Healthcare Insurance Audit Process

Claim audits take place frequently, with the healthcare insurance company informing the healthcare institution of its intent to perform an audit. If you haven’t been audited yet, be aware that it will happen sooner or later. This guide to the healthcare insurance audit process provides an overview to help you prepare for an audit.

The Timing and Nature of Audits

Once a healthcare provider has an established relationship with healthcare insurance company (HIC) and they have shared financial transactions taking place, it is just a matter of time before the HIC announces an audit. For example, a hospital is audited by a health insurance provider that pays out claims to the former.

All that is needed for an audit to take place is for the HIC, Medicaid, or Medicare to issue the hospital with a letter of intent. Thereafter, the HIC will request the paperwork or transactions it wants to view. The hospital is not in a position to refuse an audit.

An audit is done by either the HIC, Medicaid, or Medicare or a third party who has been contracted to conduct it.

What Auditors Assess

What is a medical claim audit? Auditors look for fraudulent transactions or inaccuracies. They use the institution’s policy and procedure information to follow what has been done. Auditors also find overpayments and underpayments that must be reconciled.

Some health institutions feel threatened by an audit. They fear that the HIC’s aim is to reverse overpayments. While this is the case, the HICs also check for underpayments and monies that they must return to the hospital.

Additional Documents Request

An HIC, Medicaid, or Medicare will submit a formal request to the medical institution for additional documents. This is known as an Additional Documents Request (ADR). The ADR specifies the particular transaction data and for what claims this must be provided. The audit proceeds rapidly from this point.

As an institution in receipt of an ADR, you should contact your health information management (HIM) department to collect the required information. This must include file details, such as notes made by the doctor on the file. These will all be scrutinized for errors and wrong payment amounts.

Before giving the documentation through to the auditor(s), you should check that the full list specified by the HIC, Medicaid, or Medicare has been collected by your HIM department.

Note that there will be a deadline for submitting documentation. Failure to comply could mean a loss of repayments in your favor.

After an Audit

The HIC, Medicaid, or Medicare provider that initiated the audit will respond with the results in a formal letter. If no problems were found, the audit is considered completed. If you owe the provider money, or vice versa, you will receive this amount or a request to pay via a letter. You have the option to appeal against the findings of the audit. Again, specific documents, pertinent to the appeal query, must be provided, audited, and responded to.

It is important to take stock of discrepancies that were picked up by the audit. This will help the institution to avoid these errors in future and provide information for dealing with cases of fraud.