Top 10 Tips On How To Prepare For A Physician Performance and Compensation Audit

Who doesn’t love audits? (insert sarcasm here)

Hospitals and health systems may need to conduct a physician performance and compensation audit to ensure that physicians are accurately tracking their activities and services and that they are aligned with the contractual obligations of the physicians. This process also helps confirm that the hospital pays for the appropriate number of hours worked or activities and services performed based on specific contract details. Preparing for a performance and physician compensation audit can seem overwhelming.

However, there are a few best practices that might make the Physician Performance and Compensation Audit procedure easier and more successful.

Physician Performance and Compensation Audit Tips

Review and Assess Current Clinician Compensation Practices

Evaluate a hospital’s present compensation practices before the audit takes place by looking over and evaluating the current compensation practices for clinicians. This includes examining the contracts, incentives, and bonuses for physicians. This process will assist in locating any potential problems and improvement areas.

Establish Clear Policies and Procedures

Create or revise policies and procedures for physician compensation to ensure they abide by state and federal regulations. Make sure that these policies and procedures are adequately communicated to all the relevant parties, including physicians and other personnel.

Monitor Contract Compliance

Keep a close eye on how the hospital’s compensation policies and procedures are being followed. Tracking compensation payments and making sure they adhere to the clinician’s contractual responsibilities are part of this. Check the doctor’s timesheets for adherence to contract requirements, rules, and regulations, such as those governing maximum work hours.

Conduct Regular Internal Audits

To help establish that internal policies and applicable laws are being followed, conduct routine internal audits of physician compensation. This will assist in finding any potential problems before an external audit is conducted. To ensure that timesheets are correct and complete, examine clinician time logs before submitting them for audit. This will make it more likely that any inconsistencies or mistakes will be discovered prior to the audit.

Review your Current Clinician Timesheet Management Process

Examine the current system for recording physician time logs closely before the audit to make sure it is accurate and effective. Determine any areas that could use improvement and make the necessary adjustments.

Ensure that All Physicians Understand the Timesheet Process

You’ll want to make sure that all contracted service providers understand how to properly fill out their timesheets and that they are aware of the importance of accuracy. Hold workshops or give detailed written instructions on how to complete a timesheet.

Maintain Accurate Records

Make certain that complete records, including any changes or corrections, are kept for all timesheets and payments made to physicians. All compensation arrangements, including contracts, bonuses, and incentives, must be meticulously documented as part of this process.  If any questions come up during the audit, having accurate record-keeping and internal procedures will make it simpler to provide documentation.

Have a Plan in Place for Handling Discrepancies

Nobody’s perfect. Errors or discrepancies could be discovered during the audit. It is crucial to have a strategy in place for dealing with these inconsistencies and to be ready to offer proof of any modifications or corrections that are made.

Review the Physician’s Schedules and Verify the Accuracy of Timesheets

Check the physicians’ schedules to make sure the hours worked and the nature of the work or services rendered are accurate. Review the activity logs and timesheets to corroborate that contractual obligations are being met.

Engage Legal, Compliance, and Financial Experts

Enlist the help of professionals in legal, finance, and compliance to aid in the auditing process. These professionals can offer advice on how to comply with pertinent laws and rules. They also work toward establishing fair and equitable hospital compensation policies.

In addition to the list above, communication with your physicians is a critical component in preparing for an audit. It is imperative that your contracted service providers understand the importance of accurate records and timekeeping logs, and cooperate in the process.

If a hospital does not adequately prepare for a physician performance and compensation audit, it may suffer serious repercussions. This includes financial penalties if the audit reveals that there has been non-compliance with state or federal regulations. If the audit discloses that the organization’s physician compensation practices need improvement, there may also be legal action against the hospital and a loss of physician confidence. This could harm the hospital’s reputation and affect the ability of the healthcare facility to attract and retain physicians.

Healthcare organizations must take the necessary actions to be audit-ready and follow compliance with applicable regulations. With the right approach and planning, the hospital can make the process as smooth as possible and minimize any disruptions to its operations. Follow us on X and LinkedIn for more.