Here’s a number worth remembering: $262 billion. That’s the amount denied out of $3 trillion in claims submitted by U.S. hospitals in a single year (HFMA, 2021).
That’s not a rounding error – it’s a crisis.
Pre-bills auditing offers healthcare leaders a way out of this denial spiral. Yet most hospitals are still stuck doing retrospective clean-up with post-bill audits.
If you’re a hospital CFO or an RCM leader trying to stabilize cash flow, reduce takebacks, and improve documentation accuracy, this blog is for you.
What is Pre-Bill Audit?
Pre-bill auditing is the structured process of reviewing coding, documentation, and billing information before the claim is submitted to payers.
Pre-bills are quality gates. They act as your final opportunity to ensure clinical accuracy, compliance, and financial integrity – all before your claim hits the payer’s desk.
Pre-bill auditing typically includes:
- Validation of MS-DRG, APR-DRG, and CPT to diagnoses assignments
- Clinical validation of SOI (Severity of Illness) and ROM (Risk of Mortality)
- Capture and clarification of CC/MCC indicators
- Identification of documentation or code mismatches that could trigger a denial
What’s Wrong with Current Processes?
Most hospitals rely heavily on post-bill audits – spot checks done after submitted claims. That’s like proofreading an email after you’ve hit send.
Here’s what that results in:
- Delayed reimbursements
- Manual rework and rebilling
- Increased third-party scrutiny
- Missed revenue due to preventable errors
- These gaps aren’t just operational inefficiencies. They’re silent killers of revenue.
Recommended Read: How Revenue Cycle Optimization Can Boost Your Bottom Line
The Rising Challenge: Why Pre-Bills Are Non-Negotiable Now
Post-pandemic, payers have become stricter. Denials have become more complex. Your documentation has to be watertight.
The Problem:
- Denial rates have risen 10-15% across systems (Experian, 2023).
- Clean claim rates are declining.
- Your team is likely overwhelmed, under-resourced, or both.
The Impact of Not Doing Pre-Bill Auditing:
- Revenue leakage from under coding or missing CC/MCCs
- Downgrades due to lack of documentation support
- Lower SOI/ROM scores affecting quality metrics
- More RAC audit exposure
- Slower cash flow and missed forecasting targets
How Pre-Bill Auditing Works (with Examples)
Let’s demystify it. Here’s a practical example:
A patient is admitted with pneumonia. The coder assigns a DRG, but misses that the patient also has acute kidney injury – something buried in the narrative note.
A pre-bill audit catches this and updates the coding to reflect both conditions, capturing a CC, increasing reimbursement, and ensuring accurate reporting.
Another scenario:
Your coders enter the right ICD-10 codes, but forget to apply the correct modifier for a procedure done by two surgeons.
A pre-bill audit identifies this, flags it, and prevents a denial for incorrect modifier usage.
The takeaway?
Pre-bill auditing is not just compliance. It’s proactive revenue protection.
Why ARC+ Is the Gold Standard for Pre-Bill Auditing
Most platforms offer one-size-fits-all auditing. Bulwark’s ARC+ does more – it transforms your mid-rev cycle strategy.
What Makes ARC+ Different:
“AI reviews in ARC+ help surface diagnoses missed by the billing team. It helped us catch it before it went out, saved us hours of re-work” – A RCM team leader at a leading hospital system
AI-Powered Precision
ARC+ scans 100% of coded and clinical data using a proprietary multi-agent AI engine. It doesn’t just catch typos – it finds missed revenue, validates DRGs, and flags clinical inconsistencies that most humans would miss.
Pre-Bill Reviews at Scale
Hospitals using ARC+ can see increased pre-bill reviews and CC/MCC capture accuracy. That means more clean claims, fewer denials, and faster cash flow.
Smart Prioritization
AI identifies high-risk encounters (e.g., cardiac, sepsis, pneumonia) and pushes them to the top of the queue. Your reviewers focus on where it matters most – maximizing ROI per review.
CDI + UM + Compliance, All in One
ARC+ isn’t just a pre-bill tool. It’s a comprehensive mid-rev cycle platform that powers:
- Concurrent & retrospective CDI reviews
- Utilization management workflows
- RAC audit readiness
- Real-time quality metric tracking (SOI/ROM, PSIs)
How to Get Started with Pre-Bill Auditing
Implementing pre-bill auditing isn’t as heavy a lift as you might think, especially with ARC+.
Here’s how to start:
Run a Denial Baseline Audit:
Quantify your denial rate, claim rework time, and reimbursement lag.
Schedule a Demo of ARC+:
See how it integrates with your EMR, automates workflows, and delivers ROI. You can book a demo here.
Prioritize Risk Areas First:
Start pre-bill auditing on DRGs with the highest denial rates.
Coach Your Team Using Provider Scorecards:
ARC+ gives you actionable dashboards to improve performance system-wide.
Conclusion: Pre-Bills Are the New Frontline of Revenue Defense
Hospital CFOs don’t need more dashboards – they need fewer denials, faster reimbursements, and fewer coding errors.
Pre-bill auditing is how you get there.
And ARC+ is how you scale it without burning out your team.
If you still rely on post-bill reviews to protect your revenue, you’re playing catch-up in a game that demands precision.
Ready to stop denials before they start?
Book a demo with Bulwark today and discover how Bulwark’s ARC+ gives you the edge where it matters most.
