5 Ways in Which a Healthcare Audit Benefits Your Practice

A healthcare audit, expanding on Merriam Webster’s definition of “audit,” is a methodical examination and review of a healthcare organization. Although a priori rather daunting, in the ever-changing landscape of the healthcare industry, audits are essential. They drive innovation and optimize processes. Ultimately, as a result, revenue, customer satisfaction and the team benefit from audits. Therefore, investing in comprehensive and regular healthcare audit processes leads to sustainable growth.

What Is a Healthcare Audit

A healthcare audit is an in-depth analysis of an organization’s processes, namely revenue cycle management and coding, but it can also include contracts and other industry standards. There are different types of audits, they can be:

  • External. Typically conducted by a third-party auditor to gain insight into an organization’s compliance with external criteria (e.g. accreditation, certification, external peer reviews).
  • Internal. The organization can organize internal reviews via a specialized department or can call a third-party and thus prepare for the external audit.
  • Clinical audits. Clinical audits are conducted to assess the quality of care that the patients receive. It measures a clinical outcome or a process against well-defined standards set on the principles of evidence-based medicine.

Regularly conducting internal audits increases accountability and improves the quality of care.

How Do Auditors Conduct Audits?

Third-party auditors can be small or large size enterprises with teams of industry experts dedicated to offering an impartial evaluation of processes. The objective of which is to provide a realistic diagnostic of the organization and aid in the change management. During the auditing process, these firms have access to the organization’s softwares and records so as to be able to review every piece of information and detect possible weaknesses.

In healthcare, specifically, these weaknesses mean coding issues which may result in grave billing errors and a denial of payment, or even worse, costly penalizations. According to a 2022 analysis of CMS data on claims and appeals, 18% of in-network claims were denied, with some plans reaching as high as 80%. Additionally, other weaknesses include poor revenue cycle management, like systems not aligning with the OIG’s General Compliance Program Guidance. Auditors focus on finding these cracks and help organizations repair them.

👉 Related content: The Importance of Revenue Cycle Auditing in Healthcare

The 5 Benefits of Healthcare Auditing

1) Better Contracts & Communication with Payers

A healthcare audit can include a revision of all the payer contracts to check whether they are up to date and still compliant with potentially new regulations. Payer contracts need revision to ensure that the organization abides by the law and, at the same time, to bring any outdated clause up to date so as to remain competitive. 

2) Improved Team Communication & Morale

According to Hut-Mossel et al (2021), “(7) audits legitimize the provision of feedback to colleagues, which flattens the perceived hierarchy and encourages constructive collaboration.” Against the backdrop of a professional and safe learning environment, healthcare providers give honest feedback to one another. This empowers the staff to be honest and constructive and facilitates self-reflection and acceptance. As a result, this process drives long-term open discussion and fosters an environment of constructive feedback and accountability.

3) Better Coding Practices

 Coding is an art in constant evolution due to the changes it continuously goes through. Coders at healthcare organizations admittedly have a lot on their plate as it is to be on top of the latest changes in the codes. An external healthcare audit provides fresh pairs of eyes who can go over the claims and analyze the coding processes to identify errors in provider documentation, for example, or unintentional fraudulent billing practices.

4) Improved Patient Satisfaction

As a result of healthcare audits, organizations learn where there is room for improvement when it comes to certain resources and therefore increase performance. For example, a finding could be that an extra member of staff should be hired to assist at the front desk and thus reduce patients’ waiting time. Additionally, clinical audits reveal trends among patients, which can lead to evidence-based decisions regarding patient care. Finally, the quality of care of healthcare organizations is measured against pre-set standards, which could be external (national or international entities) or internal, or both.

5) A Healthier Revenue Cycle

During the healthcare audit process, auditors revise all the steps in the revenue cycle:

  • Patient eligibility
  • Copayments and deductibles
  • Billing and claims processing
  • Claims status
  • Credentialing

As with coding, involuntary errors can happen multiple times at any stage during the revenue cycle; consequently, an audit can pinpoint where these are. Revenue cycle analyses carried out are not shared with any other party other than the organization being audited. This information is offered solely for the purposes of streamlining operations and implementing healthy billing practices

👉 Read more: The 5 Steps of Successful Revenue Cycle Management

Why Conduct Healthcare Audits

As stated above, there are multiple benefits to conducting healthcare audits. By establishing periodical audits, organizations streamline processes and foster continuous QI (quality improvement). At the same time, performing audits can lead to preventing multiple issues. Ultimately, by maintaining an optimized practice and preventing issues, alongside with the financial aspect of the audits, healthcare providers save enormous amounts of time and money.

Why Partner with Peregrine Healthcare for Your Next Healthcare Audit

Peregrine’s motto is that time is a healthcare provider’s most valuable asset. In order to offer the best quality services, we have put together a team of experts with diverse backgrounds such as hospitals, health plans, practice management firms, and medical practices and healthcare entities. We are well-versed in working side by side with our clients to bring out the best in them and aid their streamlining processes. This way, we underpin our clients’ journey into sustainable growth and value in the ever changing healthcare industry.

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