Enterprise Auditing: 3 Keys to Selecting an Audit Partner

Posted by Michael DiMarco

CaptureA few months ago I described why the current industry outsourced coding model delivers a sub-optimal result. The conclusion was drawn from many conversations I have had with clients over the past several years.  The perception that short term engagements with multiple outsource vendors can address the ongoing needs of a HIM department is flawed given the underlying realities in the market including a fundamental shortage of coders in the U.S., increasing demand for healthcare services, and reluctance of vendors to invest resources in coder education and development with episodic staffing engagements.

I concluded that a better approach would be to seek a long term outsourcing partner who can guarantee quality and productivity, invest upfront resources in properly onboarding coders, support coders through a coding management infrastructure, and provide better unit economics to providers who make a long term commitment to a vendor.  Providers who take this more strategic and enterprise type approach with outsourcing vendors are more likely to overcome the pending challenges brought on by ICD-10 and be better positioned to address their long term needs.

Another separate but related area within HIM where this approach should gain traction is with third party audits of a providers in-house coders.  As with the traditional staff augmentation model for coders, internal audits and compliance reviews tend to be episodic in nature and lack a consistent cadence.  The opportunity cost of this approach is not only an increased risk of compliance issues but also the uncertainty around whether reimbursement is fully optimized.  Committing to an auditing partner in a strategic engagement will help you design a customized program to meet specific needs, will provide increased clarity on coder and financial performance, and ultimately save you money in the long run given lower costs you can negotiate as part of a longer term partnership.

As you evaluate potential partners in this endeavor there are three key items to focus on to ensure you make the best decision.

1. What level of experience and scale does the vendor have?  You want an auditing team with the highest credentials and experience.  Ask for a roster of their auditors that includes credentials and their tenure.  Does the vendor have the capacity to manage your operation in the long run?  It is important to inquire about their ability to scale to your volume should it increase and where.  By where I mean do you desire IP, OP, ED, or Profee audits and do they have the skill sets that match your needs.

2. Does the vendor leverage technology as part of their audit process?  Auditing can be a very manual and time consuming process.  Vendors who have invested in IT resources to help improve audit productivity and quality are far more able to quickly and accurately identify areas for improvement.  The benefits to you are quicker access to audit findings and greater confidence in the results.

3. Check client references.  As with HIM staffing vendors there is a plethora of “mom and pop” auditing firms who often use 1099 contractors.  These firms are typically focused on a handful of clients. If you are looking to secure the benefits of a long term engagement it is critical that the vendor provide you with 3-5 references of audit clients that are comparable to you and have similar needs.  Be wary of vendors who offer up on one reference.  Performing your due diligence up front will eliminate a potential mismatch and set you up for success.

Has auditing been an area that you feel needs more attention?  What do you think about this more strategic approach to third party auditing?  We’d love to hear from you in the comments.

You can learn more about how we are addressing the need for high-level auditing by learning more about our Enterprise HIM Audit Program or contacting a himagine representative at

Topics: Outsourcing