Providers prefer payer audits that use tech to make it easier

Providers can’t stand payer audits, but those that use technology to manage the experience can find that it makes a difference.

The study, entitled “Payment Integrity Programs: A National Study on the Impact of DRG Audits on Provider Sentiment and Abrasion,” found not only are audits time-consuming and frustrating, but they are costly. Frost & Sullivan conducted the research, which was commissioned by vendor Change Healthcare.

Some eight percent of providers spend more than of $1 million on post-payment audits each year, the survey found. Another 10 percent spend from $500,000 to $1 million, and 46 percent spend $500,000 or less annually. Four out of 10 providers (37 percent) surveyed said they don’t know what the audit process costs their organizations.

The study was based on interviews with 1,100 short-term acute care hospitals in the U.S.

“The message for payers is clear,” says Dave Cardelle, vice president of payment integrity and coding advisor solutions for Change Healthcare. Payers are advised to adopt “innovative, provider-friendly techniques” to improve their relationships with providers, while still meeting their audit requirements.


The goal is “to make something inherently objectionable to providers less intrusive and more cost-effective for both parties.”

The research points to new ways payers can help providers reduce the time, cost and discontent incurred by audits, authors of the study say.

Those surveyed indicated that the use of pre-submission notification—or alerting providers of potential errors before the claim is submitted—improves accuracy and reduces the potential for a post-payment audit. Some 43 percent of the providers surveyed say pre-submission notification helped to reduce administrative burden and costs associated with the audits. Another 44 percent of those surveyed say they prefer pre-submission notification, compared with 21 percent who prefer post-payment reviews.

The survey also found that 50 percent of providers consider some audit vendors better than others, specifically highlighting those that require fewer records and give comprehensive responses as being most preferred. Some 27 percent of the organizations surveyed rated their overall DRG audit experience with third-party vendors as “negative.”

Half of the providers surveyed said they have a “clear preference” for working with payers or auditors that communicate thoroughly during a DRG audit, request fewer records, provide comprehensive responses to appeals and use staff with medical degrees.