Check Out Our Expert Insights on How to Develop Strong Audits (and Leverage the Results)

Internal auditing and monitoring is one of the seven elements the Office of Inspector General (OIG) has outlined as guidance for effective compliance programs within individual and small-group physician practices.

As government and private payers accelerate their efforts to combat fraud, waste, and abuse through audits, it is imperative that providers and organizations are prepared. All providers who submit claims to payers (government and/or commercial) may be subject to audits, both internal and external.

Understanding the Audit Process

A solid understanding of healthcare organization audits can lead to effective dialogue and a more streamlined audit process. Here’s a list of what these audits typically focus on:

  • Missed charges
  • Bundling/unbundling  
  • Medical necessity 
  • Adherence to payer rule and guidelines 
  • Underbilled/overbilled services  
  • Potential fraud, waste, and abuse 
  • Undocumented services  
  • Denied services  
  • Down-coded services  
  • Thorough medical record chart review  
  • Patient data (demographics) 
  • Physician signatures 
  • Signed consent forms  
  • Insurance claim forms 
  • Superbill/charge tickets 

Audit Process: Are You Closing the Loop?

During your audit process, it’s important that you develop a robust process that includes an overall plan, as well as an objective for the audit. Collaboration is critical – make sure you engage all stakeholders and fully communicate what the audit will include.

Here are the typical phases of an audit process:

Set Your Audit Up for Success

Organizations may be faced with various types of healthcare audits, and thorough preparation contributes to a successful outcome. When preparing for an audit, it is essential to:

  • Understand the scope of the audit and potential issues that may arise.
  • Conduct an internal compliance assessment to identify which billing records, patient charts, and supporting documentation need to be scrutinized.
  • Identify any early concerns, possibly related to numerous denials or refund requests (you can query your denial report to detect trends).

Data Gathering/Review

This is often confidential, and information is only shared with the Compliance Officer at this time. Remember to use secure methods of messaging and responding. At this point, many organizations:

  • Data mine the billing software to determine audit focus.
  • Define measurements by identifying the date range and sample size (typically 10 random charts per physician or coder) and establishing the audit timing.
  • Perform a random sampling of charts to be reviewed (typically no more than three to six months old).
    • This can depend on the bandwidth of your compliance program.
  • Review all pertinent medical records and billing reports before the audit is performed.
    • Identify whether clinical documentation supports services rendered and billed.
    • Review what the guidelines and payer/policy documents state.
  • Generate an Audit Report that includes audit details and summarizes the audit findings.

Discuss Key Findings

Schedule a meeting with the provider to discuss audit key findings, recommendations, and post-audit education.

Based upon audit findings, a subsequent audit and/or training will occur within 30, 60, or 90 days or annually if the provider has successfully passed the audit given the pre-determined facility threshold; this is part of the compliance program’s continued auditing and monitoring process.

Individual and group audit reports are submitted to the Compliance Officer and the organization’s board, then subsequent policy and procedures may be warranted depending on audit findings.

Why are Audit Results Important?

It allows providers and organizations the opportunity to be proactive and knowledgeable about what’s going on within their group, and build a culture of compliance by:

  • Identifying improper billing practices and increasing revenue integrity
  • Detecting coding errors and risks early 
  • Improving patient safety and delivering positive patient experiences 
  • Identifying emerging trends 
  • Responding to risks before large issues arise 
  • Developing policies and procedures to ensure compliance 
  • Audits are a vital way to evolve your compliance program and your team’s approach to compliance in their day-to-day activities.  

Maximize the Potential of Your Audits

Audits are a vital way to help your organization highlight areas of opportunity, improve your processes, and create a compliance strategy powered by data and results.  By engaging with your providers and team, you can demonstrate the importance of a strong compliance program and emphasize the critical role they play in ensuring your organization stays compliant.


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