Healthcare Financial Audits
The speaker for class a CPA with a senior living facility called Senior Star Management. She is an analyst who does financial statement audits and has 6 ½ years of previous experience as a healthcare auditor. Haley’s stated education is a BS in Accounting and a BA in Finance. Several different topics were discussed relating to healthcare audits. One question that was asked was ‘what are the main reasons a healthcare facility is audited?’ It depends on the type of the audit and typically a financial statement audit is triggered by Medicare, your financing, or the community has called for it in some instances. Technically, a for-profit hospital does not have to be audited, but most hospitals of this type will have an audit because the board will want it done. Similarly, a non-profit hospital doesn’t have to be audited, but the public wants to know that the facility has a clean report. Lastly, if your facility has lenders, they usually want to see an audit performed. Another topic was Recovery Audit Contractor (RAC). RAC’s are indirectly employed by Medicare as subcontractors to audit companies for possible overpayments. Certain charge codes triggered an audit such as performing lots of heart procedures or lots of observation hours when the patient should have been admitted. A RAC audit differs from a cost report audit because you must pay the audit balance first and then try to dispute the amount with Medicare. A cost report audit allows a back and forth negotiation with auditors to arrive at an agreement on a balance owed or refunded. The pool of data RAC was allowed to audit was limited to as far back as 2007 and they were also only allowed to pull a certain amount of charts to analyze. Even with these limitations, quite a bit of money was paid back to