Conducting a CDM Audit
Sequential Steps in Conducting a CDM Audit
FROM START TO compliance, an internal audit progresses through more than a dozen broad actions, beginning with defining
the goal, scope, and frequency of the audit and ending with monitoring and follow-up. The steps described in this article are
highlighted in the figure below.
Stakeholders meet and
define audit goal, scope,
Select or appoint actual
audit team members
Secure audit space
Gather audit supplies,
references, and tools
Audit (review and
validate) data within the
CDM fields and note
on specific updates
Make the changes
Validate all data changes
in the new CDM
Post the revised charges
to patient accounts
Conduct random or
targeted sampling of
Track claims denials for
trends or patterns
educate, and follow up
heating, ventilation, air conditioning? Is there adequate
table or desk space?
x Equipment: Is the available equipment sufficient to sup-
port staff needs? Are computers available and are the
speed, hardware, and software robust enough to meet
x Supplies: Are software programs available to staff to sup-
port the auditing effort? Are reference materials available?
Once these questions are answered, then the audit can be designed and conducted.
Designing an Audit
Audit design is driven by the goal, scope, and frequency considerations. The main goal of any CDM audit is to validate accuracy
and consistency to support claim submission, compliance, and
the revenue cycle.
The CDM audit with the broadest scope is the audit of the entire CDM, in which every field is reviewed and validated. For
large organizations this can be a daunting challenge, requiring
many resources, which is why this review is usually performed
no more than annually. Most audits will be narrower in scope.
For example, if the CP T code for a given service is changed, then
a review of only the charge description and CPT code fields is
There are several factors that drive audit frequency. One is periodic CPT code additions, changes, or deletions by the American Medical Association. As new CP T codes are created, old ones
deleted, and others modified, CPT codes within the CDM must
also be changed to ensure compliance. Additionally, HCPCS
Level II codes are updated yearly and should also be considered
for addition, modification, or deletion from the CDM. The CPT/
HCPCS code fields within the CDM must be audited every time
official CPT/HCPCS code changes are published.
Another factor which drives audit frequency is public and
private payer guidelines. Payers will periodically issue National
Coverage Determinations or Local Coverage Determinations, in
which they communicate changes to payment rules for various
healthcare procedures and services. As each new coverage determination is published, the CDM items for such services must
be audited to ensure compliance with the most current rules.
Other factors that drive audit frequency include quarterly and
yearly changes to the prospective payment system, periodic
changes to the Office of the Inspector General Work Plan, and