Here we are in 2024 and costs are skyrocketing! If you are the owner or management operator of a Skilled Nursing Facility (SNF), you know this more than ever. Staffing is at the top of everyone’s list of costs – and it only continues to increase! Providers are also feeling the pinch of the increased cost of infection prevention and the usual price increases for dining, housing and supplies. All of these factors combine to the budget tight. So, when it comes to the consideration of outsourcing audits to an external entity, you may think “we don’t have the funds or the need.”

Yet, when one considers some of the hidden costs of not performing routine external audits, you may be laying out more cash than you realize.

Let’s discuss some “costs” of not having an external audit.

  • “You don’t know what you don’t know.” This is one of our favorite quotes. If you are glossing over things on internal audits because you “have always done it this way” (even though it might not be correct), you are putting your claims at risk.
  • The root cause of errors might be easily corrected by updated training, a change in systems, or holding staff accountable to follow the expected operations procedure. External auditors are excellent at uncovering these opportunities for improvement.
  • An external audit delivers a truthful and errorless picture of your company’s financial position related to coding, documentation and billing. This might not otherwise be uncovered through internal resources.
  • A company can only succeed in properly maintaining internal audits when there are the people and the means to do so; often internal audits get pushed aside for other operations needs that appear to be more urgent.

On the flip side, here are the reasons why choosing to pay for an external audit might be cost effective in the long run!

  • External auditors may help owners and managers find mistakes that could turn into repayments or even self disclosures.
  • External auditors often identify underpayments – money left on the table that can be recouped by completing a modified MDS.
  • An unbiased third party conducts external audits; there is no need to worry about retaliation that results from audit outcomes.
  • External auditors are professionals who devote their whole attention to audit guidelines and any recent regulatory changes.
  • An external audit can help identify weaknesses and risk before you get an audit request from the government!

Internal audits are essential, but external audits have a higher probability of finding compliance concerns. In order to meet your compliance program requirements, schedule an external audit this year!

If you have any questions, the consultants at LW Consulting, Inc. will be happy to talk with you. Please reach out to Kay Hashagen, Senior Consultant at [email protected] or (410) 777-5999.