Nonprofit Health Care Orgs Audited More than For-Profits

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August 14, 2012; Source: FierceHealthFinance

A recent report, “Auditing the Auditors,” by the Health Care Compliance Association (HCCA) has found that among health care providers, nonprofits are audited more than for-profits. According to the HCCA, “Being audited by two different agencies looking at the same problem was reported by 42% of nonprofits, as compared to just 25% of for profits. In addition they report undergoing more audits than for profits.”

The report concludes, “the burden of audits appears to be falling disproportionately on the nonprofit sector. While it was anticipated that size would be the most meaningful predictor of audits, it was not expected that financial structure would have such a significant impact. It is difficult to know if this is a conscious policy or an accidental one.”

For-profits reported an average of four RAC audits in the past 12 months, while nonprofits reported just above six. Among all types of audits, Medicare Recovery Audit Contractor (RAC) audits were most common. Making matters worse for nonprofits, for-profits are more likely to have dedicated audit staff.

The report also finds that (wait for it—wait for it!) “outside audits by regulators are making significant demands on healthcare providers” and “the range of organizations conducting the audits is likely (sic) adding to the amount and complexity of the work load.” Maybe that last bit is obvious but this report may be something you want to share with your own contracting agencies. This unfairly disadvantages nonprofits and seems tailor-made for an advocacy effort on the part of the National Council of Nonprofits and Independent Sector. –Ruth McCambridge

  • Anna Holm

    was there any of the Non-profit organization that stood out in this report? Any that stood closer to For-profit organizations way of providing audits?

  • oyvey

    Good piece. Thanks! (Just curious why, in last graf, you “sic”ed the second quoted clause, which seems grammatically correct within the quote. Guessing you thought clause contained a plural subject, singular verb, but “range of organizations” is singular and singular verb form seems right.)