial rate, by reason

The aggregate rate matters less than the distribution. Eligibility denials point at the front desk. Coding denials point at documentation or coder training. Authorisation denials point at scheduling. Timely-filing denials point at follow-up capacity.

Each one has a different owner, and a report that gives only a percentage tells you nothing about who can fix it.

4. Appeal rate and appeal outcome

Of denials received, how many were appealed at all? And of those, how many were overturned?

A low appeal rate with a high overturn rate is the most expensive pattern there is: it means the claims being abandoned were winnable. This is where recovered money usually comes from when a practice switches billers, and it is the finding most likely to be uncomfortable.

5. A/R ageing distribution

Not the average — the buckets. Current, 31–60, 61–90, 91–120, over 120.

Over 20% sitting beyond 90 days means a meaningful share is approaching the point where timely-filing limits make it worthless.

6. Write-offs, by category

Contractual adjustments are expected. Administrative write-offs are a decision someone made.

The question worth asking is how much was written off as uncollectible without ever being appealed, and whether anyone reviewed those decisions. Write-offs are the easiest place for underperformance to disappear.

7. Underpayments against contract

Payers do not always pay their own contracted rate. Comparing actual reimbursement against the fee schedule, line by line, surfaces shortfalls that no denial report shows — because the claim was paid, just not correctly.

This is tedious and most practices never do it. It is also one of the few findings that recurs every single month until someone notices.

8. Patient responsibility collection

What share of patient balances is actually collected, and how long it takes.

Rising deductibles have made this a materially larger slice of practice revenue than it was a decade ago, and it is frequently the least managed part of the cycle.

9. Credentialing and enrolment status

Claims denied because a provider was not enrolled with a payer, or whose enrolment lapsed, are both completely avoidable and surprisingly common — particularly after a new hire or a location change.

What an honest audit can conclude

That your billing is fine.

If the numbers are in range, the right answer is to say so. A diagnostic that finds a problem every time is not a diagnostic — it is a sales process with better vocabulary.