How Internal Audit Consulting Helps With Hospital Compliance

Hospitals are a part of the multi-trillion-dollar healthcare industry. Their primary focus is on ensuring patient care and safety. Due to this, a hospital internal audit consulting is crucial.

In general, an audit helps assess the performance of a hospital and other healthcare providers. It ensures compliance and improves fundamental processes in their system. 

What Is Compliance in Healthcare?

It is the process of following rules and regulations on healthcare practices. The most common compliance issues related to the following:

  • Patient safety
  • Billing practices
  • Privacy of patient information 

Healthcare compliance ensures the following:

  • Smooth operations
  • Efficient processes
  • Hospital personnel and employees understand the expectations

The ultimate goal of healthcare compliance is to provide safe and superior services. With periodic auditing, healthcare organizations maintain the quality of care.

Why Is Compliance Important?

Since the healthcare industry is highly regulated, compliance is particularly crucial. Every healthcare organization needs to comply on a corporate level to function effectively.

Everyone must comply and must understand the value of following a system. If a nurse or doctor does not adhere to the rules, they can harm a patient or another coworker.

Healthcare organizations are also held to stringent laws at the federal and state levels. Anyone in the industry who violates is subject to heavy fines, lawsuits, or loss of license.

What Is Hospital Internal Auditing?

An internal audit for hospitals enables a periodic review of compliance efforts. It also helps uncover any blunder before it results in serious issues.

Through an audit, your hospital can document your adherence to compliance. This paperwork is crucial in cases when your hospital faces an investigation. 

Creating an Effective Healthcare Compliance Program

The Office of Inspector General (OIG) helps healthcare providers follow healthcare laws. The OIG does this by providing compliance resources for specific providers.

Among the OIG compliance documents are the Compliance Guidance. These guidance documents provide guidelines for different healthcare industry segments, including:

  • Hospitals
  • Nursing homes
  • Third-party billers
  • Suppliers of medical equipment

Here are some ideas you can use to develop an effective compliance program for your organization:

Formalize practices in your organization.

Create, distribute, and implement written documents for your standards, policies, and procedures. These encourage consistency and boost the quality of care. 

The policies and procedures must include policies about:

  • Privacy
  • Coding
  • Overpayment
  • Conflict of interest
  • Non-retaliation
  • Policies that address regulatory requirements 

Assign a chief compliance officer or a compliance committee.

There are many aspects of healthcare compliance. It is best to have an entity that focuses on ensuring compliance. 

The officer or committee must be in charge of operating and monitoring the compliance program. They should also have the authority to provide suggestions and enforce compliance.

They must also:

  • Ensure that the proper controls are in place.
  • Review how efficient and effective the program is. 
  • Keep up-to-date on changing healthcare laws and regulations.

Provide healthcare compliance training.

Employees must not only have access to your organization’s policies and guidelines. They must also understand the importance of compliance. 

With streamlined training for healthcare compliance, you foster a culture of compliance. Likewise, you help employees understand complex regulations that apply to their work.

Develop effective methods of communication.

Your compliance committee should be one of many observing compliances. Compared to the committee, your employees are in a better position to recognize offenses.

Through training, employees learn how to determine violations. They should also know how to report non-compliance. They must understand there are no punishments for voicing concerns. 

Also, promote transparency in your organization. Create lines of communication that help deal with internal issues and prevent litigation. 

Measure compliance through internal audits.

Regular monitoring is necessary when it comes to healthcare compliance programs. It helps you identify potential issues before they become a problem. 

Send out anonymous surveys to give your employees a way to relay compliance concerns. It enables you to be active in tracking compliance. 

Establish disciplinary actions for non-compliance.

Your compliance program must include disciplinary measures for non-compliance. Convey this along with your transparent policies, procedures, and standards.

Make sure your employees understand the disciplinary guidelines. Make them aware of the value of compliance. Once your employees understand it, it will result in added protection and implementation. 

Devise corrective action plans and provide an immediate response to compliance violations.

When a potential compliance offense occurs, your compliance committee should respond promptly. Your compliance officer must be able to apply the appropriate corrective action as soon as possible. 

Using a proactive response helps ensure better outcomes for your organization. It also strengthens overall compliance while avoiding future occurrences.

The Governing Bodies and Regulations That Oversee HealthCare Compliance

There are different government agencies and federal laws that regulate healthcare compliance:

  • HIPAA and HITECH Act. It protects patient privacy and requires healthcare organizations to put up measures to secure patient records.
  • The Patient Protection and Affordable Care Act. It implements new requirements for insurance, Medicaid, and more.
  • The Social Security Act. It administers funding and requirements for Medicare, Medicaid, CHIP, and more.
  • The False Claims Act. It prohibits filing false claims to get funds from a federal program.
  • The Department of Health and Human Services. It helps protect the office against fraud.
  • The Office of the Inspector General. It also provides protection against fraud.

When to Conduct an Internal Audit

Your hospital should perform an internal audit annually. It will help to assess compliance and to correct problems. 

An internal audit is also critical when there is a possibility of exposure. These include cybersecurity risks as well as federal audits and investigations. 

If your hospital faces a federal audit or investigation, conduct an internal audit. Doing so will help you find out what investigators can likely find. 

Also, you may want to verify the accuracy of the federal audit results, and it will ensure that authorities will not penalize your hospital in error. 

Another basis for conducting an internal audit is when there are complaints. Whether the complaints are from employees or patients, it is necessary to perform an internal audit. 

Internal healthcare audits also help you determine upcoming trends and rising concerns. As a result, your hospital can take action before problems arise.

What Are the Challenges in Healthcare Compliance? 

Hospitals are responsible for protecting their practice. If not, they become prone to security risks, hazards, and loss of income. Below are the top healthcare compliance issues hospitals face today.

Due Diligence Processes

These are processes that protect your hospital and include various evaluations such as:

  • Annual risk assessment
  • Reviews of conflict of interest
  • Exclusion checks
  • Contractual arrangements assessment
  • Vendor review

HIPAA Compliance

The government passed the Health Insurance Portability and Accountability Act (HIPAA) to:

  • Protect the healthcare records of patients.
  • Ensure all medical practices adhere to the correct procedure to safeguard that data.

Hospitals that fall victim to online attacks due to non-compliance with HIPAA may face serious legal consequences. Medical businesses can utilize software to protect themselves against such attacks. One crucial aspect of HIPAA compliance and safeguarding patient data is the utilization of HIPAA forms.

But cyber criminals are getting more sophisticated and will find ways around security software. So, hospitals need to ensure security measures are in place at all times.

Data security

Healthcare organizations have become more susceptible to cyber attacks due to digitization. Healthcare data breaches reached an all-time high in 2021, affecting 45 million individuals.

A cyberattack in the healthcare industry leads to a lower quality of care. It delays access to electronic health data and diagnostic technology. It ultimately results in worse health outcomes.

How Hospital Internal Auditing Can Help

Internal audits for hospitals aim to conduct and supervise audits for compliance involving:

  • HIPAA 
  • Privacy 
  • Cybersecurity compliance and threat assessments
  • Medicare and Medicaid
  • U.S. Department of Labor (DOL) 
  • Tricare 
  • Private health insurance and PBM
  • Prescription drug 
  • Anti-kickback 
  • Telemedicine and medical licensing 
  • Patient and employee complaints

Preparing for a Healthcare Internal Audit

Preparation is crucial to ensuring a successful outcome in an internal audit. To get ready for a healthcare audit, your organization needs to:

  1. Understand the scope of the audit.
  2. Conduct an assessment of your organization’s internal compliance. 
  3. Recognize potential issues.
  4. Prove compliance with relevant laws, rules, and regulations.
  5. Prepare evidence to dispute allegations of non-compliance.
  6. Expect potential concerns to arise during the audit and prepare to address them. 

Defending Against a Healthcare Audit

There are instances when a healthcare audit becomes necessary because the auditor has already found red flags. When this occurs, your organization must adopt a strong defense during the audit.

 Here are strategies to protect your organization:

  1. Find out all you can about the scope of the audit.
  2. Set firm boundaries. The auditor should follow the limits and the scope of the audit.
  3. Understand your right to challenge negative audit results through the appeals process. 
  4. Take advantage of the audit results to reinforce your compliance.
  5. Create a compliance program and enforce it from the beginning to avoid red flags that warrant an audit. 


Healthcare compliance is a fundamental responsibility. Ensure you get professional guidance from an internal audit consulting service. It enables you to provide better patient care while ensuring efficient operations. More importantly, it helps protect your organization from legal issues.