Navigating critical healthcare areas through internal audit

Recent high-profile cyberattacks against healthcare organizations underscore an ever-present and evolving threat landscape. It's no surprise that cybersecurity and IT governance continue to top the list of internal audit priorities in our 2024 survey. Other top-ranking priorities include user access management and ensuring robust IT governance.

Financial integrity issues continue to rank in the top 10 priorities for internal audit, with accounts payable tied for third-largest concern in the 2024 survey. AP departments have key functions and experience disruptive events that merit inclusion on internal audit plans, including changes to the ecosystem due to emerging technologies, fragmentation of people and processes due to trends in outsourcing to external parties, and service interruption such as cyberattacks or other system downtime that prevents payment for goods and services.

Financial losses due to healthcare fraud amount to tens of billions of dollars each year. Risk exposure continues to rise as healthcare organizations face challenges to combat the evolving sophistication, frequency and types of internal and external fraud perpetuated. Internal audit plays a critical role in fraud management, prevention and detection by helping ensure the accuracy and reliability of a healthcare organization's financial reporting, compliance with laws and regulations, effectiveness of internal controls and protection of assets.

Recent events that have crippled many healthcare industry participants have drawn more attention to risks associated with increased reliance on third parties. The Change Healthcare cybersecurity incident highlighted the significant impact third-party vendors can have on business continuity. It also exposed categories of third parties that previously might not have been evaluated through vendor risk assessments and the like, such as claims processors and/or clearinghouses.

According to the 2024 SHRM Talent Trends Report, more than 75% of organizations have had difficulty in the last 12 months recruiting for full-time, regular positions and nearly half have had difficulties retaining these employees. For many organizations, talent (finding it, keeping it and ensuring the business has the best) is an enduring challenge. Internal audit departments play an important role in ensuring that an organization's talent function operates effectively and adheres to established policies and regulations.

Hospitals can improve their revenue cycles and deliver measurable returns by prioritizing compliance and accuracy in the identification, capture, reporting and reconciliation of chargeable items. Ineffective processes lead to poor charge entry, negatively affecting healthcare organizations and resulting in revenue losses. Regular audits are key to evaluating the effectiveness of charge capture processes.

• 2023

• 2022

• 2021