Not Just About Errors: Why Precision Is the Real Measure of Audit Quality
Article Reference Code: NAMAS.12.05.2025
Written by: Allyson Woolard, MBA, RHIA, CPMA, CPC, CPB, CMRS, CMCS, CDBS, CDC
If you’re new to medical auditing or an experienced auditor, you’ve probably come across terms like error rate and precision error rate. Do you know what these terms mean? Even some experienced auditors may not fully understand these key auditing concepts. They can sound complicated until they are broken down with examples. So, let’s look at what a precision error rate really is, how to calculate it, how to discuss it with a provider, and how it differs from a regular error rate.
Let’s start by reviewing what an Error Rate is – a foundational concept.
An error rate shows how often mistakes happen during a coding or documentation review.
Think of it as the percentage of claims that contain an error.
Example:
If you review 20 charts and find issues in 5 of them, the calculation looks like this:
5 ÷ 20 = 0.25 – which indicates a 25% error rate.
This means one out of every four charts had a coding or documentation problem — maybe a wrong procedure or service code, a missing diagnosis, or insufficient documentation to support the billed service.
There are many possible examples of this, but to provide clarity for our new coders:
One example is billing a new patient office visit when the patient is already established with the provider. Another is billing both a wellness visit and an Evaluation and Management (E/M) service on the same date when the documentation does not support the additional E/M service.
In short, the error rate measures how many encounters (or claims) have problems.
Now Let’s Dig Deeper – What Is a Precision Error Rate?
Where the error rate shows how often mistakes occur, the precision error rate measures how accurate and consistent the audit itself is.
As an example, think of precision as the reliability of your aim.
If you were shooting arrows at a target, precision tells you whether you keep hitting the same spot every time — even if you’re not hitting the bullseye.
In auditing terms, it means:
“How closely do multiple audits (or auditors) agree on the same results?”
If two (or more) auditors come up with nearly identical findings when checking the same charts, your audit process is precise. If their results vary widely, precision is low — and that’s a sign that there may be ambiguity within the audit.
Why Precision Error Rate Matters
Precision helps determine how trustworthy your audit results are.
If you work for a company where another auditor or auditing supervisor reviews your work, it’s likely that they evaluate your audits — and from that review, a precision error rate can be calculated.
A high precision rate means the findings of your audit are reliable — other auditors reviewing the same charts would likely come to the same conclusions.
A low precision rate might mean that the audit guidelines aren’t being interpreted consistently, or that documentation isn’t clear enough to support a confident decision. There’s ambiguity in the audit.
For healthcare providers, precision builds confidence that audit results reflect accuracy rather than just one person’s viewpoint. A provider is often more likely to trust audit findings when two reviewers have analyzed the same documentation and arrived at the same conclusion. This agreement can also help auditors reinforce the validity of their results when discussing them with providers.
How to Calculate a Precision Error Rate
Now that we understand what a precision error rate is and why it’s important, let’s examine how it’s calculated.
Here’s a simple way to calculate the precision error rate:
- Select your sample — for example, 20 encounters.
- Perform your audit — identify what you believe are errors.
- Have another auditor (or even auditors) re-audit the same records.
- Compare the results — how many findings match your initial review?
The formula to use is:
Precision Error Rate = Number of Matching Results ÷ Total Audited Cases × 100
For example:
You and your supervising auditor each review the same 20 claims.
You both agree on 18.
18 (agreed upon) ÷ 20 (that were audited) = 0.9 (x100) = Precision of 90%
That means your audit findings were 90% consistent with your supervising auditor — which means that they were very reliable.
If you only agreed on 12 of 20, your precision would be 60%, which would signal the need for review of either the guidelines used or how each auditor interpreted them.
Explaining Precision Error Rate to a Provider
When communicating with providers, keep your message clear and practical. Avoid using audit-specific jargon or language that could be interpreted negatively. The goal is to maintain a positive, professional tone — not to frustrate or upset the provider. You could say something like this:
“Dr. Smith, the precision rate tells us how consistent the audit findings are. In other words, if another auditor reviewed these same records, how likely would they reach the same results? A high precision rate means the audit is reliable. If the rate is low, it means there might be room to improve how documentation supports the coding or how the rules or guidelines are being applied.”
This approach keeps the discussion positive — you’re not just pointing out errors; you’re explaining how to strengthen consistency and clarity in their documentation.
What’s the Difference – Error Rate vs. Precision Rate:
Here’s an easy comparison table:
| What It Measures | Example Question It Answers | |
| Error Rate | The percentage of encounters with mistakes | “How many encounters were coded incorrectly?” |
| Precision Rate | How consistent and accurate the audit findings are | “How reliable are these audit results?” |
In short:
- Error rate = measures the problems.
- Precision rate = measures confidence in the findings.
Both are important for creating a clear, accurate picture of coding and eliminating any ambiguity that might exist.
The Bottom Line
In medical auditing, these rate measurements are just the starting point—it’s how you interpret, apply, and communicate them that truly makes an impact. Keep communication positive and focused on what providers need to know without overwhelming them with excessive technical details. Remember, audits aren’t meant to criticize but to identify opportunities for improvement, ensure compliance, and enhance documentation accuracy.
So, keep in mind…
- Error rates show the percentage of encounters that included mistakes.
- Precision rates show how confident you can be in those findings.
When auditors clearly explain both, providers begin to view audits as valuable tools for growth and quality improvement. Let’s shift the perception around auditors and provider education to show that we’re not here to criticize — we’re here to support, guide, and assist providers in our area of expertise.
By offering clear insights, practical feedback, and actionable recommendations, we help them improve documentation, ensure compliance, and ultimately enhance patient care.
If you have questions about this article or it’s content- Click here to connect with Allyson Woolard here on LinkedIn
Allyson Woolard, MBA, RHIA, CPMA, CPC-I, CPB, CMCS, CDC
Passionate, dedicated, life-longer learner in all things medical and dental billing, coding and auditing. I have devoted 20 years of service to the healthcare industry and revenue cycle management as a manager, business owner, coder, auditor, educator, and consultant….and I love what I do!
“Find a job you enjoy doing, and you will never have to work a day in your life.”
― Mark Twain.
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