Respond Effectively to Healthcare Audits and Investigations

Drawing on legal expertise, today's compliance professionals use legal frameworks to promote practical policies that protect patients and healthcare organizations alike.

By Miami Law Staff Report 01-07-2026

Drawing on legal expertise, today's compliance professionals use legal frameworks to promote practical policies that protect patients and healthcare organizations alike.

The contemporary healthcare system relies on a complex web of regulations and compliance solutions to safeguard both patients and their information. Healthcare compliance ensures that providers and facilities operate ethically, using federal and state-based regulations to guide practices that reflect the best interests of patients.

What is a core part of this effort? Healthcare investigations and audits, which bring much-needed accountability to healthcare organizations. This is where weaknesses are identified and rectified, with prompt responses reducing the risk of patient harm.

Are you committed to supporting quality patient care and boosting organizational integrity within the healthcare system? As you step into the compliance space, be prepared to navigate audits and investigations that test your statutory knowledge. Get started by learning how these processes work — and discovering how a Master of Legal Studies (M.L.S.) can support audit-readiness in the healthcare field and beyond.

Key Takeaways

Auditing and investigations are key compliance measures designed to identify and coordinate responses to issues indicating noncompliance. Audit-ready organizations are better capable of preventing compliance issues or effectively remediating any concerns.

Compliance professionals play a central role in this effort, offering legal expertise along with strategic guidance so that healthcare organizations adhere to strict standards and protect patients. An M.L.S. can provide a valuable introduction to these far-reaching requirements, revealing what it takes to ensure compliance and to use audits or investigations as fuel for meaningful improvements.

What Are Healthcare Audits and Investigations?

Audits and investigations bring a systematic approach to identifying and assessing possible examples of noncompliance. These objective evaluations reveal whether healthcare services or activities occur in accordance with established healthcare regulations and best practices.

Definition and Purpose of Healthcare Audits

Audits involve structured evaluations, exploring a range of clinical, financial, and administrative practices to ensure that healthcare organizations comply with relevant regulations. Although primarily focused on compliance, these audits also promote financial integrity and quality improvement.

The Association of Healthcare Internal Auditors (AHIA) describes healthcare audits as being "formal, systematic, and disciplined," adding that they’re "designed to evaluate and improve the effectiveness of processes and related controls." AHIA also identifies a few critical components of audits: they should follow structured processes such as "planning, sampling, testing, and validating," culminating in "formal communication with recommendations and corrective action measures."

Key Differences Between Audits and Investigations

Audits and investigations serve a similar purpose: both bring accountability to the healthcare system, promoting strict adherence to critical rules and regulations. Where they differ, however, is in their timing — proactive versus reactive.

A healthcare audit acts as a monitoring checkpoint, designed to identify signs of noncompliance early on so they can be analyzed, addressed, and ultimately resolved. Healthcare investigations, however, are triggered by specific incidents that suggest misconduct. The National Alliance of Medical Auditing Specialists (NAMAS) explains that investigations can occur in response to whistleblower complaints or even audit results. The key is that they are reactive in nature, initiated after concerns come to light.

NAMAS also clarifies that healthcare investigations are not exclusively intended to uncover instances of wrongdoing. On a wider scale, they "ensure fairness, protect[ing] the organization from liability, and reinforc[ing] an ethical culture." Investigations encourage healthcare organizations to take swift action when potential issues arise, ensuring that the facts are well understood before any conclusions are drawn.

Common Triggers for Audits and Investigations

A variety of situations or scenarios could potentially trigger audits or investigations, although some may be scheduled at regular intervals to support routine compliance checks. By understanding outside triggers, organizations can adopt proactive measures that improve compliance posture and strengthen responses to any issues that may arise.

Regulatory Requirements and Compliance Risks

Many audits are triggered by emerging concerns related to compliance and risk management. This may occur in response to ongoing monitoring, which, as AHIA explains, ensures that "processes are working as intended" but may ultimately "identify the need for an audit."

Triggers uncovered through monitoring may indicate concerning and ongoing patterns as opposed to specific or severe incidents. For example, if long-term trends indicate increases in billing irregularities, targeted audits may provide added insight into the nature of these discrepancies and what they mean from a compliance perspective.

Whistleblower Complaints

The American Institute of Healthcare Compliance (AIHC) describes whistleblowers as "critical to protecting the integrity of healthcare delivery." They may report everything from unsafe care to privacy violations or even fraudulent billing.

Whistleblower complaints occur when those with insider knowledge of possible misconduct disclose information to those who have the power to rectify highlighted issues. These complaints trigger investigations, which determine not only whether wrongdoing occurred but also the scope of the issue and whether corrective actions might be warranted.

A noteworthy example of this took place in 2014, when Elin Baklid-Kunz (a hospital employee) filed a whistleblower complaint indicating that Halifax Hospital had violated the False Claims Act and the Stark Law. The hospital system ultimately agreed to pay the government $85 million to resolve this case and entered into a Corporate Integrity Agreement with the Department of Health and Human Services Office of Inspector General (HHS-OIG).

Types of Healthcare Audits

Healthcare audits take many forms but are commonly classified based on who conducts them and in what capacity. These typically fall into one of two main categories: internal audits that are driven by healthcare organizations' own compliance teams and external audits conducted by various accrediting bodies or consulting firms.

Internal Audits

Internal audits bring a formalized approach to evaluating policies and documentation, ensuring that compliance concerns are periodically addressed and promoting integrity through consistent adherence to regulatory requirements. These audits are typically conducted by compliance teams or professionals who work directly for the healthcare organizations in question. Teams can carry out thorough assessments without the immediate threat of penalties, which tends to bring anxiety to external investigations.

External and Third-Party Audits

External audits (described by AIHC as third-party audits) often involve accrediting bodies — such as the National Committee for Quality Assurance (NCQA) — or contractors with agencies like the Centers for Medicare and Medicaid Services. To truly qualify as third-party, these audits must be entirely free from conflicts of interest.

Some audits may be driven by internal efforts but may rely on independent consulting or auditing firms. AIHC refers to these as second-party audits. They shed light on issues that internal compliance teams may otherwise struggle to uncover while still providing proactive opportunities to address problems before starting a healthcare investigation.

The Regulatory Landscape in the United States

In the U.S., the healthcare system is governed by a complex series of regulations that determine how care is delivered and billed — and how patient information is protected. Understanding these rules (and the agencies that enforce them) is crucial to success in auditing and overarching compliance efforts.

Major Regulatory Bodies

Several regulatory bodies oversee wide-scale efforts to promote patient safety and financial integrity within the healthcare system. Key agencies include:

Department of Health and Human Services (HHS). Meant to "protect the health of all Americans," HHS is part of the executive branch. As a cabinet-level agency, it offers broad oversight surrounding healthcare policy. HHS involves several sub-agencies that, together, shape our modern healthcare regulatory environment. The Office for Civil Rights (OCR), for example, promotes equal access to health and human services, ensuring that covered entities comply with HIPAA requirements.
Office of Inspector General (OIG). As the independent oversight body within HHS, OIG aims to improve department efficiency by combating fraud and waste. OIG provides access to compliance guidance and resources but also conducts audits and "oversees audit work performed by others."
Department of Justice (DOJ). Responsible for enforcing federal healthcare laws, the Department of Justice conducts investigations and prosecutes violations related to fraud or abuse. Working closely with other agencies, DOJ ensures that organizations in violation of healthcare regulations are brought to justice. Notable examples include headline-hitting cases involving Purdue Pharma and Novartis AG.
Center for Internet Security (CIS). As a nonprofit committed to "safeguard[ing] public and private organizations against cyber threats," CIS establishes best practices and benchmarks to encourage cybersecurity compliance. This organization "harness[es] the power of the global IT community" to safeguard organizations against a variety of cyber threats.

Key Laws and Compliance Programs

The agencies highlighted above are responsible for monitoring and enforcing a wide range of healthcare laws that have been passed through the years in hopes of protecting patients and safeguarding their private information. Examples include:

Health Insurance Portability and Accountability Act (HIPAA). Forming the basis for patient privacy protection, HIPAA establishes strict rules for protecting sensitive medical records and ensuring confidentiality. This is a modern cornerstone of healthcare compliance and risk mitigation programs, calling for numerous administrative and technical safeguards that prevent patient information from unauthorized access or disclosure.
Stark Law. As aseries of laws designed to prevent physician self-referrals, the Stark Law keeps hidden financial ties from influencing clinical decisions. These laws provide much-needed protection for Medicare, promoting ethical practices while helping minimize conflicts of interest.
False Claims Act. Identified by HHS as one of the "most important federal fraud and abuse laws that apply to physicians," the False Claims Act strives to prevent the government from being overcharged for low-quality services.

Preparing Your Organization for an Audit

Auditing should not be viewed as a one-time event but rather as a valuable tool that promotes consistent compliance. Still, audit preparation is important, as it establishes the groundwork for effective responses in the event of external audits or even whistleblower-prompted investigations. Audit-ready organizations can quickly provide requested information and demonstrate adherence to regulatory requirements.

Building a Proactive Compliance Program

Audits may be proactive by nature, but the compliance programs that relate to audits should also prioritize prevention. This means establishing clear policies and ensuring that they are consistently followed by conducting regular internal reviews. Beyond this, it is imperative that compliance practices are strategically embedded into daily operations across all departments. This can be accomplished through automated monitoring and compliance-focused staff training.

Staff Training and Documentation Best Practices

Staff training should be a central component of any compliance program. This should not be limited to compliance teams; rather, it should be built into the very fabric of the healthcare system. All staff members, after all, have a role to play in ensuring adherence to regulations such as HIPAA.

Purpose-built documentation mechanisms make it easier for well-trained staff to abide by compliance measures. Best practices include standardized reporting templates and detailed documentation procedures. Additionally, documentation should be regularly checked to ensure accuracy and completeness.

The Audit Process: What to Expect

Healthcare audits can look different depending on who conducts them and why. Typically, these follow a structured process that includes several important phases, as outlined below:

Notification and Initial Requests

Audits begin with requests or notifications indicating the need for in-depth reviews or evaluations. These initial communications give organizations the chance to prepare for audits, providing enough time to gather relevant documentation or determine who will coordinate responses and work with designated auditors or investigators.

Onsite Visits and Interviews

During onsite visits, auditors observe healthcare operations to confirm compliance with regulatory standards and internal policies. As AIHC explains, auditors may gather information by "interviewing associates [and] observing activities." These interviews offer insights into healthcare workflows, revealing whether policies are consistently followed and how these policies or protocols impact patient care and administrative processes.

Reviewing Documentation and Medical Records

Auditors look to extensive documentation for proof of compliance in both administrative and clinical processes. From medical records to billing statements, many forms of documentation provide insight into concerns that may not initially be brought to light during onsite visits or interviews. This effort confirms that documentation supports clinical decisions, matches claims submitted, and meets both legal and organizational standards for accuracy and completeness.

To support documentation reviews, compliance teams may be expected to gather and organize a variety of records, verifying their relevance and accuracy. If any concerns or gaps are identified, compliance professionals may offer clarifications or provide contextual information.

Responding Effectively During an Audit

No matter how audits are initiated or why, they must be followed closely, with cooperative responses driving a smooth audit process while conveying a clear commitment to compliance and ethical conduct. Compliance teams coordinate these responses, promoting seamless communication with auditors and ensuring that all deadlines are met.

Designating a Response Team

Cross-functional groups known as audit response teams coordinate measures or actions taken during audits, ensuring that all responses meet strict legal and ethical standards. Along with compliance professionals, these teams should include representatives from far-reaching departments such as finance and IT.

Communicating With Auditors and Investigators

Healthcare organizations can maintain trust during audits and investigations by prioritizing transparency. This means cooperating with auditors and investigators and responding promptly and politely to all requests. Effective communication demonstrates a clear commitment to compliance. This, in turn, can promote a collaborative auditing process and prevent misunderstandings while demonstrating that accountability is a clear priority.

Ensuring Timely and Accurate Information Sharing

Information sharing is a critical component of the auditing process, as auditors are expected to scour a variety of documents and correspondence to confirm that healthcare practices reflect both internal policies and regulatory requirements. Accurate and prompt submissions prevent delays and could limit the potential for adverse findings, which are more likely if submitted information is deemed incomplete.

Addressing Audit Findings and Corrective Actions

Once completed, audits should produce detailed findings, including both identified issues and evidence that indicates the breadth or severity of these challenges. These findings may reference relevant regulations, especially if signs of noncompliance have been observed. Results should be fully evaluated and followed by formal responses that highlight corrective actions.

Analyzing Audit Results

Teams that analyze audit results begin by classifying findings based on possible patient risks or regulatory concerns. From there, root cause analyses reveal the broader issues that underscore highlighted problems. For example, analyses may suggest that repeated billing discrepancies stem from training gaps. Other identified root causes could include tech-related challenges or unclear policies.

Developing and Implementing Action Plans

With core issues identified, teams can begin to take action, developing corrective plans that address concerns referenced in audit findings. These plans should clarify steps for remediation, assign accountability, and establish detailed timelines so that corrective action is promptly taken.

Preventing Future Issues After an Audit

Audits should be framed as opportunities to improve patient safety through the power of strengthened compliance. This mindset supports proactive responses that can make a lasting difference. Once audits are complete and corrective actions have been taken, organizations should be proactive about avoiding recurrences and strengthening overall compliance resilience.

Continuous Monitoring and Quality Improvement

Audits may reveal current instances of noncompliance, but they cannot safeguard against all future compliance concerns. Therein lies the need for continuous monitoring, with systematic tracking providing early insight into emerging risks. Monitoring also follows previously implemented remedies, ensuring that these corrective actions remain effective. AIHC recommends that corrective actions be compared to previous performance baselines or even audit results to confirm effectiveness.

Updating Policies and Procedures

Some audits may indicate the need for updated policies that reflect identified gaps in compliance. Compliance officers and legal counsel may be heavily involved in this effort, although additional insight might be needed from team leads or department heads to ensure that proposed policies are practical and realistic. Policy language can then be updated to reflect audit recommendations, with revised policies clarifying responsibilities and protocols.

Any policy updates should be accompanied by in-depth regulatory reviews that confirm compliance with federal and state regulations. Following formal approvals, new policies are communicated to all staff members, who are trained on new procedures.

Learn the Secrets to Audit-Readiness with Miami Law

Healthcare audits and investigations protect patients and entire healthcare systems, but they demand a strong understanding of regulatory requirements and compliance frameworks. If you're committed to encouraging ethical practices while safeguarding patients, you can make a positive difference by promoting strong compliance and audit-readiness within the healthcare environment.

Begin by pursuing an online Master of Legal Studies (M.L.S.) with the University of Miami School of Law. Using legal expertise to amplify industry-specific compliance and risk management initiatives, our program introduces you to complex regulatory frameworks along with best practices to ensure audit-readiness.

Want to tailor your expertise to reflect current challenges and opportunities within the healthcare sector? Opt for Miami Law's Healthcare Law and Regulation track. You'll explore the complex rules and regulations governing medical billing and coding while gaining a thorough understanding of the many internal and external legal risks unique to the healthcare system.

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