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Question: I鈥檓 reading more about compliance and recently saw the term 鈥渄iligence audit.鈥� Is this a specific type of audit? Shouldn鈥檛 all audits be conducted with diligence?

Minnesota Subscriber

Answer: Diligence audits, which are especially deep dives conducted for purposes of verification, are typically reserved for specific situations.

Three situations in which a diligence audit might make sense include during the onboarding process for a new provider, buying another practice, or selling a practice. In each situation, the diligence audit should be a particularly close evaluation and analysis of pertinent information.

For example, during the onboarding process, you want to know exactly what a new provider is bringing to the table and how exactly they鈥檒l be utilized within the practice once working.

When buying or selling a practice, you鈥檙e looking very carefully at the financial information involved, because the success or failure of a medical practice 鈥� regardless of the skill of the practitioners 鈥� comes down to the financial health of the business. Figuring out the motivations of buying or selling can be really helpful, too, in determining whether buying or selling makes sense for the person or entity interested in acquisition.

For example, if an organization is interested in buying a solo primary practice that is making lots of money, it can seem like an uncomplicatedly good idea. But a diligence audit may reveal that the practitioner is actually performing surgeries as well, which bring in more money, and anyone who purchased the practice may need to hire another provider 鈥� at greater cost 鈥� to continue to earn the same amount of money that the solo provider, with their particular skillset, managed alone.

Rachel Dorrell, MA, MS, CPC-A, CPPM, Development Editor, 星空入口