# Internal vs. External Audit for Mental Health Practices

**URL:** https://www.valant.io/resources/blog/internal-vs-external-audit-for-mental-health-practices/
**Author:** Andrew Schatzberg
**Published:** January 30, 2024

> [vc_row type="in_container" full_screen_row_position="middle" column_margin="default" column_direction="default" column_direction_tablet="default" column_direction_phone="default" scene_position="center" text_color="dark" text_align="left" row_border_radius="none" row_border_radius_applies="bg" overlay_strength="0.3" gradient_direction="left_to_right" shape_divider_position="bottom" bg_image_animation="none" shape_type=""][vc_column column_padding="no-extra-padding" column_padding_tablet="inherit" column_padding_phone="inherit" column_padding_position="all" column_element_spacing="default" background_color_opacity="1" background_hover_color_opacity="1" column_shadow="none" column_border_radius="none" column_link_target="_self" gradient_direction="left_to_right" overlay_strength="0.3" width="1/1" tablet_width_inherit="default" tablet_text_alignment="default" phone_text_alignment="default" bg_image_animation="none" border_type="simple" column_border_width="none" column_border_style="solid"][vc_column_text]Being prepared for audits...

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[vc_row type=”in_container” full_screen_row_position=”middle” column_margin=”default” column_direction=”default” column_direction_tablet=”default” column_direction_phone=”default” scene_position=”center” text_color=”dark” text_align=”left” row_border_radius=”none” row_border_radius_applies=”bg” overlay_strength=”0.3″ gradient_direction=”left_to_right” shape_divider_position=”bottom” bg_image_animation=”none” shape_type=””][vc_column column_padding=”no-extra-padding” column_padding_tablet=”inherit” column_padding_phone=”inherit” column_padding_position=”all” column_element_spacing=”default” background_color_opacity=”1″ background_hover_color_opacity=”1″ column_shadow=”none” column_border_radius=”none” column_link_target=”_self” gradient_direction=”left_to_right” overlay_strength=”0.3″ width=”1/1″ tablet_width_inherit=”default” tablet_text_alignment=”default” phone_text_alignment=”default” bg_image_animation=”none” border_type=”simple” column_border_width=”none” column_border_style=”solid”][vc_column_text]Being prepared for audits is a critical aspect of running a successful mental health practice. And, of course, it’s a field where compliance with regulations and industry standards is non-negotiable. Compliance ultimately protects both patients and practices. The details of internal vs. external audit processes may vary, but both can be time-consuming and complex.
Failing an audit can have severe consequences, affecting a practice’s financial stability, professional reputation, and more. From penalties or fines to the loss of licenses, the cost of failing an audit can be steep. To pass audits successfully, it’s important to understand some of their key components and to have some preparation strategies in place.[/vc_column_text][/vc_column][/vc_row][vc_row type=”in_container” full_screen_row_position=”middle” column_margin=”default” column_direction=”default” column_direction_tablet=”default” column_direction_phone=”default” scene_position=”center” text_color=”dark” text_align=”left” row_border_radius=”none” row_border_radius_applies=”bg” overlay_strength=”0.3″ gradient_direction=”left_to_right” shape_divider_position=”bottom” bg_image_animation=”none” shape_type=””][vc_column column_padding=”no-extra-padding” column_padding_tablet=”inherit” column_padding_phone=”inherit” column_padding_position=”all” column_element_spacing=”default” background_color_opacity=”1″ background_hover_color_opacity=”1″ column_shadow=”none” column_border_radius=”none” column_link_target=”_self” gradient_direction=”left_to_right” overlay_strength=”0.3″ width=”3/4″ tablet_width_inherit=”default” tablet_text_alignment=”default” phone_text_alignment=”default” bg_image_animation=”none” border_type=”simple” column_border_width=”none” column_border_style=”solid”][vc_column_text]

## Understanding Internal vs. External Audit Requirements

In the behavioral health field, audits involve a comprehensive examination of a practice’s compliance with regulations and standards, such as those from states and insurance providers. For example, state regulations may require regular training for staff dealing with sensitive patient information. The scope and depth of internal vs. external audits can vary; care delivery and finances are just a couple of areas that audits may cover. And keeping up with evolving audit requirements is essential, as regulations are updated or revised.

It’s imperative for practices to understand the legal and industry-specific standards governing audits. Common audit requirements help providers maintain practices that align with the highest standards of care. Compliance with audit requirements fosters trust and credibility with patients, insurers, and regulatory bodies.

## Data Collection and Documentation

What’s involved in insurance audits varies. This is yet another reason why accurate and thorough recordkeeping is so important. Typically, auditors review clinical and financial data during mental health practice audits. For example, in a quality assurance audit, practices would be evaluated for the quality of care that they provide. These audits can inform practices of areas for improvement.

Implementing an electronic health record (EHR) system significantly contributes to data accuracy and accessibility. That is, because these systems automate reporting and documentation, the risk of errors is minimized. Reducing manual data entry doesn’t just improve accuracy—it saves time as well. An EHR helps a practice maintain comprehensive patient and financial records. This not only helps speed the audit process along, but also makes overall practice management more efficient.

## Compliance with Privacy Regulations

Mental health practices are trusted with extensive amounts of sensitive information and private records. Maintaining patient confidentiality is one of the most important responsibilities of a practice. Adhering to regulations—HIPAA is the most widely known—is one way to help ensure that confidentiality. Technology, such as EHRs, can enhance data security measures by providing detailed audit trails, recording every interaction with patient data to reinforce compliance.[/vc_column_text][/vc_column][vc_column column_padding=”no-extra-padding” column_padding_tablet=”inherit” column_padding_phone=”inherit” column_padding_position=”top-bottom” column_element_spacing=”default” background_color_opacity=”1″ background_hover_color_opacity=”1″ column_shadow=”none” column_border_radius=”none” column_link_target=”_self” gradient_direction=”left_to_right” overlay_strength=”0.8″ width=”1/4″ tablet_width_inherit=”default” tablet_text_alignment=”default” phone_text_alignment=”default” bg_image_animation=”none” border_type=”simple” column_border_width=”none” column_border_style=”solid”][vc_row_inner content_placement=”middle” column_margin=”default” column_direction=”default” column_direction_tablet=”default” column_direction_phone=”default” left_padding_desktop=”2%” right_padding_desktop=”2%” text_align=”center”][vc_column_inner column_padding=”padding-5-percent” column_padding_tablet=”inherit” column_padding_phone=”inherit” column_padding_position=”all” column_element_spacing=”default” background_color_opacity=”1″ background_hover_color_opacity=”1″ background_image=”14078″ background_image_position=”center center” enable_bg_scale=”true” background_image_loading=”default” font_color=”#ffffff” column_shadow=”none” column_border_radius=”10px” column_link_target=”_self” color_overlay=”#333333″ color_overlay_2=”#333333″ gradient_direction=”left_to_right” overlay_strength=”0.8″ width=”1/1″ tablet_width_inherit=”default” bg_image_animation=”none” border_type=”simple” column_border_width=”none” column_border_style=”solid”][vc_custom_heading text=”Blog” font_container=”tag:p|text_align:center|color:%23ffffff” use_theme_fonts=”yes”][vc_column_text]**Why Your Practice Should Accept Insurance for Therapy Along With Private Pay**[/vc_column_text][divider line_type=”No Line” custom_height=”10″][nectar_btn size=”small” button_style=”regular” button_color_2=”Extra-Color-1″ icon_family=”none” url=”https://www.valant.io/resources/blog/why-your-practice-should-accept-insurance-for-therapy-along-with-private-pay/” text=”Learn More”][/vc_column_inner][/vc_row_inner][divider line_type=”No Line” custom_height=”20″][vc_widget_sidebar enable_sticky=”true” sidebar_id=”nectar-extra-sidebar”][divider line_type=”No Line” custom_height=”20″][/vc_column][/vc_row][vc_row type=”in_container” full_screen_row_position=”middle” column_margin=”default” column_direction=”default” column_direction_tablet=”default” column_direction_phone=”default” scene_position=”center” text_color=”dark” text_align=”left” row_border_radius=”none” row_border_radius_applies=”bg” overlay_strength=”0.3″ gradient_direction=”left_to_right” shape_divider_position=”bottom” bg_image_animation=”none” shape_type=””][vc_column column_padding=”no-extra-padding” column_padding_tablet=”inherit” 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Grow Your Practice

[/vc_column_text][vc_custom_heading text=”Leverage Your EHR To Grow Your Thriving Practice” font_container=”tag:h2|text_align:center|color:%23ffffff” use_theme_fonts=”yes”][divider line_type=”No Line” custom_height=”10″][nectar_btn size=”jumbo” button_style=”see-through-3″ color_override=”#ec1367″ hover_color_override=”#ec1367″ hover_text_color_override=”#ffffff” icon_family=”none” url=”https://www.valant.io/growing-your-practice/” margin_top=”25″ text=”Learn More”][/vc_column_inner][vc_column_inner column_padding=”no-extra-padding” column_padding_tablet=”inherit” column_padding_phone=”inherit” column_padding_position=”all” column_element_spacing=”default” background_color_opacity=”1″ background_hover_color_opacity=”1″ column_shadow=”none” column_border_radius=”none” column_link_target=”_self” gradient_direction=”left_to_right” overlay_strength=”0.3″ width=”1/6″ tablet_width_inherit=”default” bg_image_animation=”none” border_type=”simple” column_border_width=”none” column_border_style=”solid”][/vc_column_inner][/vc_row_inner][/vc_column][/vc_row][vc_row type=”in_container” full_screen_row_position=”middle” column_margin=”default” column_direction=”default” column_direction_tablet=”default” column_direction_phone=”default” scene_position=”center” text_color=”dark” text_align=”left” row_border_radius=”none” row_border_radius_applies=”bg” overlay_strength=”0.3″ gradient_direction=”left_to_right” shape_divider_position=”bottom” bg_image_animation=”none”][vc_column column_padding=”no-extra-padding” column_padding_tablet=”inherit” column_padding_phone=”inherit” column_padding_position=”all” column_element_spacing=”default” background_color_opacity=”1″ background_hover_color_opacity=”1″ column_shadow=”none” column_border_radius=”none” column_link_target=”_self” gradient_direction=”left_to_right” overlay_strength=”0.3″ width=”1/1″ tablet_width_inherit=”default” tablet_text_alignment=”default” phone_text_alignment=”default” bg_image_animation=”none” border_type=”simple” column_border_width=”none” column_border_style=”solid”][divider line_type=”No Line” custom_height=”20″][/vc_column][/vc_row][vc_row type=”in_container” full_screen_row_position=”middle” column_margin=”default” column_direction=”default” column_direction_tablet=”default” column_direction_phone=”default” scene_position=”center” text_color=”dark” text_align=”left” row_border_radius=”none” row_border_radius_applies=”bg” overlay_strength=”0.3″ gradient_direction=”left_to_right” shape_divider_position=”bottom” bg_image_animation=”none” shape_type=””][vc_column column_padding=”no-extra-padding” column_padding_tablet=”inherit” column_padding_phone=”inherit” column_padding_position=”all” column_element_spacing=”default” background_color_opacity=”1″ background_hover_color_opacity=”1″ column_shadow=”none” column_border_radius=”none” column_link_target=”_self” gradient_direction=”left_to_right” overlay_strength=”0.3″ width=”3/4″ tablet_width_inherit=”default” tablet_text_alignment=”default” phone_text_alignment=”default” bg_image_animation=”none” border_type=”simple” column_border_width=”none” column_border_style=”solid”][vc_column_text]

## Financial Auditing and Billing Accuracy for an Internal vs. External Audit

Billing accuracy and other financial records are critical components of audits. Revenue and revenue sources, cash flow analysis, expense management, and coding compliance are some other common financial metrics looked at in audits.

Reimbursement policies govern how services are billed and reimbursed by payers such as Medicare, Medicaid, and private insurance companies. Different payers may have different requirements when it comes to the documentation and detail needed to support the necessity of services rendered. A practice’s billing will need to align with all legal and regulatory requirements.

EHRs can integrate seamlessly with billing software, ensuring that a practice’s financial documentation aligns with its patient care records. This facilitates a smoother, more streamlined auditing process because auditors can cross-reference patient data with corresponding billing information, contributing to overall audit readiness.

## Staff Training and Education

Staff training is a critical step for mental health practices. Training familiarizes staff with what to expect during an audit, ensuring that the real thing will then go more smoothly when the time comes. Fulfilling records requests can be time consuming, and of course a practice’s day-to-day work still needs to happen, too. Thus, educating staff on compliance requirements, the types of records they’ll need to locate, and other best practices is essential for success.

Technology can be an important part of training and education. Training on the practice’s EHR system can help staff streamline data collection and reporting.

Ongoing training ensures the team stays up-to-date and fosters a culture of continuous improvement, ensuring that patient care and satisfaction don’t wind up on the back burner during an audit.

## Conducting Internal Audits

Preparing for and conducting an internal audit helps practices better understand how they would manage an external audit and make any necessary adjustments. Following some internal audit best practices can help make the most of the effort involved. For example, getting started could include the following steps:

- Define audit objectives

Clearly outline the goals and purpose of the internal audit

- Establish audit criteria

Decide on the rules and benchmarks for the audit, such as laws, regulations, policies, and best practices

- Select audit team

Identify the appropriate personnel and ensure they have the necessary skills and knowledge to conduct the audit

- Develop audit plan

Determine the scope, methodology, timeline, and necessary resources for the audit

An internal audit might uncover problems or areas of improvement, which gives practices the chance to follow through on identifying and implementing remedies. An ongoing reporting and feedback system can record error rates and trends as changes are made. In this way, internal vs. external audit processes can actually lead to similar concrete results.[/vc_column_text][/vc_column][vc_column column_padding=”no-extra-padding” column_padding_tablet=”inherit” column_padding_phone=”inherit” column_padding_position=”top-bottom” column_element_spacing=”default” background_color_opacity=”1″ background_hover_color_opacity=”1″ column_shadow=”none” column_border_radius=”none” column_link_target=”_self” gradient_direction=”left_to_right” overlay_strength=”0.3″ width=”1/4″ tablet_width_inherit=”default” tablet_text_alignment=”default” phone_text_alignment=”default” bg_image_animation=”none” border_type=”simple” column_border_width=”none” column_border_style=”solid”][vc_row_inner content_placement=”middle” column_margin=”default” column_direction=”default” column_direction_tablet=”default” column_direction_phone=”default” text_align=”center” css=”.vc_custom_1704817083374{border-radius: 10px !important;}”][vc_column_inner column_padding=”padding-5-percent” column_padding_tablet=”inherit” column_padding_phone=”inherit” column_padding_position=”all” column_element_spacing=”default” background_color=”#1e1e1e” background_color_opacity=”1″ background_hover_color_opacity=”1″ font_color=”#ffffff” column_shadow=”none” column_border_radius=”10px” column_link_target=”_self” gradient_direction=”left_to_right” overlay_strength=”0.3″ width=”1/1″ tablet_width_inherit=”default” bg_image_animation=”none” border_type=”simple” column_border_width=”none” column_border_style=”solid”][vc_custom_heading text=”Blog” font_container=”tag:p|text_align:center|color:%23ffffff” use_theme_fonts=”yes”][vc_column_text]**Is it Possible to Make Billers and Providers Happy in Behavioral Health?**[/vc_column_text][divider line_type=”No Line” custom_height=”10″][nectar_btn size=”small” button_style=”see-through-3″ color_override=”#ec1367″ hover_color_override=”#ec1367″ hover_text_color_override=”#ffffff” icon_family=”none” url=”https://www.valant.io/resources/blog/is-it-possible-to-make-billers-and-providers-happy-in-behavioral-health/” text=”Learn More”][/vc_column_inner][/vc_row_inner][divider line_type=”No Line” custom_height=”20″][vc_widget_sidebar enable_sticky=”true” sidebar_id=”page-sidebar”][divider line_type=”No Line” custom_height=”20″][/vc_column][/vc_row][vc_row type=”full_width_background” full_screen_row_position=”middle” column_margin=”default” equal_height=”yes” content_placement=”middle” column_direction=”default” column_direction_tablet=”default” column_direction_phone=”default” bg_image=”12115″ bg_position=”center center” background_image_loading=”default” bg_repeat=”no-repeat” scene_position=”center” top_padding=”10%” bottom_padding=”10%” text_color=”light” text_align=”left” row_border_radius=”none” row_border_radius_applies=”bg” color_overlay=”#333333″ overlay_strength=”0.8″ gradient_direction=”left_to_right” shape_divider_position=”bottom” bg_image_animation=”none” shape_type=””][vc_column column_padding=”no-extra-padding” column_padding_tablet=”inherit” column_padding_phone=”inherit” column_padding_position=”all” column_element_spacing=”default” background_color_opacity=”1″ background_hover_color_opacity=”1″ column_shadow=”none” column_border_radius=”none” column_link_target=”_self” gradient_direction=”left_to_right” overlay_strength=”0.3″ width=”2/3″ tablet_width_inherit=”default” tablet_text_alignment=”default” phone_text_alignment=”default” bg_image_animation=”none” border_type=”simple” column_border_width=”none” column_border_style=”solid”][vc_column_text]Starting Your New Practice

[/vc_column_text][split_line_heading animation_type=”line-reveal-by-space” font_style=”h2″ content_alignment=”default” mobile_content_alignment=”inherit” text_content=”Private Practice Business Plan Template”]Patient Portal[/split_line_heading][vc_column_text]Learn the benefits of developing a private practice business plan and download a free template.

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## Utilizing Technology for Compliance

Today’s technologies offer practices improved data accuracy, robust security measures, automated reporting, and more. And integrations between various tools and systems can significantly enhance efficiency and reduce errors. By seamlessly connecting different software platforms, integrations enable the automatic exchange of data, ensuring data consistency and accuracy. Integrations facilitate real-time updates and synchronization, enabling practitioners and auditors to access the most up-to-date data.

EHR systems offer invaluable assistance when it comes to organizing and managing all the data and records required for audits, including enhanced accuracy, transparency, and accountability. They centralize all relevant data, making it easily accessible while also being stored securely. This centralization can be an especially big benefit for practices with multiple locations. By leveraging EHR systems, practices can generate detailed reports and audit trails, proving compliance and reducing the likelihood of human error.

Embracing technology for compliance can help behavioral health practices navigate regulatory complexities with confidence.

## The Role of Internal vs. External Audits in Behavioral Health

Audits safeguard both patients and practices against potential harms. Ensuring compliance through audits protects patient confidentiality, maintains the integrity of financial transactions, and upholds the highest standards of care. Navigating internal vs. external audits successfully provides practices with a chance to remedy any deficiencies or discrepancies. By identifying areas for improvement and implementing corrective actions, audits enhance care delivery, ultimately improving patient outcomes and satisfaction.[/vc_column_text][/vc_column][/vc_row]

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## Tags

- depression
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