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Healthcare inspections are a crucial part of your medical or health-related business. You must see that you abide by the laws your state implements.
Doing so would assure patient safety; these comprehensive audits are sometimes required to retain your medical license.
These inspections are usually annual or semi-annual, depending on the country or state.
You might think that repetitive healthcare audits can be tedious and bothersome, but there is much more.
What is the purpose?
The primary purpose is to provide feedback on how well an organization performs compared to its peers or competitors, government regulations, or industry standards.
Thus, an audit is an evaluation process designed to determine whether or not an organization or individual meets specific criteria or standards.
Third parties often conduct these.
Healthcare audits are an essential component of the continued improvement of healthcare institutions. It ensures that your facility complies with all federal, state, and local regulations.
In addition, conducting an audit will help you identify areas, examine systems and processes, and make changes that will improve patient care and help lower costs.
What are the two types of healthcare audits?
There are two types of healthcare audits: internal and external.
An internal audit is conducted within your facility by your staff. The results are used to assess the quality of care provided at the facility.
An outside entity such as Medicare or Medicaid conducts these external audits. Then they use the results to assess whether your facility meets its standards for quality care.
Let’s go into the details of each type of audit below.
Internal auditing in healthcare
Internal auditing in healthcare is evaluating, monitoring, and improving a healthcare organization’s performance in critical areas such as financial management, compliance with regulations, and patient safety.
Internal auditors are accountable for conducting internal audits to assess the effectiveness of their organization’s risk management processes and controls.
They help ensure that the organization meets regulatory requirements and is compliant with laws and regulations.
An internal auditor or a third party can perform internal auditing.
Internal auditors may also perform external audits, which are examinations of a company’s financial statements or other information to determine whether they conform to accounting rules and guidelines.
You can also choose to work with an internal audit firm for hospitals.
External auditing in healthcare
The goal of external auditing is to help make sure that each facility is up-to-date on its training, policies, and procedures.
Thus, external auditing in healthcare is a way to ensure that all of your facilities, equipment, and staff are complying with state and federal regulations. It’s also a way to ensure that you’re providing safe, quality patient care.
This will help ensure that all employees follow the same patient care and safety guidelines.
Hospitals, health insurance companies, accrediting bodies, or government agencies may hire external healthcare auditors to carry out this process.
Some examples include:
HIPAA Compliance Audits
Healthcare organizations must demonstrate consent with the Health Insurance Portability and Accountability Act Privacy Rule, Security Rule, and Breach Notification Rule.
Independent auditors conduct these audits to evaluate the organization’s documentation for satisfying HIPAA requirements.
Government healthcare audits.
Government healthcare audits are one example of an external audit.
The government conducts this because it wants to ensure that all facilities under its jurisdiction provide high-quality care at an affordable price.
In addition, the government wants to ensure that all facilities follow the rules state and federal agencies set forth.
Listed below are two of the most common healthcare audits done by the government.
Medicare
Medicare Compliance Audits can be uncomfortable and disruptive. But, they are necessary to ensure that providers follow federal guidelines and provide quality care to the patients who count on them.
Medicare compliance audits fall into two categories: program coverage audits and financial audits.
Program coverage audits focus on whether or not a patient is eligible for Medicare benefits. In contrast, financial audits look at whether or not a provider submitted claims by Medicare rules.
Both audits can result in fines or penalties if the audited party is guilty of violating federal regulations.
Medicare uses unannounced site visits to determine whether beneficiaries receive appropriate care at participating hospitals and other facilities.
Medicare also conducts annual financial reviews to ensure that hospitals are billing appropriately for services rendered to Medicare Part A and B beneficiaries.
Medicaid
State Medicaid agencies conduct them to ensure that the healthcare facilities, providers, and individuals receiving Medicaid payments comply with the program’s rules.
Medicaid is a joint federal-state program that gives health coverage to nearly 60 million low-income or disabled Americans annually.
The federal and state governments share the costs of Medicaid coverage, with each state getting specific funding from Washington, D.C.
The purpose of compliance audits is to ensure that participating hospitals, doctors, and other medical professionals follow all the rules set by their respective states’ Medicaid programs.
Third-party entities can conduct these audits on inpatient and outpatient services provided by hospitals and physicians and home health care services provided by non-physician practitioners such as physical therapists or registered nurses.
Some states also have specific compliance requirements for nursing homes and assisted living facilities providing long-term care services like hospice care.
Commercial insurance healthcare audits
This type of audit is performed by an insurer, such as Blue Cross Blue Shield, Aetna, or Cigna, to ensure that patients receive quality care at an affordable price.
The goal is to ensure that claims are accurate and patients can use the right provider network.
For example, if a patient has a specific type of procedure done in-network, but the provider is out-of-network, their claim could be denied or reimbursed at a lower rate due to lack of coverage or insufficient documentation.
Insurance companies also perform this type of audit to ensure that providers perform their jobs accurately and safely so they can continue to receive business from those providers in the future.
Commercial insurance companies typically issue these audits about every two years.
What’s the difference between healthcare audits vs. claims denials
Healthcare audits are a common occurrence in the healthcare industry. They can occur due to the following:
- a denied claim
- it’s part of an internal audit process
Claims denials
When a claim has been denied, your health insurance company does not have to settle for the services you received.
In this case, you will be notified by mail that your claim has been denied and why. This is usually due to improper billing or coding on your part.
Internal audits
An internal audit is when an insurance company reviews its records to check for errors or inconsistencies. It could also be due to an external audit conducted by the state or federal government or another regulatory body.
They may review your medical records during this process as well.
You may get a letter notifying you that your medical claims were audited and asking you to contact them so they can discuss any discrepancies in your claims history or documentation.
How do hospitals handle healthcare audits?
Hospitals handle healthcare audits differently, depending on their size and resources.
Some larger hospitals hire outside companies to perform the audits, whereas smaller facilities may do them in-house.
The first thing that happens when a hospital is audited is that someone looks at all their records and paperwork.
And they do it thoroughly. This is more than just going through your files quickly to ensure everything looks okay on paper.
The auditor will look at everything from records of medication disbursement to medical charts and patient files to payroll documentation.
It can take weeks or months for an external audit to complete its investigation, depending on how many employees it has access to interview and how many computers it needs to check out for evidence of data tampering or other irregularities.
Regardless of how they’re handled, every hospital should be aware of the benefits and disadvantages of both approaches and consider which method might work best within their organization before deciding how to proceed.
What are the tools used during an audit?
Aside from checking the files and documents, there are several tools auditors can use during an audit, such as:
Patient satisfaction surveys
These surveys allow patients to voice their opinions about the services they receive at your facility.
It’s essential to keep in mind that these surveys should be anonymous so that patients feel comfortable giving honest answers.
Patient satisfaction surveys can help you identify areas of improvement in your practice and make changes accordingly.
Focus groups
Focus groups are another great way to learn about patient experiences and needs.
In addition, they can help identify the most critical concerns among your patient population so that you know how best to address them moving forward.
Focus groups are also helpful when developing new policies, procedures, or protocols for your practice.
Compliance testing
Compliance testing refers to testing for compliance with laws and regulations related to healthcare facilities such as HIPAA (Health Insurance Portability & Accountability Act) or OSHA (Occupational Safety & Health Administration).
These tests can be administered by external auditors or internal staff members trained in compliance testing procedures.
Final Thoughts
Suppose you ever find yourself working in a hospital or other healthcare facility. In that case, it is essential to know the types of healthcare audits your facility is likely subject to and why these are necessary.
By knowing what type of audit you are preparing for, you can best prepare and implement a successful medication management program.
