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10 Reasons You Should Consider External Audits

Medical practices must decide whether their audit needs will be served better using internal staff or by looking to a consultant. To help you decide which method will meet your needs, consider the following 10 reasons for choosing an outside auditor.


1. Help in determining the scope and depth of the audit. Chart audits may be conducted in several ways. An experienced external auditor will be able to assist you in determining what you need to review. The scope could be broad-based if you want a "general check up," or more focused if you want to know more about a specific service, or if a payer or governmental agency has made a specific inquiry. Your auditor also should be able to help you decide whether to conduct a prospective or retrospective review.


2. Objectivity. Medical auditors employed by an external agency inherently provide an objective point of view. Audit decisions are not influenced by intimate knowledge of the practice. An external auditor objectively examines the data with an eye toward discovering weaknesses that potentially could lead to allegations of wrong-doing, or to a loss of appropriate revenue. The OIG requires practices operating under a Corporate Integrity Agreement (CIA) to engage an independent review organization to conduct required follow up audits.


3. Independence is perceived as 'honest'. One presumes that employed staff is honest, but in-house staff members are not always in the best position to discover errors, or to bring them to light. Internal staff may be limited to information supplied only by the practice, or may have a vested interest in protecting decisions they have made. Exclusive use of employed staff to review medical records may give rise to the impression of "the fox guarding the henhouse." The external auditor is better positioned to tell you what you need to know, even if it means a change in current procedure.


4. Expertise and resources. Choosing an outside auditor should ensure a skill set specific for the task of auditing. While coding, billing and other associated activities are foundational for any auditing function, they are not the same. Medical practice auditors should be well-grounded and knowledgeable regarding industry-wide issues. Practices choosing to use employed staff to perform chart audits may find that the "home grown" auditor's perspective may be too narrow to identify problem areas.


Those with the job title of "auditor" are expected to be informed fully, and are much more likely to have the necessary resources on hand than an individual medical practice. Most auditors will have access to comparative utilization data, and will have knowledge of government and industry trends and "hot spots." In addition to access to industry resources, the external auditor's dedicated study of the ever-changing regulatory landscape equips him or her to do the job more fully than is possible for office staff with many other duties and responsibilities.


5. Time. An outside auditor's time will be focused on the task at hand; conducting the review, analyzing the data and producing a report. They are not likely to be distracted by the everyday business of running your practice. Using an outside individual will allow your staff to attend to their regular duties, thereby reducing potential interruption in the revenue cycle or reduction in the quality of customer service.


6. Focus. Just as the auditor's time is focused, so will be his or her thought process. An outside auditor will apply a broad knowledge base to the specifics of your practice. Although internal staff may have the best intentions when conducting an audit, ordinary day-to-day activities of running the practice may cause the audit to be delayed, interrupted or even abandoned.


7. Staff can perform regular tasks. Using an outside auditor allows staff to continue in their normal business activities, thus protecting the practice from financial loss resulting from an interruption of normal business activities.


8. Results provided. Your external auditor should present findings in a way that is easy to understand, relevant and meaningful to practice administration. An external auditor will be focused on bringing findings to your attention and may be better positioned to command the appropriate level of attention than an employed staff person.


9. Recommendations. An external auditor will be able to make recommendations for improvement and change that have been tested previously in similar practice environments. He/she can steer you away from ideas that may seem to be a solution, but that have been tried elsewhere and proved unsuccessful. Their prior experience may save you hours of work.


10. Assistance with implementation of new ideas, processes, policies. Most external auditing organizations will have staff available to assist you in the implementation of new processes and policies developed to strengthen any areas of weakness exposed in the audit. Additionally, they will have the resources available to test the implementation by way of a follow up audit.


In today's environment, every medical practice, regardless of size, should be considering a chart audit to ensure both successful charge capture as well as regulatory compliance. Consider the above ten reasons to assess your auditing needs. An investment in outside expertise could reap substantial financial results, as well as peace of mind.


Thank you to AAPC Physician Services for providing this column. Learn more about AAPC.

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