If 4 bitewings and 3 PA's are taken on the same visit the appropriate way to code this visit would be the following:
D0274 x 1 (bitewings- four radiographic images)
D0220 x 1 for the 1st PA (periapical first radiographic image)
D0230 x 2 for the additional 2 PA's taken (periapical each add image)
Your billing auditor is incorrect, bitewings would not be considered a first radiographic film. A bitewing is just that a "bitewing" meaning in many cases it does not expose the entire root tip which is needed to be considered a periapical film. Bitewings are a different type of x-ray and have their own code for a reason.
For more information on x-rays and usage guidelines please refer to the utilization review guidelines published by CMS and Delta Dental.