Financial controls are the routines that make sure transactions are authorized, recorded accurately, and reviewed. In healthcare, where billing rules are complex and payroll is usually the largest expense, they protect both revenue and reputation. The controls below apply to organizations of almost any size.
1. Segregation of duties
Divide key tasks so that no one person controls a transaction from start to finish. For example, the person who posts payments shouldn't also reconcile the bank account, and the person who adds a vendor shouldn't also approve payments to it.
2. Monthly reconciliations
- Bank and credit card accounts to the general ledger
- Accounts receivable in the billing system to the general ledger
- Payroll registers to the general ledger and to verified hours or services
- Remittances to deposits
3. Payroll controls
Require approved timesheets, document every pay rate change, review new and terminated employees each pay period, and compare payroll hours with the services actually delivered.
4. Billing controls
Confirm documentation and authorizations are in place before claims are submitted, review a sample of claims each month, and follow up on denials and underpayments consistently.
5. Disbursement controls
Set approval limits for payments, verify any change to a vendor's bank details by calling a known contact, and ask your bank about fraud-prevention services such as positive pay.
6. System access reviews
Review who can access billing, EHR, payroll, and accounting systems at least quarterly, and remove access promptly when someone leaves.
7. Exclusion screening
Organizations that bill federal healthcare programs commonly screen employees, contractors, and vendors against the HHS Office of Inspector General's List of Excluded Individuals/Entities and state Medicaid exclusion lists, often monthly.
8. Documentation and management review
Keep supporting records organized and retained according to your payer contracts and applicable rules. Each month, leadership should review the financial statements and ask for explanations of significant changes.
Right-sizing for smaller organizations
Small teams can't always separate every duty. In that case, compensating controls help: the owner reviews bank statements and payroll registers directly each month, approves vendor changes personally, and has an outside accountant reconcile the books.
Our compliance and internal controls services help healthcare organizations design and test controls that fit their size. See also our healthcare financial management services.
This article is general information, not legal, tax, or regulatory advice. Requirements vary by state, payer, and organization type.