Just like other industries, hospitals also have auditing needs that need to be met effectively for better operations. However, unlike other businesses, healthcare facilities have additional auditing needs apart from the traditional financial audits. Regular auditing is essential for healthcare facilities as it ensures that they are going forwards in the right direction and are complying with all the regulations.
There are numerous kinds of audits required by healthcare institutions to ensure good financial health in the long run. For this purpose, hospitals and other healthcare facilities need to engage a third-party auditor or outsource accounting services to review medical billing and recording processes. Therefore, healthcare institutions require an auditing strategy in place.
Why Healthcare Institutions Require Regular Auditing?
Healthcare institutions, just like any other business, deal with finances and money; that is why it needs to be audited regularly to ensure proper operations. Hospitals must hire top audit firms in Dubai and get quarterly or annual audit in order to review the billing transactions and documentation processes. These third-party auditors will help organizations to identify high-risk areas, inefficiencies in the workflow, and weak areas that need improvement.
Healthcare institutions, including small, private hospitals, should conduct audits with the help of a third-party auditing company to ensure compliance and catch inefficiencies and high-risk areas. Some of the areas auditings can help hospitals include insurance contracts, payroll, medical billing, utilities, medical equipment, medicine, etc. A regular audit will ensure good internal controls and mitigate the risks in an appropriate and timely fashion to avoid any disasters.
Types of Audit for Healthcare Institutions
There are 5 common types of audits for healthcare institutions, including hospitals.
1. Random Audit
In a random audit, the auditor takes a few samples in an unsystematic way. These include any cases or transactions with a large sum of money. In a random audit, the auditor focuses on the amount of money received and spent on different hospital cases and medical equipment. A random audit will give the auditors a glimpse of the organization structure and how it works. The results of a random audit will determine if the institution needs a thorough audit or not.
2. Comprehensive Audit
Unlike a random audit, a comprehensive audit doesn’t take a few financial transactions but takes a closer look at all the accounts. Comprehensive audits take a closer look at the accounts and transactions, either manually or electronically. Most healthcare institutions opt for this approach as it gives more details into each transaction as compared to the random audits.
3. Hybrid Audit
The hybrid audit is a mix of the approaches mentioned above; random and comprehensive audits. This type of audit uses both techniques, i.e., it takes some random samples and conducts a comprehensive audit for other areas. This audit is more accurate in terms of providing statistics and information regarding individual cases. Data gathered from a hybrid audit can be used in the future to compensate for money spend on cases for no reason.
4. Diagnosis Related Group (DGR) Audits
Diagnostics Related Group Audit makes sure that all cases at the hospital are appropriately coded and sequenced for a better system. It also ensures that all the billing information matches the claims and patient records. A DGR audit is a necessity for healthcare systems as it not only organizes the record system of the institution as it ensures all the data recorded is correct. A DGR audit removes any room for fraudulent activity.
5. Quality Improvement Audit
The end result of an audit is to improve the overall quality of the services at the healthcare facilities and improve the efficiency of the institution. Quality improvement audit focuses and identifies areas that need improvement in an institution to decrease the overall financial costs. This way, hospitals will be able to provide their patients with top-quality health treatment with less money spent on treatment.
Quality improvement audit focuses on optimizing the quality of services for both the patients and the healthcare institution. It is essential for hospitals as it provides an insight into each process and its quality. So, if you want to optimize your healthcare institution, consider approaching top audit firms for a quality improvement audit.
Protect Your Hospital from Fraud
Just like other organizations, hospitals require regular audits to manage finances and ensure there is no fraudulent activity taking place inside the organization. An audit helps hospitals and healthcare facilities in figuring out issues and fixing the root cause of the problem, which is crucial for institution’s long-term financial health. It also provides the administrators with information that helps ensure the business staff is working in the right direction, and the management is making the right decision when it comes to business growth. Instead of getting surprised by potential issues and risks, it is better to conduct an audit and be prepared for any adverse situation that may threaten the organization.