The above mentioned situations can happen easily. A small medical clinic is going over the billing statements of the last month. The auditing team of the clinic during the internal audit finds out that the claims of a certain number had been sent without the required modifiers. 

The medical incident due to this tiny mistake has led to the denial of many claims and revenue loss in the clinic to a huge extent. The internal team immediately rectifies the mistake and notifies the staff about the newly updated coding rules. The issue has been fixed owing to the internal audit, and no financial loss has been incurred.

Consider another scenario. The same clinic gets an external auditor after a few months. The external professional observes that the clinic is still working on old documentation templates, which may not meet the federal compliance standards. This point could lead to being fined in the future.

The external auditor directs the clinic very clearly and also helps it in upgrading its processes. The practice revamps its compliance and takes care of its long-term risk with outside help.

These two cases make it clear that there is an important fact. Internal and external medical audits have different yet important functions, and they both work together for the protection of your practice, revenue growth, and compliance of your organization with the healthcare rules.

Many providers in the healthcare sector wonder which one is better. The truthful response is that both medical audit services are useful, and the best method depends on your objectives, your risk level, and your workflow.

The blog discusses the distinctions between internal and external healthcare audits, their respective advantages, and how a partner like Dilijent Systems supports practices in a smooth and effective way in using both methods.

What Is an Internal Medical Audit?

An internal medical audit is essentially a medical review conducted internally at your clinic or healthcare institution. Most likely, this process will be carried out by your staff, namely the billing department, compliance department, and quality assurance division. A few practices may additionally require internal auditors from other branches of their health system.

Internal audits are performed at regular intervals, such as every month, every three months, or every six months. The fundamental motive behind it is to identify the problems at their nascent stage, and so they do not escalate into costly or hazardous ones.

Some of the common areas that are scrutinized during internal audits are:

• Billing and coding accuracy

• Accuracy of medical records

• Documentation quality

• Charge capture

• Claim submission timelines

• Denied claims patterns

• Staff performance and workflow

• Use of correct modifiers and procedure codes

Internal audits are convenient, no pressure and can be easily arranged since they do not involve an external party. Many clinics find them helpful in sustaining their daily operational health.

Internal Medical Billing Audit Benefits

Internal audits are very beneficial for healthcare organizations. They are crucial for everyday operations.

1. Early detection of errors

Internal audits can detect errors before they have an impact on payment or compliance. A case in point is that minor coding errors will be corrected before a lot of claims are sent out wrongly.

2. Better staff training

Internal audits are a means of pinpointing areas where training is needed. If the staff is working with obsolete codes or improper documentation practices, you can quickly rectify the problem.

3. Cost-effective monitoring

Since the review is carried out by your own team, there is no additional cost. Internal audits are one of the least expensive methods to ensure quality.

4. Helps prevent claim denials

Internal audits, by looking for missing information, incorrect modifiers, or incomplete notes, reduce denial rates and improve cash flow.

5. Supports continuous improvement

Internal audits facilitate the monitoring of trends. After staff training, you can assess the impact and make frequent updates to your process.

6. Builds a culture of accuracy

Staff will become more cautious if they know that internal checks are done regularly. As a result, the quality of clinical and billing work will be higher overall.

What Is an External Medical Audit?

An external medical audit is a process where a non-partisan auditor or a certified medical auditing firm conducts a review. The auditors belong to no part of the organization but rather take a neutral and unbiased standpoint.

The services of an external auditor are commonly employed to ensure compliance with regulations like:

• CMS guidelines

• State and federal laws regarding healthcare

• Insurance companies' specific policies

• HIPAA regulations

• Rules of medical necessity

• Correct coding and billing practices

External audits tend to be very meticulous and adhere to the highest standards in the industry. Health care facilities often ask for them every twelve months or whenever they feel that an impartial review is required.

External Medical Audit Compliance Review Advantages

External audits come along with important advantages that internal teams are not able to provide always.

1. Independent and impartial assessment

The outside auditors have no connections to either the staff or the clinic. So they are able to give free, unbiased findings without being subjected to any kind of pressure or influence.

2. Top-notch expertise

External auditors are specially trained professionals and together with their experience of working with many clinics and organizations, they are able to dictate payer policies, new coding changes, fraud risk areas, and compliance standards.

3. Compliance protection that is very strong

External audits have a very strong focus on regulatory compliance. They help you to avoid penalties, fines, and legal risks by early detection of non-compliance practices.

4. Comprehensive documentation review

External auditors examine more deeply than usually the internal audits billings, charts, and coding patterns. This gives them a thorough understanding of the areas of risk.

5. Prepares you for the official inspections.

In case your practice gets a payer audit, RAC review, or government investigation, external audits give you confidence and preparedness.

6. Offers recommendations for improvements

Based on their clinic industry experience, external auditors provide a step-by-step plan that is tailored for you. They specify what needs to be altered and how to fix it.

How Dilijent Systems Supports Both Internal and External Audits

Internal and external audit management is often a daunting task for the healthcare providers. With their complete and simplified medical billing audit solutions, Dilijent Systems provides strong support. 

The company is focused on medical audit services for healthcare providers and assists clinics, hospitals, and independent practices to create audit programs that perfectly fit their requirements. It doesn't matter if you want internal reviews, external compliance audits, or a combination of both; Dilijent systems has the best understanding and guidance for you.

Their internal audit planning includes a range of activities, such as checks of documents, reviews of coding accuracy, continuous claims audits, evaluations of staff performance, and reviews aimed at improving the revenue cycle. These schedules are uncomplicated, realistic, and very easy for the teams to comply with.

In the same manner, their external compliance reviews consist of very thorough chart audits, checks of coding and billing, assessments of compliance specific to the payer, evaluations of risk, reviews of quality of documentation, and detection of fraud.

Later on, Dilijent Systems prepares reports that are easy to understand, gives simple-to-follow recommendations, and provides support for staff training. The alliance of this method has the potential for fostering accuracy, compliance, and confidence among the practices in their operations.

Conclusion

The issue of internal versus external medical audits is not a question of either choosing one or the other. They are both equally effective that support the health, stability, and success of your practice. Internal audits prevent you from making mistakes, streamline the process, and help in the training of your personnel. External audits, on the other hand, provide an independent perspective, a wider compliance protection, and expert advice.

If properly coordinated, they form a robust barrier against all financial-related problems, compliance issues, and poor patient care.

Dilijent Systems ensures that this procedure is easy and hassle-free by providing professionals for medical auditing to the healthcare sector. The company designs specific plans that comprise both internal and external audits, thus assisting the clinics in being compliant, accurate, and financially robust.

Which is better, internal audit or external audit?

External audits tend to be very meticulous and adhere to the highest standards in the industry. Health care facilities often ask for them every twelve months or whenever they feel that an impartial review is required.

How are internal and external audits of healthcare organizations different?

 Internal audits prevent you from making mistakes, streamline the process, and help in the training of your personnel. External audits, on the other hand, provide an independent perspective, a wider compliance protection, and expert advice.

What type of audit is the most common in healthcare?

Internal and external audits are common in healthcare in the USA.