Question

What changes have the Affordable Healthcare Act brought about for Internal Auditors of NFP and/or Governmental Healthcare Service Providers? Do you think that this has been a positive change? Why/why not?

Answer 1

Internal Audit in Healthcare;

The Healthcare sector is undergoing extra-ordinary changes and for the same Internal Audit of healthcare is playing an essential role in the process. Instead of serving more and more following a volume based approach, Affordable care act (ACA) has diverted the direction to value based approach. Among other, practically every aspect of the healthcare sector has been revamped. Scope and intricacies of regulatory compliances have increased drastically.

Considering this with the evolvement of healthcare sector, the function of Internal Audit requires equal evolvement and must be in line so as to provide healthcare organizations evolved risk coverage. Internal audits’ scope of primary focus on dollar movement and nature of transaction, alongwith related business cycle audit have served heath organisations adequately in past. However, this approach is now shall not suffice as healthcare sector is drifting from reimbursement of claims to fabrication of a new system of rewards which is based on value with focus on quality, safety, and appropriateness of care.

A major element has been added to the calculation which is outcomes coupled with flourishing use of information technology in almost each aspect to render healthcare services. The Internal Audit is now required to cover beyond traditional financial audit areas and now focus on consideration of overall strategic risks which includes quality and performance measures, cybersecurity, post-treatment care, tele-consulting and likewise.

Major changes expected of New-age Internal Auditors is to have a vital understanding of;

1. A forceful and an elaborate risk assessment which is based on collaboration of Auditors and service providers. Alongwith it is expected of Internal auditors to have a broad-view of risk associated so as to identify high-risk needs and issues and determine where the internal audit time and resources should be focussed in the organisation
2. Maintain an setup based on the smart utilization of sophisticated data analysis to support effective and efficient coverage of requisite financial audit areas and alosgside creating a dais to cover new risks areas.
3. Core specialization and requisite staff to cater to complex and emerging audit areas. Also required on part of Internal Auditors is to maintain philosophy to understand and manage line operations assuring the need for proactive risk management by making them aware about the importance of role played by each department.

Basis the above discussion it can be concluded that the ACA has brought in changes to the healthcare sector which directs the Internal Audit function from auditing the dollars to actually ensuring that the value is also imparted as has been required. This is truly a positive change and will enhance quality in imparting health care service.