Audit tip: The 5-year audit period

Issue: BCMJ, vol. 56, No. 10, December 2014, Page 517 Billing Tips

While there will be a specific trigger for your on-site audit, did you know that when the audit is conducted on your practice the medical inspector will look at all entries in the medical records? Did you know that the total errors identified during the audit are extrapolated over the entire 5-year audit period?

During an audit, a statistically representative random sample of services billed is established and the medical records reviewed by the medical inspector. If the medical record does not support the fee billed or supports a lesser fee, then that service will be adjudicated by the medical inspector as an error. An error rate for the sample is then established, and that error rate is extrapolated to all the services billed during the 5-year audit period. What this means from a practical perspective is that errors found during the audit may result in a request for recovery. Audit recoveries can be substantial. To put this in perspective, we will use the following example of an audit that was triggered by high counseling visits.

Dr A, a busy urban physician, has MSP billings over the 5-year audit period of $1 800 970.54. Dr A has been inappropriately billing counseling visits when the documentation only supports an office visit. He also has multiple missing records. After giving Dr A credit for the office visits, Dr A's total error rate based on dollars is 18%. The error rate is then extrapolated, using statistical tools, to all the billings over the audit period. The result will be a quantification of approximately $320 000.

This is why it is important to make sure you are billing correctly and documenting what you do. Could you afford to pay this amount of money back? Do not assume that because you have been paid for the services you have billed that you have billed them correctly. If you are unsure of what to bill, call Doctors of BC.
--Keith White, MD, Chair, Patterns of Practice Committee


This article is the opinion of the Patterns of Practice Committee and has not been peer reviewed by the BCMJ Editorial Board. For further information contact Juanita Grant, audit and billing advisor, Physician and External Affairs, at 604 638-2829 or

Keith J. White, MD. Audit tip: The 5-year audit period. BCMJ, Vol. 56, No. 10, December, 2014, Page(s) 517 - Billing Tips.

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