A billing audit in a pulmonology practice is one of the most valuable—and most underutilized—tools available to a practice manager or compliance officer. When performed consistently, internal audits help identify documentation gaps and coding errors before a payer discovers them, protect against costly recoupment demands, and uncover revenue opportunities that may otherwise be overlooked. Many healthcare organizations partner with experienced pulmonary & critical care billing services providers to conduct comprehensive audits, improve compliance, and strengthen revenue cycle performance.
The challenge is that pulmonology billing is highly complex. The specialty encompasses office-based evaluation and management, pulmonary function testing, critical care, bronchoscopy and interventional procedures, and sleep medicine—each with its own coding rules and documentation requirements. A meaningful audit must evaluate all of these areas systematically to ensure billing accuracy. Leveraging specialized pulmonary billing services can further help practices reduce coding errors, minimize claim denials, and maintain compliance with evolving payer and CMS guidelines.
This checklist is designed to be used quarterly by a practice manager, compliance officer, or billing supervisor. It can also be adapted for use by an external auditor conducting a focused review, making it a practical resource for maintaining accurate documentation, improving reimbursement, and supporting long-term financial health.
Before You Begin: Audit Setup
Define the Scope
Before pulling a single claim, define what this audit will cover. A comprehensive pulmonology audit typically includes:
- Office E/M visits (new and established)
- Pulmonary function testing
- Critical care services (CPT 99291/99292)
- Bronchoscopy and interventional procedures
- Hospital E/M services (admission, subsequent care, discharge)
- Ancillary services (thoracentesis, chest tube, pleural biopsy)
For a quarterly audit, prioritize the service categories with the highest claim volume and the highest historical denial rates in your practice.
Select Your Sample
Pull a random sample of claims for each service category. A statistically meaningful sample for a small practice is 10–15 claims per category per quarter. For larger practices or for categories with known compliance risk, increase the sample to 20–30 claims.
For each claim, pull both the submitted claim (with CPT codes, diagnosis codes, modifiers, and amounts billed) and the corresponding medical record documentation.
Assign a Reviewer
The reviewer should be someone with both coding knowledge and clinical literacy — ideally a certified professional coder (CPC or CCS) with pulmonology experience. A reviewer who cannot read a pulmonary function test report or interpret an ABG result will miss documentation gaps that a clinically trained auditor would catch immediately.
Section 1: Office E/M Audit Checklist
For each office visit claim reviewed, verify the following:
Patient demographics and insurance
- Patient name, date of birth, and insurance ID are accurate on the claim
- The provider NPI on the claim matches the rendering provider in the documentation
Diagnosis coding
- The primary diagnosis code is supported by the documentation
- ICD-10 codes are coded to the highest level of specificity (e.g., J44.1 for COPD with acute exacerbation, not J44.9 for unspecified COPD)
- All chronic conditions actively managed during the visit are coded (not just the presenting complaint)
- HCC-relevant diagnoses (for Medicare Advantage patients) are captured
E/M level selection
- The billed E/M level matches the documentation under the applicable coding guidelines (2021 AMA guidelines for most payers)
- If coded by MDM: the level of MDM (straightforward, low, moderate, high) is supported by the documented problems, data reviewed, and risk of complications
- If coded by time: total physician time is documented and the billed code corresponds to the correct time threshold
- New patient codes (99202–99205) are not used for established patients (seen within the prior 3 years by the same physician or same group, same specialty)
Documentation completeness
- The note contains a chief complaint or reason for visit
- The assessment addresses each active problem
- The plan is specific and actionable
- The note is signed by the rendering provider with a legible date
Section 2: Pulmonary Function Testing Audit Checklist
PFT billing is one of the most frequently miscoded areas in pulmonology. For each PFT claim reviewed:
Code selection
- The CPT codes billed match the specific tests performed (spirometry, DLCO, lung volumes, bronchodilator response, methacholine challenge)
- CPT 94060 (spirometry with bronchodilator) is not billed when only pre-bronchodilator spirometry (94010) was performed
- CPT 94726 (plethysmography) is not billed when only helium dilution or nitrogen washout was used for lung volumes (different codes apply)
- Global vs. professional/technical component billing is appropriate for the practice setting
Interpretation documentation
- A separate, signed interpretation report exists for each test billed
- The interpretation references the specific test values and provides a clinical impression
- The interpretation is signed by the interpreting physician (not a resident or technician without attending supervision)
- The interpretation is dated and matches the date of service on the claim
Medical necessity
- A diagnosis code on the claim supports the medical necessity of the testing
- If repeat PFTs were billed within a short interval, the documentation explains the clinical rationale for repeat testing
Technical quality notation
- The interpretation addresses the technical quality of the maneuvers (especially for spirometry — ATS/ERS acceptability and reproducibility criteria)
- Poor quality studies are flagged and the interpretation accounts for this
Section 3: Critical Care Services Audit Checklist
Critical care is the highest-risk area in pulmonology billing from both an overcoding and an undercoding perspective. For each critical care claim reviewed:
Medical necessity
- The documentation clearly establishes that the patient was critically ill (acute impairment of one or more vital organ systems with high probability of imminent life-threatening deterioration)
- The documentation does NOT describe a patient as “stable” or “doing well” in the context of a critical care claim
- The diagnosis codes on the claim support a critical illness presentation
Time documentation
- A specific time statement is present in the physician’s note (e.g., “I spent 52 minutes providing critical care services”)
- The documented time is consistent with the billed code(s) (30–74 min = 99291 only; 75–104 min = 99291 + 99292 × 1, etc.)
- Time is documented in minutes, not in ranges or approximations
Procedure time exclusion
- If a separately billable procedure was performed on the same day, the documentation shows that procedure time was excluded from the critical care time total
- The combined time (critical care + procedure) is clinically plausible
Duplicate billing review
- No other physician from the same group billed critical care for the same patient on the same date without documentation supporting separate, distinct services
Bundled services
- No separately bundled services (pulse oximetry, blood gas interpretation, chest X-ray interpretation, cardiac output interpretation) are billed on the same date as the critical care code
Teaching physician (if applicable)
- The teaching physician’s note contains a personal attestation of presence and time
- The teaching physician’s note is separate from (or clearly distinguished within) the resident’s note
Section 4: Bronchoscopy and Procedure Audit Checklist
Procedure billing in pulmonology requires careful attention to primary code selection, add-on code usage, and modifier application. For each bronchoscopy or procedure claim reviewed:
Primary code selection
- The primary bronchoscopy code accurately reflects the scope of the procedure (diagnostic, with biopsy, with BAL, with EBUS, etc.)
- The operative/procedure note is present and signed
- The procedure note documents the indication, technique, findings, and any specimens collected
Add-on codes
- All add-on codes billed are supported by the procedure documentation
- No add-on codes are billed for procedures not documented as performed
- Add-on code quantities match the documentation (e.g., number of biopsy sites)
Pathology linkage
- If biopsy codes were billed, a pathology report exists and is linked to the claim (important for audit defense, not always a claims requirement)
Modifier usage
- Modifier 50 (bilateral) is used correctly where applicable
- Modifier 51 (multiple procedures) is applied when appropriate
- Modifier 59 (distinct procedural service) is used correctly and not as a blanket unbundling modifier
Anesthesia and facility considerations
- If the procedure was performed under moderate sedation, the appropriate sedation code is billed (or confirmed as facility-provided)
- The place of service code matches where the procedure was actually performed
Section 5: Hospital E/M Services Audit Checklist
For practices that bill inpatient services (admission, subsequent care, discharge), verify:
Admission codes
- Initial hospital care codes (99221–99223) are used only on the date of admission
- The admission note supports the billed code level (documentation of history, exam, and MDM or time)
- If the patient was seen in the ER or outpatient setting on the same day as admission, the admission code is the only E/M billed (outpatient E/M is bundled into the admission)
Subsequent hospital care
- Subsequent care codes (99231–99233) reflect the documented MDM or time
- Daily notes are present for every billed date of service — no gap dates
- Notes are not copied forward without evidence of a new assessment each day (copy-forward documentation is a major audit finding)
Discharge services
- Discharge code selection (99238 vs. 99239) is consistent with the documented discharge management time (99239 requires more than 30 minutes)
- A discharge note is present in the record
Section 6: Compliance Red Flags to Look for in Any Chart
Regardless of the service category, the following findings in chart review warrant immediate attention:
- Cloned notes: Multiple consecutive daily notes that are word-for-word identical, suggesting copy-forward documentation without individualized assessment
- Upcoding pattern: Consistent use of highest-level codes (99215, 99233, 99223) across virtually all encounters without corresponding documentation complexity
- Missing signatures or dates: Notes that lack a dated, authenticated provider signature
- Templated critical care time: Every critical care note documents exactly “31 minutes” regardless of the actual clinical scenario
- Unsupported diagnoses: Diagnosis codes on claims that do not appear anywhere in the corresponding documentation
- Procedure codes without procedure notes: A bronchoscopy CPT code billed with no corresponding procedure report in the record
Section 7: Audit Scoring and Reporting
After completing the review, score each claim as:
- Pass: Documentation fully supports the billed service with no significant issues
- Minor finding: Documentation supports the claim but has a correctable gap (e.g., time statement uses a range instead of a specific number)
- Major finding: The billed service is not adequately supported and the claim should not have been submitted as billed
- Overcoding: The billed code is at a higher level than the documentation supports
- Undercoding: The billed code is at a lower level than the documentation supports (a revenue recovery opportunity)
Calculate your error rate for each service category and track it quarter over quarter. A major finding rate above 10% in any category requires an action plan — typically targeted physician education, updated documentation templates, and a re-audit in 60–90 days.
Produce a written audit report that documents the sample, the findings, the error rates, and the recommended actions. This report serves as evidence of a good-faith compliance program if a payer audit occurs.
Audit Schedule Recommendation
| Frequency | Activity |
| Monthly | Review denial trends by category and root cause |
| Quarterly | Full internal coding audit (10–15 claims per service category) |
| Annually | Comprehensive compliance review including all service lines, credentialing, and enrollment |
| After any payer education or focused review | Targeted re-audit of the specific service category flagged |
Summary
A consistent internal audit program is the most reliable way to protect a pulmonology practice from payer audits, reduce denial rates, and recover undercoded revenue. The audit process does not need to be elaborate — a quarterly review of a manageable sample of claims, scored against clear criteria, reported in writing, and acted upon systematically is more valuable than an infrequent comprehensive review.
The practices that invest in regular internal auditing spend less time fighting payers and more time focused on patient care. The compliance protection alone is worth the effort — but in most practices, the audit will also identify undercoded services that, when corrected, more than pay for the time invested.
Frequently Asked Questions
How often should a pulmonology practice conduct an internal billing audit?
Quarterly audits are the recommended standard — a sample of 10–15 claims per service category reviewed against documentation each quarter. Monthly denial trend reviews should complement the quarterly audit. If a quarterly audit identifies a major finding rate above 10% in any service category, increase to monthly audits in that category until the error rate resolves and document the corrective action taken.
What sample size is needed for a meaningful pulmonology billing audit?
For a small to medium pulmonology practice, 10–15 claims per service category per quarter is statistically sufficient to identify systematic patterns. For larger practices or for categories with known compliance risk, increase the sample to 20–30 claims. The goal is to identify patterns — random individual errors are less concerning than systematic errors that repeat across multiple providers or encounter types.
What are the most common findings in a pulmonology billing audit?
The most frequently identified findings include: missing time documentation in critical care notes, inadequate PFT interpretation reports that lack genuine clinical commentary, cloned or copy-forward daily notes for hospital patients, E/M codes billed at a higher level than the documentation supports, missing add-on codes for bronchoscopy procedures, and bundled services billed separately alongside critical care codes.
What is a cloned note and why is it a compliance risk?
A cloned note is a daily physician note that is substantially identical to the previous day’s note — produced by copying forward the prior note without individualized assessment of the patient’s current condition. Cloned notes are one of the most frequently cited findings in payer audits and OIG reviews. They suggest the documentation does not reflect actual daily clinical evaluation, which undermines the medical necessity of billed services.
What should happen when an internal audit finds a coding error?
Errors identified in an internal audit should be addressed at two levels. Individual errors may need to be corrected on the specific claim — potentially requiring a corrected claim submission or refund if the service was overbilled. Systematic errors require corrective action at the process level: physician education, updated documentation templates, and a re-audit in 60–90 days to verify the issue has been resolved. Document all corrective action in writing.
Can undercoding be identified in a billing audit?
Yes — and identifying undercoding is one of the most valuable outcomes of a regular audit program. If an audit finds that a physician consistently documents high-complexity care but codes at a lower E/M level than the documentation supports, that is a revenue recovery opportunity. Correcting systematic undercoding through physician education can recover meaningful revenue without any compliance risk.
What documentation should be reviewed in a critical care billing audit?
For each critical care claim reviewed, the audit should verify: (1) a specific time statement in minutes is present, (2) the documented time matches the billed code units, (3) the note clearly establishes that the patient met the critical illness threshold, (4) separately billable procedure time was excluded from the critical care total, (5) no bundled services were billed separately on the same date, and (6) for teaching settings, the attending’s personal attestation is present.