Is Your Healthcare Company Ready? What You Need to Know About Medical Auditing
For many healthcare companies, it’s the phone call they never want to receive—their company is being audited.
Medical auditing is something commonly done by the IRS, as the government wants to make sure that healthcare companies are paying tax correctly and doing everything correctly when it comes to billing and insurance.
Is your company at risk of an audit? What should you do if it does happen?
To learn more, keep reading to find some of the key things you need to know about medical auditing as a healthcare business owner.
Why Is Medical Auditing Done?
If your healthcare company is called for a medical billing audit, you’re sure to feel nervous! However, it’s best not to panic, as audits happen to all companies from time to time.
The IRS does audits for many reasons, usually just to double-check the accuracy of your company’s tax returns. Businesses are sometimes audited due to anomalies in their returns, errors (more common in paper than online filing), and excessive deductions.
The IRS wants to make sure high-value medical companies are doing everything fairly and correctly, which is why they are often audited. Generally, auditors will be looking for fraudulent claims, incorrect use of billing codes, and checking that reimbursements were done correctly.
How Can Healthcare Companies Prepare for an Audit?
It’s no secret that the IRS is ramping operations when it comes to audits of healthcare businesses, so your company should be prepared.
The first step is to keep all of your records. Healthcare companies should keep all of their tax, invoicing, and business records for at least three years, so that they can be examined by auditors, if required.
You’ll also want to stay positive and helpful, taking the time to answer all of the questions from auditors and providing them with documentation. It’s also ok to admit if you’ve been an error in the past, as your company can learn from past mistakes.
If you have any questions before and during the process, your accountant should be able to talk you through what to expect.
What Will Happen After the Audit?
You may be concerned about what will happen after the audit. If it’s your first time being audited, your company may just be issued a warning to fix any issues for next time.
However, companies are subject to penalties and fines if they’re found guilty of more serious offenses.
Use These Tips to Understand the Medical Audit Process
Now that you know more about medical auditing and why it happens, the information above can help your healthcare company prepare.
Hopefully, your clinic will never have to be subjected to an audit. However, if it does happen, don’t panic—it’s sure to be a straightforward process and it will be over before you know it.
Get started today by ensuring all of your company’s records and financial information are organized, up to date, and accurate.
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