The Importance of Auditing and Monitoring

One of the elements of an effective compliance program is Internal Auditing and Monitoring…but how does this translate into your practice or health care system?  The OIG states, “An ongoing evaluation process is critical to a successful compliance program” and be thorough with regular reporting to senior officials, including the Board.

When developing your Auditing and Monitoring plan, first you must ensure those involved in the process understand the difference between what constitutes auditing and what constitutes monitoring:

• Auditing:  A formal, systematic approach to evaluate and improve the effectiveness of processes and related controls.  Audits measure current practices against a defined standard, and should be independent and objective, performed by someone who has no vested interest in the outcomes or business area being reviewed.  Audits involve planning, sampling, testing and validating, and can be retrospective or concurrent. Formal communication of results to leadership and the Board must occur, with recommendations and corrective audit measures.
• Monitoring:  An on-going process to ensure processes are working as intended.  Monitoring is often less structured than auditing, but can be an effective way to detect potential errors and the need for an audit.  Monitoring is often conducted by department staff, with results communicated to department managers, and can encompass spot checks, day to day reviews, or weekly/monthly tests.

Annual Risk Assessments play an important role in the development of an Auditing and Monitoring plan by identifying and categorizing risk areas relevant to your organization.  Risk levels (low, medium, high) should be assigned giving consideration to the probability and impact of each risk area to prioritize audits, and establish monitoring processes.

Having a robust Auditing and Monitoring program enables organizations to identify areas for improvement, changes in processes, need for policy change, effectiveness of corrective actions, and promote the mitigation of risk.  And one misconception in the healthcare arena is that auditing and monitoring should revolve primarily around billing operations – this is not so. An effective Auditing and Monitoring plan should also focus on compliance and risk areas related to, for example, HIPAA Privacy and Security, Conflict of Interest, Provider Relationships, Contract Management, and Business/Financial relationships with referral sources.