As a medical facility or provider, it’s virtually inevitable that you will receive a third-party payor healthcare audit demand letter. What’s important is that you address the audit as efficiently and effectively as possible. Here are seven steps you should integrate into your healthcare audit management strategy.
Steps to Take When You Are Audited
1. Immediately Address the Audit
While the determination letter you receive may allow you up to 30 days to produce the documentation necessary, many facilities do not have a centralized repository of records. In this case, gathering the needed resources may take longer than anticipated. Acting swiftly will better facilitate deadline compliance.
2. Assemble Documents
Ensure that all applicable documentation is located and packaged appropriately.
3. Conduct an Internal Audit of Records and Claims
Once the proper documentation has been located and packaged, conduct an internal audit of the records. You must ensure that you have all the proper documentation and that the records reflect the proper procedures that were followed. This is your opportunity to flag any mistakes or gather evidence that proper procedures were followed.
If improper care was administered, you have the opportunity to prepare for the financial repercussions of the takeback. If everything was conducted properly, this audit will prepare you for a potential appeals process should the auditor elect to invoke a takeback.
4. Securely Transfer Records
The records auditors will request are related to the medical treatment of patients, and therefore fall under HIPAA regulations, and must be transferred confidentially and securely. It is the healthcare provider’s responsibility to ensure that all regulations are adhered to during this step of the process.
5. Prepare for a Determination Letter
If you conduct a thorough internal audit, you should possess a relative understanding of whether you will receive a determination letter. You may use this time to prepare an appeal case if appropriate. There may be cases where your healthcare audit concludes that your facility was guilty of providing unnecessary care, in which case preparing for an appeal is not necessary or wise. Instead, use this time to prepare for the takeback process.
6. Appeal if Appropriate
If your internal audit determined that all the care your facility staff administered was appropriate and you receive a determination letter requesting a takeback of funds paid, your facility may choose to file an appeal. In cases where you are faced with the opportunity to appeal multiple decisions, it is best practice to prioritize appeals of greater financial bearing. This is not a case of whether either appeal is more valid, it simply benefits you to designate resources towards appeals with greater potential benefits.
7. Consider Corrective Action Processes
If either your internal audit or the external audit reveals inconsistencies within your organization, enact a Corrective Action Process or CAP. This step-by-step process can help you correct systemic flaws that can lead to more takebacks and affect your bottom line.
Healthcare insurance audits are a costly, time-consuming, and overall taxing reality of being a healthcare provider. It is a best practice to take preemptive measures to protect your institution from being put in a vulnerable position. Here are some basic steps you can take to protect yourself:
Steps You Can Take to Prepare for Future Audits
1. Conduct prospective audits
After a taxing health insurance audit, the prospect of investing more resources in the auditing process can be unattractive. However, conducting prospective audits is an effective way to keep your institution ahead of the curve.
2. Institute a centralized repository database
The effort it takes for institutions to locate, group, and verify patient records can be especially burdensome. Instituting a central repository database can alleviate resource strain by grouping data in an organized repository.
3. Prepare to rank audits by appeal importance
All healthcare audits are not created equal. While they may require similar amounts of work while preparing the records and sending them to the auditor, some appeals will have greater financial consequences than others. If your facility has multiple appeal opportunities, it’s important to prioritize cases whose outcome will have the biggest financial repercussions. In some cases, it may make sense to simply bear the cost of a smaller audit, to properly address a larger one.
The final step you can take to prepare for future healthcare insurance audits is to enlist the help of audit automation software. Choosing the right software can empower you with the tools to:
- Improve your auditing and billing compliance
- Ensure revenue and revenue cycle integrity
- Improve your Health Information Management (HIM)
Click here to explore MDaudit’s suite of audit software services.
