For Ambulatory Surgery Centers (ASCs), payor contracts are the backbone of steady revenue. But with that critical revenue stream comes a challenge many ASCs dread: the payor contract audit.
Payor audits are on the rise as insurance companies tighten their review processes to manage rising healthcare costs and root out billing errors or non-compliance. Unfortunately, many ASCs find themselves scrambling when an audit notice arrives — risking payment delays, revenue clawbacks, or even contract terminations.
The good news? A proactive payor contracting strategy and smart preparation can help your ASC pass an audit with confidence. Here’s what you need to know — and the key steps to get your center ready.
Why Do Payors Audit ASCs?
Payors conduct audits for several reasons:
- To ensure accurate billing and coding: They want to verify you’re billing correctly for services provided.
- To confirm medical necessity: Auditors may check if procedures meet the criteria laid out in your contract.
- To catch overpayments or fraud: Insurance companies use audits to recoup funds if they find overpayments.
- To assess contract compliance: Payors verify that your ASC follows all terms in your payer contracting agreements.
A surprise audit can be stressful, but if your ASC has a strong payor contracting strategy and clear documentation, you can minimize disruptions.
Understand Your Contracts Inside and Out
One of the biggest mistakes ASCs make is not fully understanding the details of their payor agreements. Every contract is different — and even a small oversight can cause problems during an audit.
Start by gathering all active contracts and review:
- Covered procedures and exclusions
- Reimbursement terms (fee schedules, bundled payments, global periods)
- Authorization requirements
- Timely filing deadlines
- Audit and appeals clauses
Keep a centralized database of these contracts. Make sure your coding, billing, and scheduling teams all understand key provisions. A clear grasp of your payer contracting details prevents costly missteps.
Perform Regular Internal Audits
Don’t wait for the payor to catch mistakes. Conduct routine internal audits to review:
- Claims accuracy and coding
- Documentation completeness
- Authorization records
- Payment posting and adjustments
Internal audits help you catch small errors before they become big issues — and show payors that your ASC takes compliance seriously. Many ASCs work with consulting partners to build audit programs that strengthen their payor contracting strategy.
Strengthen Documentation Standards
Good documentation is your best defense in a payor audit. If you can’t prove that a procedure was medically necessary and billed correctly, the payor can deny the claim or demand repayment.
Train physicians and clinical staff to:
- Record detailed procedure notes
- Justify medical necessity clearly
- Use correct CPT and ICD-10 codes
- Attach all required supporting documents
Consider using checklists and templates to ensure consistency. Solid documentation supports your payer contracting terms and speeds up any appeals process if claims are challenged.
Verify Authorization and Eligibility Every Time
One common audit red flag is performing services without proper authorization. If your contract requires prior approval, missing it can mean denied claims or refund demands.
Build robust front-office workflows to:
- Verify patient insurance benefits for every case
- Obtain and document pre-authorizations for procedures
- Keep clear records of all approvals
A well-managed authorization process is a key part of a smart payor contracting strategy — protecting your revenue and avoiding surprise denials.
Keep Communication Lines Open with Payors
Too often, ASCs only hear from payors when there’s a problem. Strong payer relationships can help reduce audit surprises and resolve issues faster.
- Assign a dedicated staff member to handle payor communications.
- Build rapport with your payor reps — they can clarify contract terms or flag potential issues.
- Attend regular meetings with major payors to discuss claims trends, denials, or policy changes.
A proactive approach shows your ASC is committed to contract compliance and positions you as a trustworthy partner.
Train and Educate Your Team
Your billing, coding, and administrative staff are on the front lines of audit preparedness. Regular training keeps everyone updated on:
- Current coding guidelines
- Changing payor policies
- Proper claims submission workflows
Consider quarterly refresher sessions and real-life scenario training. A well-trained team is a vital part of any strong payor contracting strategy.
Turn Audits Into an Opportunity
While payor audits can feel like a threat, they’re also a chance to strengthen your ASC’s operations. A clean audit builds trust with payors, which can help in future contract negotiations. It can also reveal gaps in your billing or documentation processes that you can fix — boosting revenue cycle performance overall.
Partner with Experts to Stay Ahead
Many ASCs choose to work with an experienced consulting partner to keep audit risks low and maintain airtight payer contracting practices. Companies like Amblitel provide:
- Contract negotiations and reviews
- Revenue cycle management
- Ongoing internal audit support
- Staff training and documentation best practices
By partnering with experts, your ASC can build a sustainable payor contracting strategy that stands up to scrutiny and supports growth for years to come.
Final Thoughts
A payor contract audit doesn’t have to disrupt your ASC’s cash flow — if you’re prepared. By understanding your contracts, conducting regular internal checks, maintaining thorough documentation, and working proactively with payors, you can navigate audits with confidence.
Is your ASC audit-ready? Now’s the time to assess your strategy and tighten your processes — so your payor contracts continue to deliver the revenue your center depends on.
