What is the purpose of an audit in healthcare billing?

• A. A review process to ensure that a facility is following laws, procedures or contract terms.
• B. A process to evaluate staff salaries.
• C. A test of clinical skills.
• D. An inventory audit.

Answer: (A)

Audits in healthcare billing are meant to verify that the billing process follows applicable laws, procedures, and contract terms, and that every claim is supported by documentation and billed correctly. By reviewing codes, modifiers, documentation, and payer requirements, an audit checks for proper coding practices, prevents improper payments, and helps identify gaps in procedures that could lead to compliance risk or revenue loss. It also prepares the organization for external reviews by payers or regulators and supports ongoing improvements in the revenue cycle. Other activities like evaluating staff salaries, testing clinical skills, or counting inventory address different areas and aren’t focused on the accuracy and compliance of billing.