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Auditing

Healthcare audits are essential for analyzing operational compliance and adherence to quality standards. Also called clinical or medical audits, these processes generally assess where providers and staff are doing well and where they can improve. Audits in healthcare can support an improved patient experience, staff accountability, and healthier revenue cycle management (RCM).

However, they can also seem daunting due to the risk of exposure to improper billing or inaccurate documentation. These poor compliance practices can lead to revocation of billing privileges, exclusion from participation with payors, allegations of false claims, civil monetary penalties, and financial or reputation losses. By understanding the ins and outs of healthcare audits, your organization can stay on track and avoid adverse actions.

Examples of Audits in Healthcare

The process and scope of audits differ based on the type of audit being conducted. Here are the most common types of healthcare audits and what they mean for your organization:

1. Internal Audits

A healthcare internal audit is generally conducted within an organization to evaluate gaps, internal controls, and risks. This process may also be referred to as a healthcare self-audit, but it may be conducted by an outside review company. Internal auditors will detect weaknesses, inefficiencies, and areas for improvement in operational processes and procedures.

Below are examples of internal audits in healthcare:

Compliance/Legal: A compliance audit refers to an internal evaluation that determines adherence to legal and regulatory standards, such as the Health Insurance Portability and Accountability Act (HIPAA), Anti-Kickback, False Claims, Stark, and other federal laws and guidelines around patient care reimbursement.
Coding and Documentation: These internal audits aim to ensure that healthcare providers maintain accurate and complete medical coding and documentation. Coding and documentation audits may determine whether providers properly document patient encounters, diagnosis and procedure codes, and medical necessity.
Privacy and Security: These audit reviews analyze the privacy and security processes of healthcare organizations to ensure compliance. These processes may include adherence to HIPAA regulations, implementation of security measures, response to security breaches, and management of protected health information (PHI).

2. External Audits

An external audit refers to an independent external evaluation conducted by an auditing firm or individual. Typically, the main purpose of these audits is to assess fraud, abuse, and waste issues through an unbiased and objective investigation. External audit reviews will highlight improper payments, medical necessity, unsupported documentation, and duplicate claims.

Examples of external healthcare audits:

Commercial Payor: Private insurance companies or commercial payors will conduct these audit reviews to analyze claims and billing practices for accuracy. These audits will focus on specific billing codes for adherence to payor regulations and detect fraud or abuse.
Federal Government: An external audit conducted by federal government agencies, such as the Centers for Medicare and Medicaid Services (CMS), ensures compliance with Medicare and Medicaid. These auditors will analyze claims, billing practices, supporting medical record documentation, and overall adherence to program regulations.
Third-Party: These specialized audit reviews occur when a healthcare organization engages an external or third-party auditing firm to assess and evaluate cybersecurity, operational efficiency, and RCM.

3. Random Audits

Random healthcare audits analyze medical records to determine a healthcare organization's compliance and liability risk. This type of audit can be performed at any time without focusing on a particular subject. These audit reviews offer a glimpse into a medical facility's functions. The random approach enables auditors to sample various claims and cases and compare them to appropriate regulations and data. Random audits help healthcare organizations quickly identify whether a deeper audit is necessary to address potential threats.

Proactive and Reactive Audits Explained: What's the Difference?

Proactive and reactive healthcare audits are two sides of a well-designed compliance structure that focus on how healthcare organizations preemptively comb through potential risks that may lead to adverse events and respond accordingly to minimize such incidents.

A proactive audit is an internal audit that organizations can perform to ensure compliance in a collaborative manner. This approach lets healthcare systems identify potential audit exposure, enabling administrators to proactively address concerns that may lead to an audit in the future.

Healthcare organizations have an obligation to seek out issues in common areas of concern, including:

Frequently utilized services
Medication safety practices
Staff training and education
Preventative equipment maintenance
Services that are challenging to code
High-dollar procedures
Auditing new and at-risk providers

Reactive audits refer to how organizations respond when errors or risks are found. The goal of reactive audits is to contain the situation, minimize harm, and ensure compliance with legal and regulatory standards for patient care reimbursement.

Such actions could include:

Cybersecurity response
Data breaches
Incident investigation
Root cause analysis
Establishing malpractice insurance
Post-incident training and education
Creating incident response teams

Reactive solutions can also help mitigate repercussions and additional financial losses by repaying overpayments.

The Importance of Continuous Monitoring and Improvement in Healthcare

Navigating the process of healthcare audit reviews can be time-consuming and complex. Healthcare facilities that rely on a reactive approach for healthcare risk management may struggle to prevent medical errors and adverse outcomes from occurring down the line. Monitoring your organization's operations and documentation processes proactively can ensure ongoing compliance with regulations and industry standards.

Continuous monitoring enables providers and staff members to build sustainable compliance and mitigate risks.

A culture of compliance, along with an effective compliance program, will allow your health teams to better improve:

Patient outcomes
Process of care
Risk identification
Resource allocation
Care quality and safety
Documentation accuracy
Audit attention
Audit function
Cost-effectiveness
Clinical deterioration detection
Decision making

Protect Your Practice With Healthcare Audits From DoctorsManagement, LLC

Healthcare audits are a vital component of effective compliance plans. With ongoing monitoring and auditing, your practice can stay on top of regulation changes. DoctorsManagement, LLC, is committed to helping healthcare systems better understand organizational deficiencies to maintain compliance. Their practice compliance services include risk assessments, coding and auditing, and provider and staff training.

DoctorsManagement's experienced healthcare compliance specialists are well-versed in the complexities of medical compliance. They can educate and train your workforce to improve operational processes and mitigate risk. Their team will establish a tailored, long-term compliance plan that adheres to legal and ethical standards. If you're in need of guidance, schedule a consultation to see how DoctorsManagement can collaborate with you to build sustainable, optimal business outcomes.

Source: DoctorsManagement

Auditing

CMS Report Highlights Complaints and Enforcement Actions Under the No Surprises Act

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Enterprise-Based Denial Management: A Comprehensive Approach

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Auditing Surgical Services

Auditing

California Made Capitation Payments for Enrollees Who Were Concurrently Enrolled in a Medicaid Managed Care Program in Another State

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Auditing the Global Package:When auditing provider services, what is the best method to approach the concept of a global package? Some rental companies provide a renter with all-inclusive pricing for an apartment. The payment arrangement covers heating, electricity, water, and garbage for the one-bedroom apartment.

Auditing

Modernizing Auditing and Compliance in Healthcare:The Importance of Auditing - Regular auditing of medical charts and coding documentation is indispensable for identifying errors, ensuring regulatory compliance, and reducing the risk of fraud. Audits not only uncover coding inaccuracies but also offer valuable insights into areas for improvement within the organization's processes and procedures.

Auditing

Monthly Spotlight on Fraud, Waste, and Abuse:The following cases highlight fraud, waste, and abuse (FWA) and serve as a reminder to uphold high ethical standards when providing patient care and services.

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HHS Modifies Rule for Confidentiality of Substance Use Disorder Records - HHS Issues Final Rule:On February 8, 2024, the Department of Health and Human Services (HHS) announced that it had approved the modification of rules regarding the confidentiality of patient Substance Use Disorder (SUD) records. After careful consideration of public comments, the HHS determined that approval of the Final Rule would improve coordination of care, and, ultimately, the quality of patient care.

Auditing

AI Auditing: Walking Backward Toward Home:Way back in 1976, as an elementary school kid in the suburbs of Philadelphia, I came across a book in the library called 2010: Living in the Future. In my then-current world of AMC Pacers and seersucker suits, the book promised great things.

Auditing

The Audit Process :I hold a LinkedIn Live broadcast called Health Care Happenings that also airs on Facebook and YouTube every other Thursday, in which I discuss different healthcare topics. I recently did a three-part series on auditing: Preparing for the Audit, Performing the Audit, and Providing the Audit Results. This article will expand on that series to discuss the audit process.

Auditing

Maximize Duplex Doppler Ultrasound Documentation and Reimbursement:Complete documentation of any radiology procedure is the key to appropriate reimbursement. This is especially true for venous duplex Doppler ultrasound exams, where including fewer than the required number of elements for a complete procedure will result in reimbursement for a limited study.

Auditing

Monthly Spotlight on Fraud, Waste, and Abuse - August 2023:The following cases highlight fraud, waste, and abuse (FWA) and serve as a reminder to uphold high ethical standards when providing patient care and services.

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If Conduct Appears to Buck the Legal Norm, Chances Are That It Does:It's akin to wearing Doc Martens to a professional cocktail party reception or Uggs to court. In other words, the wardrobe choice jumps out as not being appropriate for the situation. Likewise, certain conduct that violates the Anti-Kickback Statute (AKS) and the False Claims Act (FCA) unequivocally jumps out as being unlawful under the facts and circumstances, yet persons engage in the inappropriate behavior.

Auditing

As CMS Focuses on Quality, There Are Monumental Changes to Reimbursement for Quality on the Horizon!:The Centers for Medicare and Medicaid Services (CMS) utilizes risk adjustment factors to estimate the cost of Medicare Advantage (MA) beneficiaries and those associated costs of providing care. Risk adjustment factor scores govern the amount paid by the health plan during the year for the beneficiary's care.

Auditing

Choosing the Right Tool: Targeted vs. Random E/M Audits:The realm of E/M (evaluation and management) auditing is vast, and 2023 will bring more work here than before thanks to CPT's extensive revisions to its E/M guidelines for inpatient, facility, and home visit services - now in effect. Both compliance professionals and providers must always keep in mind that E/M services (which account for a third of annual Medicare Part spending) will go from being a perennial easy target to an urgent area of attention in 2023.

Auditing

Who Can It Be Knocking at Your Door? Are You Prepared? :The truth is, you can never be fully prepared when a Special Investigative Unit (SIU) from Medicare or Medicaid shows up unannounced.

Auditing

Self-Audits:Self-audits are critical. They demonstrate compliance, or at least a "good-faith effort" to be compliant; they minimize refunds of overpayments to "actuals" and also mitigate the potential for a multiple being added.

Auditing

Provider Education: The Most Important Step of the Audit Process:You've taken the time to complete a painstaking audit of a provider, combing through their documentation on an EHR or maybe even navigating through a handful of handwritten notes.

Auditing

Modifier 25 Pre-Bill Review: Were You Ready?:After all the hype surrounding the upcoming Cigna policy regarding modifier 25 and pre-bill reviews, it seems as if Cigna is not planning on implementing the policy as planned on August 14, 2022.

Auditing

Navigating the UPIC Investigation from a Compliance Consultant's Perspective:Over the past year and a half, I have seen a significant increase in the volume of Unified Program Integrity Contractor (UPIC) investigations taking place in private physician practices.

Auditing

Culture in Compliance:For years, we have talked about the culture in healthcare, especially for compliance purposes, but for many practices, that culture takes a backseat despite continued guidance.

Auditing

2022 Annual Audit Elements: What Should Be Reviewed:Four months into 2022 and the question is: How far along is your audit of high, medium, and low-risk services? If you are like most practices or health systems, something always gets in the way and causes audits to take a back seat.

Auditing

Should Your 2022 Audit Plan Include Paid Claims?:In 2022, when we sit down to configure an audit plan, we often consider whether we will perform an audit retrospectively or prospectively, and whether the sample will include evaluation and management (E&M) services, procedures, or some combination of them both.

Auditing

Don't Sleep On Small Claims Denials:Are you ever tempted to just sweep those small claims denials under the rug? Do you sometimes wonder if it is worth the time and effort to figure out why a code, which will end up yielding $30, is being denied? Does it feel like it takes years to understand a denial and find a solution - leaving you to question if you really know what you are doing? I've had many of those moments.

Auditing

Auditing Infusions, Hydrations, and Injections:If your facility and/or practice is providing infusion, hydration, and injection services, they should be included in your annual compliance auditing plans to ensure proper coding guidelines are being followed and documentation education is not necessary to assist with any loss of revenue gaps.

Auditing

Ciox: Not a Bleach, But Not to Be Ignored:In my role as a compliance consultant specializing in carrier audit response, a lot of items are brought to my attention on a daily basis, with the bearer of said items asking questions

Auditing

Acute Uncomplicated vs Complicated Illness or Injury:When selecting Number and Complexity of Problems Addressed, the complication of treatment required should not be considered. The Risk of Complications of Patient Management is where the treatment options are considered in code selection.

Auditing

Getting Serious About Compliance:By now, most health systems, practices, and providers should know that the Office of Inspector General (OIG) has been stressing the importance of creating and abiding by a compliance plan since the passage of the patient Protection and Affordable Care Act in 2010.

Auditing

As Pandemic Eases, OIG Ramps Up Audits:With Americans having widespread access to effective vaccines, the COVID-19 pandemic is finally fading into the background for most practices, but the issue of compliance is once again rearing its multi-faceted head.

Auditing

HHS/OIG Exclusion List Violations:An important subject that should not be far from your mind is the OIG exclusions list. The HHS/OIG is not backing down on Employment of Excluded Individuals.

Auditing

OIG Plans for Onslaught of Risk Adjustment Audits Claiming 9.5% Error Rate in Code Assignment:According to an Office of The Inspector General Report, the Centers for Medicare & Medicaid Services (CMS) estimate that 9.5% of all payments to Medicare Advantage organizations are improper due to unsupported diagnoses submitted by the organizations themselves.

Auditing

Auditing for Success: Part V of the Back to Basics Series:If the words "medical record audit" conjure up images of high anxiety and pounding headaches, this Back to Basics article is especially for you. For some managers, having their medical records audited is a high stress event.

Auditing

TPE Audit Program Resumption:On Thursday August 12, CMS put providers on notice that the TPE audit program was kicking off again after more than a year hiatus due to the public health emergency (PHE)! As you can imagine, there is some chatter about when and what to expect once the letters start going out.

Auditing

The Year of the Audit: Stand Your Ground with Payers:Over the years I have worked with so many wonderful and talented auditors and professionals at Blue Cross Blue Shield payers, UHC, Aetna, CIGNA, Humana, Medicare carriers, etc.

Auditing

2021 E and M Changes - Diagnoses in the MDM :

The year 2021 will bring significant changes to how we determine the level of evaluation and management services in the outpatient setting.

Auditing

It is My Organization: I Can Do What I Want:The age-old question of Can we offer cash-pay discounts, professional courtesy and/or the waiver of co-payments or deductibles continues to be as relevant today as it was 2-decades ago.

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Avoiding a Compliance Nightmare in 2020:I've never been a huge fan of horror films and not because of the blood and guts but simply because of the bad choices the victims always seem to make;

Auditing

OIG Compliance 101 - Ensuring the Next Generation is Prepared:

Each day our industry gains new members who are eager to learn and make a difference in the organizations in which they work.

Auditing

EM Changes for 2021 Help is Out There:the hardest part of our job going forward will be in shaping documentation of assessments

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Why is HIPAA So Important:Some may think that what they do to protect patient information may be a bit extreme.

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Medical Necessity and The False Claims Act:With so many things to consider regarding why compliance needs to be established

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Auditing for Reimbursement:

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Auditing

Joint Commission and the Value of Accreditation:Around the world accreditation is used to assure a high baseline level of healthcare quality. In the United States, accreditation is a multi-million-dollar industry without any sign of slowing down because it's compulsory for federal payments and a marketing necessity in an increasingly competitive landscape.

Auditing

New DOJ Guidance on Evaluating Corporate Compliance Programs:The DOJ's guidance document sets forth topics and questions to address three fundamental questions that prosecutors ask when evaluating compliance programs to guide its investigation:

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You CAN Charge Medicare More Than You Charge Some Patients:there is no governmental requirement that a clinic have a uniform charge for all payers

Auditing

But All My Friends are Doing it:Just because friends or colleagues are doing something doesn't mean it's the right

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Lost in a Pile of Numbers Are Your Doctors Who They Say They Are:one of my primary projects is predicting the likelihood that a particular provider may be audited

Auditing

OIG Compliance 101 - Ensuring the Next Generation is Prepared:Each day our industry gains new members who are eager to learn and make a difference in the organizations in which they work.

Auditing

Anthem is Changing their Timely Filing Requirements for All Plans Including Medicare Advantage:Anthem has been very busy sending out notices

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What about Midnight Billing for Time Across Calendar Days:the calendar day is defined as lasting from midnight to midnight

Auditing

Extrapolation Policies Apply to RADV Audits:Risk Adjustment is a program that was implemented to identify and support Medicare

Auditing

What to Look for When Auditing Smoking Cessation Services:These services are unlikely to create a financial windfall

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Small Breaches Can Be Subject to Large Penalties :We may have heard about the large fines issued by the Office for Civil Rights

Auditing

HIPAA Changed Again Are You Compliant:The most common violations that providers encounter will occur under Tier One or Tier Two.

Auditing

Conducting a Fraud Investigation Part 1 Taking a Common Sense Approach:I thought I would create a post that would really ensure understanding

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Auditing Hospitalist Services:The inpatient side of coding and auditing can be enormously complex

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I Know What We’re Doing is Wrong I Need My Paycheck:Knowingly submitting false statements or making misrepresentations of fact to obtain a federal health care payment

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An Update on the DHS OIG's Effort to Combat Fraud & Abuse:The fall edition of the Semiannual Report to Congress covers OIG activities

Auditing

Understanding Prepayment Audit Reviews:Being placed on prepayment audit review is extremely frustrating for a physician

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What Do You Need to Know About Contact from a Federal Agent:Here are some basic principles everyone should know

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The Myth about Pass Fail Rates for Providers:leadership wants a general idea of what their compliance risk looks like

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The Importance of Being Earnest Why HIPAA and HITECH Compliance Matters:What's significant is the underlying violations of the Security Rule

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Auditing Ophthalmology and Optometry Exams:Having this knowledge in your pocket allows you to have a great opening discussion

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Auditing Chiropractic Services:Chiropractic is unique among healthcare specialties

Auditing

Overview of AMAs E&M Revisions for 2021:The AMA is allowing comments for reconsideration until midnight Central Standard Time on Monday

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Prolonged Services :I find in my own audit reviews that the prolonged service code set is often mistreated

Auditing

Voluntary Repayments:cShould you volunteer to repay money from Medicare or other federal healthcare programs

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How to Correctly Unbundle NCCI Code Pair Edits:An NCCI code pair consists of two codes representing procedures

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How to be an Effective Compliance Officer:Being a Compliance Officer can often feel like a thankless job

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Revenue Cycle Management Considerations for Auditors:By analyzing key elements and reviewing applicable guidelines

Auditing

Attestations Teaching Physicians vs Split Shared Visits:The only difficulty will be trying to find out if your commercial payers decide to follow CMS

Auditing

Medical Necessity vs Documentation for Inpatient Services :Many of the notes we are provided for review include so much information

Auditing

Medical Student Documentation CMS Relaxing of the Rules:Medicare Claims Processing Manual to allow the teaching physician

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What is Virtual Communication G0071:This visit descriptor is Virtual Communication and is not indicated as a telehealth service

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Auditing looking between the lines:When given the task of auditing a group of charts

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Billing 99211 Its not a freebie:It seems like a simple code to bill

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Using a Billing Company versus Hiring a Biller When Starting a Medical Practice:The option I do not recommend is the option that requires hiring a biller.

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We've Always Done It This Way and Other Challenges in Education:This is one sentiment that we all have had at one time

Auditing

Prolonged Services Its Not Just About Time:One way of looking at this is to take note of the threshold times

Auditing

When to Use Modifier 25 and Modifier 57 on Physician Claims:it is important to know the distinctions between these two modifiers.

Auditing

The Potential Impacts of a Flat Rate EM Reimbursement on our Industry:Proposed Reimbursement Model Change

Auditing

Getting the Right Eligibility Information for Payment Your Rights and Health Plans Requirement:We need timely and accurate patient information to bill health plans and receive appropriate payment.

Auditing

When Medical Necessity and Medical Decision Making Don't Match:Determining Medical Necessity

Auditing

Ensure Personal Quality An Auditor's Approach to Research:We often associate research with a large amount of time

Auditing

The Importance of Policies:With a growing awareness of just how many organizations do not have published policies

Auditing

Auditing Incident to Services:Incident to billing offers two key benefits

Auditing

Provider-Based Facilities and Split Billing Is Your Facility Being Reimbursed for All Work Performed?:Are you stumped by billing guidelines for provider based facilities

Auditing

Auditing Therapy Evaluation Codes Not So Quick:New evaluation codes for physical therapy

Auditing

TKAs to Outpatient What We Have Learned with Q1:The release of the 2018 Final Rule for the Outpatient Prospective Payment System

Auditing

The Devil is in the Data Details:As an auditor who has reviewed thousands and thousands of encounter documents for level of service

Auditing

Critical Care Documentation:Critical care documentation should showcritical need for the patient AND immediate action by the provider.

Auditing

The Comprehensive Error Rate Testing Program:With nearly a million physicians in this country, how do auditing organizations determine whom to audit

Auditing

Is Your Practice in Need of a Wellness Visit?:Is your practice busier than ever

Auditing

Chiropractic Audits by Medicare Are Increasing:Despite the fact that only three treatment services are covered by Medicare

Auditing

PFSH Documentation: Q and A:Included with a NAMAS membership is the ability for members to submit their auditing questions to our auditing team for input.