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Preparation of Healthcare Revenue-Cycle Audit

Healthcare Audit Fundamental

Healthcare audits are divided into internal and external audits. These audits are designed to assess, evaluate, and improve the well-being and care of patients in a healthcare facility in a systematic manner. Internal audits are measured within a healthcare organization against benchmarks such as patient satisfaction and financial goals. On the other hand, an external healthcare audit examines hospital processes and finances against benchmarks and laws set by government agencies or commercial insurance companies. Common examples of internal healthcare audits include DRG audits and care and Quality improvement audit.

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  • The DRG audits go through payment integrity reviews to ensure that cases are correctly sequenced and coded and that patient records match billing information.
  • Care and quality improvement audits aim to increase the provision of quality healthcare through enhancing audits for both healthcare providers and healthcare plans. This prevents unnecessary admission into the hospital through enrolment in preventive care programs.
  • Medicare and Medicaid audits are government healthcare audits that are governed by state law and regulate government healthcare reimbursements and claims.

Healthcare Audit Data

  • Under the Health Audit Data, a revenue-cycle audit takes center stage in the healthcare auditing process. The revenue-cycle audit process is the auditing process that begins from the time the patient signs an appointment at the hospital to filing a claim.
  • One of the data required during a revenue-cycle audit is an I.C.D. Code. The I.C.D. code gives a diagnosis code for any form of illness, which aids in processing patient payment through a private insurance company or a government agency.
  • The C.P.T. code is a code that identifies a medical procedure that was performed on a patient and also helps in processing payment.
  • Data on patient complaints, claims, and documentation helps identify areas where revenue is misappropriated and improvement needs to be done in a given health facility.
  • The account receivable report is an important document during a revenue cycle audit.
  • The report has two main components: insurance company payment and patient payment for a healthcare organization.
  • The insurance company payments reports help in processing and confirming claims during revenue cycle audits.
  • Under the patient payment category, the report provides I.C.D. Codes and C.P.T. codes for every patient in different aging groups. These data are vital during a revenue-cycle audit as they substantiate payments.
  • The summary report component in the account receivable report entails a summary of the analyzed report from both the patient and insurance company payment.
  • Benchmarking data is a set of data used to compare performance between a healthcare organization to another or compare with internal data of an organization.
  • These data can be established by identifying the performance measures and goals of the healthcare organization.
  • Data are then collected to measure the performance of an activity.
  • The collected data is analyzed and compared to internal and external data to establish new benchmarking data.
  • Improvement opportunities are identified to establish improved benchmarking data.
  • When setting up benchmark data parameters, the healthcare provider must fully understand their clients and needs. This allows the team to obtain accurate and real-time data.
  • Establishing quality measures and satisfactory scales helps in reducing the margin of error when collecting data.
  • Identifying whether the client’s requirements are met will help redesign better solutions when setting up benchmark data.
  • The gap between customer requirements and quality delivered will result in recommendations for process improvement.

Health Audit Billing Compliance

  • Written policies and procedures involve a clear standard of conduct written to comply with job functions.
  • Compliance professional officers help detect and prevent non-compliance and provide compliance programs and structures in a healthcare facility.
  • Training and education on billing compliance can be attained through attending conferences, professional networking, and reading articles. This allows healthcare personnel to increase competency in monitoring programs and maintaining and validating valuable data.
  • Proper communication is useful in channeling non-compliance reports.
  • Frequently monitoring and auditing compliance programs helps in achieving effective and sustainable compliance programs.
  • Healthcare billing compliance and regulations have greatly reduced billing fraud and abuse of costs hence saving governmental programs and insurance companies billions of dollars.
  • Through healthcare billing compliance, healthcare organizations monitor processes and programs to ensure that everything is captured, improving performance.
  • Internal auditing helps healthcare organizations comply with patient expectations, accurate coding and documentation, and government regulation.
  • Healthcare billing compliance plays a major role in aiding internal and external healthcare audits by identifying non-adherence to changing regulations and regulatory sanctions.


Cascardo, M.A. (2019), Use these preparedness strategies to protect your practice against payer audits and increase revenue; The Journal of Medical Practice Management: MPM, 34(4), pp.216-220.

Finney, S. (2020), Developing an effective compliance strategy, In Information Security in Healthcare: HIMSS Publishing, pp. 195-204.

Moses, R.E. and Jones, D.S. (2019), Health care fraud: developing a basic compliance plan for your practice. Official Journal of the American College of Gastroenterology| ACG, 114(7), pp.1020-1021.

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