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AUDIT PROGRAM by wanghonghx

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									                        AUDIT PROGRAM
                     ACCOUNTS RECEIVABLE




AUDIT OBJECTIVES:




  1. Account balances in receivable status are accurate and
     properly reflect services rendered and payments made.
  2. Billings for services rendered are supported by
     documentation in the patient's medical record and are
     submitted to patients or their insurance companies in a
     timely manner.
  3. Payments received are promptly and properly posted.
  4. Monthly reports submitted to the Financial Services
     Department of revenue and other activity are accurate and
     agree with records in the center and with general Ledger.

  5. Accounts are adequately monitored and followed - up to
     assure prompt collection.

  6. Delinquent accounts sent to a collection agency for
     follow - up are adequately monitored by Center
     management.

  7. Credit balance accounts are promptly researched and
     refunded as appropriate.

  8. Satisfactory internal controls are in effect and
     working properly.



AUDIT PROCEDURES
A. Pre-Audit

  1. Announce audit to department management,
     appropriate administrator and other affected
     persons.

  2. Obtain or order trial balances of accounts
     receivable outstanding, accounts in collection
     agency status, copies of reports sent to
     Financial Services and other applicable
     materials.

  3. Review previous audit reports, continuing audit file,
     departmental procedure manuals, computer operations
     manuals and other applicable reference materials.

  4. Together with the Director - Internal Audit, determine
     if confirmations will be positive/ negative, sample
     sizes to be selected, and any special reviews to be
     performed.

  5. Schedule pre - audit discussions or walkthroughs as
     deemed necessary.

  6. Obtain copy of collection agency contract.

  7. Announce, or have department management announce, the
     audit to the collection agency.



B. Confirmations

  1. Prepare a confirmation letter to be sent to
     patients/guarantors.

     a. letter will be positive/negative

     b. letter should contain at a minimum: patient
        name and account number; guarantor name and
        address; date(s) of service; account balance

  2. Select a _____% sample of active accounts plus
     all accounts over $_____ to receive
     confirmations.

  3. Mail confirmation letters. For positive
     confirmations, be sure to include a postage paid
     return envelope to Internal Audit.

  4. For positive confirmations after 2-3 weeks, send
     second requests.

  5. For confirmations returned with discrepancies,
     investigate and resolve the discrepancy.
  6. For positive confirmations not returned, perform
     alternative procedures as deemed applicable.

  7. Summarize results.



C. Reconcilements

  1. Using the detailed trial balance of open accounts
     and monthly reports submitted to Financial
     Services, reconciles Center A/R to General
     Ledger.

  2. To the extent deemed necessary, reconcile other
     records to G/L such as payments received,
     services rendered during the month.

  3. Resolve any discrepancies.

D. Billings

  1. Review and document procedures used for billing
     of services (to self pay and to insurance
     companies). Obtain the departmental charge
     master.

  2. Determine that all billing is current.

  3. Select a sample of patients from appointment
     books for the last _____ months. Perform the
     following:

     a. Review patient’s medical record to assure that
        patient was seen that day for scheduled
        service.

     b. Trace the service rendered as documented to
        the patient’s bill.

     c. If patient paid for service on the date of
        service, follow the payment through to posting
        on the account.

     d. Determine that the bill was given to patient
        or submitted to insurance in a timely manner.

E. Test sample of open accounts.

  1. From he trial balance of open accounts, select a
     _____% sample of open accounts for testing.
     Perform the following:

     a. Determine that the service billed is supported
        by documentation in the patient’s chart
     b. Determine when billings were sent to the
        patient or insurance company

     c. Review any account follow-up performed,
        including rebillings or insurance rejections.

     d. Determine that any payments made were posted
        promptly.

  2. Select also a _____ sample of all open accounts
     over $________. Perform the same account analysis
     as in E.1.

F. Credit Balance Accounts

  1. Select all credit balance accounts over $________
     and/or outstanding for more than _____ days.

  2. Determine research one on the account.

  3. Follow-up to determine that a refund was issued
     or other disposition.

G. Analysis of Accounts

  1. Prepare an aging of open accounts, using
     categories, <30, 30-60, 60-90,>90 days old.
     Consider breaking the >90 day category into more
     categories if it is large.

  2. To the extent possible, break the aging down by
     payer class.

H. Delinquent Account

  1. Review and document procedures for in-house
     collection efforts and charge-off.

  2. Select a ____ sample of accounts delinquent for
     more than __________ and/or with balance greater
     than $_____.

  3. Review efforts taken to collect the account.

  4. Determine if account meets department criteria
     for charge-off.

  5. Determine when accounts are sent to a collection
     agency.

I. Collection Agency Accounts

  1. Complete applicable sections of Audit Program for
     Collection Agency Accounts.
J. Internal Control Review

  1. Document through flowcharts or other means the
     controls and critical processes audited.

  2. Complete Internal Control Questionnaire.

  3. Document control strengths and weaknesses. Pay
     particular attention to controls needed in a
     computerized environment.

								
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