Most hospitals have an audit policy that they try to impose on all medical bill auditors who attempt to do business with them, including those who work for insurance companies, those who work for accounting firms and those who are independent contractors.

The typical hospital audit policy sets forth the following requirements:

•  Audits must be conducted "on site," i.e., at the hospital.

•  Audits must be scheduled within a specified time period -- often as little as thirty days -- after final hospital billing and must be completed within a specified time period -- often as little as sixty days -- after final hospital billing.

•  Most of the bill -- a typical requirement is 95% -- must be paid before an audit will be scheduled.

•  An audit fee, generally in the $150 to $300 range, must be paid to the hospital before a scheduled audit will be conducted.

•  No medical records will be made available to the outside auditor prior to the time of the audit.

•  The hospital's auditor will conduct a complete audit of the bill prior to the scheduled audit and will add to the bill any unbilled charges and undercharges that he or she discovers during that prior audit.

•  The hospital's auditor and the outside auditor must sign a final agreement establishing the proper amount of the bill at the conclusion of the audit. If they fail to reach an agreement, the hospital reserves the right to bill the patient immediately for any amounts due, as established by the hospital's auditor.

•  Outside auditors must meet certain qualifications established by the hospital before they will be permitted to participate in audits at the hospital.

•  The remuneration of outside auditors must not be structured so as to create incentives for them to produce what the hospital considers to be questionable audit findings, i.e., contingency fees will not be permitted.

We believe that such hospital audit policies, aside from being incredibly arrogant, discriminate against independent auditors by setting up conditions that make it impossible for independent auditors to function in the best interest of their clients. Such policies are a blatant attempt by hospitals to prevent the auditing of their bills by independent auditors or, failing that, to minimize the effectiveness of independent auditors. As such, the policies are an indirect admission by hospitals that their bills are riddled with errors and overcharges.

We decided that the proper way to respond to the widespread proliferation of hospital audit policies was to develop an audit policy of our own. The audit policy we developed consists of the following points:

•  Every hospital has a legal and moral obligation to provide each one of its patients with a bill that is accurate, complete and absolutely reflective of the treatment and care that the patient received.

•  If the patient, the patient's insurer or a third party -- such as an independent auditor -- authorized to act on behalf of the patient or the insurer, raises questions about the accuracy or validity of a hospital bill or of any charge in a hospital bill, the hospital has a legal and moral obligation to answer those questions and, if necessary, to adjust the bill.

•  We conduct audits of hospital bills only "off site," i.e., in our offices, in comfortable and familiar surroundings, where we can work at our own pace, with our audit tools and reference materials readily available and with easy access to our colleagues, because doing so is in the best interest of our clients.

•  We audit a hospital bill using whatever documents the hospital has provided our client -- ideally, an itemized bill of charges and a photocopy of the complete medical records of the hospitalization. If we have a summary bill but no itemized bill, or if we have no medical records, we dispute all of the charges contained in the bill.

•  We refuse to pay an audit fee to any hospital for the privilege of pointing out to the hospital the errors and overcharges that we discover in one of its bills.

•  When we prepare our audit findings with regard to a hospital bill, we do not include information about any undercharges or unbilled items that we discover while conducting our audit of the bill.

•  We tell our client not to pay any portion of a hospital bill that they have us audit until after we have completed our audit and have submitted our audit findings to the hospital.

•  After we submit our audit findings to the hospital, we tell our client to pay the undisputed portion -- only the undisputed portion -- of the bill. We tell our client not to pay the disputed portion of the bill until after we have come to an agreement with the hospital as to the proper disposition of the disputed charges. If the hospital agrees to remove all of the disputed charges from the bill, of course, our client owes the hospital nothing.

•  If a hospital refuses to provide our client with an itemized bill or medical records, or if it refuses to answer our questions or to honor our audit findings with regard to a bill that we are duly authorized to audit, we may file a complaint against the hospital with one or more of the following: the U.S. Attorney in the district in which the hospital is located, the Office of Inspector General of the U.S. Department of Health and Human Services, the Joint Commission on Accreditation of Healthcare Organizations, the Employee Benefits Security Administration of the U.S. Department of Labor and any other agency that we believe has jurisdiction over the hospital.

•  If we have to file a complaint against a hospital, we do our utmost to disseminate information about the matter throughout the area in which the hospital is located in order to make the public aware of the hospital's improper billing and auditing policies and practices.

•  We reject any attempt by a hospital to question our qualifications, how we are remunerated or any other aspect of our business.

Our standard procedure now is to conduct only pre-payment "off-site" audits. Once we have prepared our audit findings, we submit them to the hospital and have our client pay the undisputed portion of the bill. We give the hospital sixty days to provide us with a substantive response to our audit findings.

If the hospital responds to our audit findings in a substantive and timely fashion, we negotiate with it until we come to an agreement about the proper disposition of as many of the disputed charges as possible. We then have our client pay the charges, if any, that the hospital has validated and that we no longer dispute. We tell our client not to pay any of the remaining charges, whether or not the hospital has agreed to remove them from the bill, and to consider the matter closed.

If the hospital does not respond in a substantive and timely fashion, or if it does not negotiate in a reasonable and proper manner, we tell our client not to pay the disputed portion of the bill and to consider the matter closed. Disputed charges that a hospital is unwilling or unable to validate are, by default, invalid charges. Under those circumstances, the hospital cannot invoice the patient for the disputed portion of the bill without opening itself to charges of fraud; its only recourse is to sue our client for nonpayment, which is a lawsuit that is extremely difficult for it to win.

We want to do the best job that we can for you, and we think that we have found the way to do it. Please call us at (877) 679-7224 or send us an e-mail to find out how to put us to work saving you money on your hospital bills.

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