We are certain of a few things in life: death, taxes, and severe punishment by federal/state agencies when you cannot justify your billing. We can at least discuss a solution to the “lack” of billing documentation.

All medical practices are required to keep billing records for a minimum of seven (7) years from the date of the last payment or correspondence. Typically, medical practices do a mass “purge” of records by utilizing a report from the billing system to provide a list of patients with zero balance with a date parameter. These files are then all boxed at one time with a destroy date of seven years later from the box date. This is the same method as if there is a zero balance as of the date parameter used then feasibly there will have been no other activity in that patient file. Charts for minors should be charted and boxed separately, as you are required to keep the charts to the age of majority PLUS 7 years. The best solution here is to add 25 years to the date these charts are boxed for zero balance/inactive.

If you close or sell your practice, you are still required to maintain records for the same number of years respectively. You cannot have a document destruction company come in with a truck to destroy records because you no longer are associated with the practice or the patients.

Here is the question I have heard, “Well, what can happen to me; I am not in business anymore? The answer is more horrifying than death and taxes put together. For example, Medicare or another federal or state agency has requested a sample of 30 files for a 12 month period (1/1/06-12/31/06) in the mail in a post-payment audit. You had no documentation to back up any of those 30 patients requested because you destroyed the records. This will result in a 100% error rate and a “financial enema.” You must also be able to provide documentation to support all services ordered and provided by other health care facilities/providers. Statistically, there is a 100% error rate therefore 100% of the charges you billed during that 12 month period are invalid so you must pay back all payments for that 12 month period PLUS potential fines and other penalties. This can result in several hundred thousand or millions of dollars depending on your practice.

Yes, it may seem more cumbersome to “do it right the first time,” but it will save you thousands upon thousands of dollars in the long run.

Evaluate the cost of imaging all your documents compared to the number of years you will have to pay for storage of those documents. If you have an audit, evaluate the cost of imaging the documents versus copying. Imaging is very sophisticated and can use the bate stamp process to image documents now. The cost of imaging is typically less than a black and white copy to paper. Don’t forget healthcare offices are required to be completely electronic by 2010. If you haven’t started looking into an EMR package, do not wait.

Protect your assets—make sure you keep copies of your records. This is critical!

Angela Miller
Medical Auditing Solutions, LLC
972-459-1508
medaudsolutions@aol.com
www.medicalauditingsolutions.com