Corporate Compliance

1. Meticulous software evaluation can control costs
2. How to prepare working papers
3. Gov't audit insider

Healthcare Auditing Weekly, July 1, 2003

Health Care Auditing Strategies
NEW Newsletter
Guide to Compliance Auditing: Applying OIG Techniques and Tools
Strategies for Health Care Compliance
July 8, 2003
Vol. 1, No. 10

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Auditing news and tips

Sample audit programs (For subscribers to Health Care Auditing Strategies only)

Sample compliance policies and procedures. (For subscribers to Strategies for Health Care Compliance only)

The OIG Work Plan for Fiscal Year 2003

Ask the Expert

Tip of the Week

Compliance Hot Topics: Auditing, Billing and Coding, EMTALA, Stark, HIPAA

Question of the Week

In This Week's Issue

  1. Meticulous software evaluation can control costs
  2. How to prepare working papers
  3. Gov't audit insider

This Week's Headlines

1. Meticulous software evaluation can control costs

To comply with the security regulations for the Health Insurance Portability and Accountability Act of 1996, most hospitals will have to update their auditing capabilities.

But be careful about which product you buy. If you choose wisely, you will minimize auditing costs. Darlene Humphrey, of DataMirror Corporation in Ontario, Canada, says auditing software installation ought to be easy, as long as you follow these eight criteria for evaluating auditing products:

1. Real-time capabilities. Look for software that allows you to transport the audit trail to another system-this provides greater security for the trail and ensures that the data will be persevered if the system being audited crashes.

2. Functionality with disparate systems. Think about what operating systems and programs your auditing software must accommodate.

For all eight criteria for evaluating auditing products, read the pay-per-view article "HIPAA: How to test information security." The article costs $10. Subscribers to the online version of Health Care Auditing Strategies have free access to it. Subscribers to the print edition can find it in their June issues.

Or for only $23 per month, you can get even more auditing best practices and how-to articles by subscribing to Health Care Auditing Strategies. Save 10% by ordering online.

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Are you auditing correctly?

Auditing and monitoring are among the most important parts of your compliance program and probably the most complex. Determining what to audit and monitor can be an issue you're struggling with, but our special report "An Inside Look at Compliance Auditing and Monitoring: Integrating Government Standards can help. Should you use internal staff or an outside firm to conduct your audits? What do you do when a problem arises? How do you protect sensitive information? This special report has the answers you need. Order it today at

2. How to prepare working papers

It is extremely important to establish a set of working papers that supports your audit work down to the smallest detail. Working papers provide proof of the quality and competence of the work performed in the audit, and they substantiate the facts and conclusions in the audit report.

The Office of Inspector General's (OIG) auditor's working papers must adhere to the OIG's generally accepted auditing principals. The OIG's working papers must be

  • understandable without the need for detailed supplementary oral explanation
  • legible and neatly prepared
  • restricted to matters that are materially important and relevant to the objectives of the assignment

    Before preparing its working papers, the OIG determines their purpose; the information needed to complete the analysis; the location of supporting documentation; and the comparisons needed to prove the conditions or conclusions.

    For more information on how you can use the OIG's techniques to prepare your working papers, as well as tips and tools for planning a compliance audit, writing credible and convincing audit reports, and how to apply the government auditing standards to your own auditing and monitoring program, order the book " Guide to Compliance Auditing: Applying OIG Techniques and Tools." "Click here for more information or for details on how to order.

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    In addition to each 12-page monthly newsletter, Health Care Auditing Strategies (HCAS) subscribers receive the following benefits:

  • Audit talk-This is a free forum to network, share ideas, and solve problems for HCAS subscribers.

  • Audit advantage-Readers log on each month to the HCAS subscriber-only Web page that lists sample audit plans and government documents. Go to and enter the password that is printed in each issue of HCAS.

  • Fax and email alerts-When there's late breaking news that just can't wait until the next issue of HCAS, we'll fax or email the pertinent information to you immediately.

  • Editorial special reports-When there's a new regulation or news on laws related to health care auditors, our expert writers gather the necessary information and compile a special report. Subscribers received a free special report on the Sarbanes-Oxley Act with their May issues.

    Take advantage of these subscriber benefits, as well as auditing best practices and how-to articles by subscribing to Health Care Auditing Strategies. Save 10% by ordering online.


    Medicaid drug rebate program

    In this audit, the OIG evaluated whether the Utah Department of Health had established adequate accountability and internal controls over the Medicaid drug rebate program. The OIG used the following steps to reach its objective:

    1. The OIG reviewed the applicable Federal laws, regulations, and requirements, including sections 1903 and 1927 of the Social Security Act, the Omnibus Budget Reconciliation Act of 1990 and the Office of Management and Budget Circular A-87.

    2. The OIG examined copies of the Centers for Medicare and Medicaid Services (CMS) 64.9R reports the state of Utah submitted to CMS from October 1, 2001 through June 30, 2002.

    3. The OIG obtained and reviewed drug rebate accounts receivable records.

    4. The OIG interviewed Utah Division of Health Care Financing (DHCF) staff who performed functions related to the drug rebate program and reviewed an internal audit report dated July 22, 1998.

    For more information on the OIG's "Audit of the Medicaid Drug Rebate Program in Utah," go to

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    To learn more about the Sarbanes-Oxley Act and how it affects internal auditors and compliance officers, order the special report "Sarbanes-Oxley Act: Impact on Health Care Organizations"

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