How to Reduce Audit Risk with Automated Validation
Risk Management Team
January 22, 2024
Healthcare audits are inevitable, but audit findings don't have to be. Organizations implementing automated validation systems report up to 85% fewer audit findings and significantly reduced compliance costs.
The Stakes Are High:
The average CMS audit results in $1.2 million in findings, with some organizations facing penalties exceeding $10 million. Manual validation processes miss critical errors that automated systems catch 99.7% of the time.
The Audit Risk Landscape
Common Audit Findings
Data Quality Issues (45%)
- • Incomplete or missing data elements
- • Inconsistent formatting across files
- • Invalid codes or values
- • Duplicate or conflicting records
Process Failures (35%)
- • Inadequate documentation
- • Missing approval workflows
- • Delayed corrective actions
- • Insufficient oversight controls
Financial Impact of Audit Findings
The Power of Automated Validation
Real-Time Error Detection
Automated validation systems continuously monitor data quality and process compliance, catching issues before they become audit findings:
- Comprehensive rule-based validation covering all CMS requirements
- Cross-file consistency checks and relationship validation
- Instant alerts for critical errors requiring immediate attention
- Historical trend analysis to identify recurring issues
Case Study: 65% Reduction in Audit Findings
A mid-sized Medicare Advantage plan implemented automated validation for their universe file submissions and saw dramatic improvements:
- • 23 audit findings per review
- • $1.1M in annual penalties
- • 160 hours per submission
- • 8 audit findings per review
- • $380K in annual penalties
- • 45 hours per submission
Key Components of Effective Validation
Multi-Layer Validation Approach
Ensures all data elements meet CMS formatting requirements and data type specifications.
Applies complex business logic and CMS-specific rules to identify logical inconsistencies.
Validates relationships and consistency across multiple submission files and time periods.
Identifies unusual patterns or outliers that may indicate data quality issues.
Comprehensive Coverage Areas
Universe File Validation
- • CDAG enrollment data validation
- • ODAG encounter data checks
- • Financial Alignment file verification
- • SNPCC special needs plan validation
Process Validation
- • Workflow compliance monitoring
- • Documentation completeness checks
- • Approval process verification
- • Timeline adherence tracking
Implementation Best Practices
Phased Deployment Strategy
Successful validation implementation requires a structured approach:
- Assessment Phase: Identify current validation gaps and prioritize high-risk areas
- Pilot Implementation: Start with one file type or process to validate effectiveness
- Gradual Expansion: Systematically extend validation to additional areas
- Full Integration: Achieve comprehensive validation across all compliance areas
- Continuous Improvement: Regularly update rules and enhance validation logic
Critical Success Factors
- ✓ Executive leadership support and clear mandate for compliance
- ✓ Dedicated project team with both technical and compliance expertise
- ✓ Comprehensive training program for all affected staff
- ✓ Clear escalation procedures for validation failures
- ✓ Regular monitoring and reporting of validation effectiveness
Measuring Validation Success
Key Takeaways
- ✓Automated validation reduces audit findings by up to 85%
- ✓Multi-layer validation approaches provide comprehensive error detection
- ✓Real-time monitoring prevents issues from becoming audit findings
- ✓Phased implementation ensures smooth adoption and quick wins
- ✓ROI is typically achieved within 6 months of implementation
Eliminate Audit Surprises
Sevana Health's CMS Universe Scrubber provides comprehensive automated validation with 500+ built-in rules, ensuring your submissions are audit-ready before they reach CMS.