We all know that monitoring and auditing are part of an effective compliance program.  There are two ways to do this; you can handle reviews internally, or you can outsource them to an external entity. This blog will discuss some considerations for the best choice for you.

One of my favorite quotes is “You don’t know what you don’t know,” penned by Donald Rumsfeld in 2002.  The underlying meaning of this quote can be applied to the decision-making process for internal audits vs external audits when it comes to managing your Compliance Program risks.  When you decide whether to outsource your audits or not, one of the primary considerations for performing internal audits is probably cost. You already have staff on payroll; why not let them do the audits? They should be competent, and there will be no additional costs associated with them doing internal monitoring. We know that in 2025, cost is a critical factor in any decision.

There are some things that are best left to an external expert. For example, think about cutting your own hair! It can save time and money, however, the outcome will probably not be the same as if you went to a salon. Or how about doing your taxes? Often people choose to do their own tax preparation only to find out that they did not have access to all the tax information and there were unintended consequences.

Choosing to do all of your compliance audits internally could have the same outcome. Here are some benefits of choosing to have at least an annual external compliance audit of your billing and coding:

  • External audits are impartial.  There are no hidden agendas, trying to look over something, or fears that there might be negative repercussions for exposing miscoding.
  • Adding an external audit to regular internal monitoring may support findings that may have been identified.  Often employees take recommendations from an external source with more validity and weight than from an internal source.
  • An external audit should point out best practices, opportunities for improvement and share recommendations related to findings that the internal audits might not know about.
  • There is a possibility that the external audit may identify a trend that has not previously been uncovered.  Trends require corrections, most typically training and education or systems changes.

There is a place for both internal and external audits in an organization.  Internal monitoring can help support ongoing educational and training needs.  External audits are important to uncover any potential compliance risks.  Working together, the organization and the external audit team can ensure that proper coding and billing are supported by documentation.

If you are ready to discuss adding an external audit to your Compliance Plan, contact Kay Hashagen, Senior Consultant, at (410) 777-5999 or [email protected].