Federal reviewers, state regulators, and compliance officers sit across the table, ready to dissect years of your organization’s records. For most healthcare administrators, this scenario feels like a nightmare. Thomas Stedham spent over a decade as a healthcare administrator, navigating high-stakes audits, and learning that audits do not have to be feared when you prepare correctly. Audits that demonstrate credibility come down to three disciplines: preparation that starts months before auditors arrive, regulatory fluency that allows you to control the narrative, and transparency that builds trust even when issues surface.
Preparation Is Your Best Defense
The most successful audits start months before auditors arrive. They involve building organized systems for documentation, confirming records are accurate, and running internal mock audits to identify issues before external reviewers do. “When my team uncovered boxes of archival records that did not meet current compliance standards, we didn’t wait,” Stedham explains. “We corrected the problem immediately. That proactive approach turned a potential liability into a compliance win.”
Most organizations discover compliance gaps during external audits when it is too late to fix them without consequences. The finding goes into the report, the organization scrambles to develop corrective action plans, and leadership credibility suffers because auditors found problems internal systems should have caught. Running internal mock audits changes this dynamic entirely. Assemble a team that thinks like external auditors, people who question whether documentation truly proves compliance, whether day-to-day processes match stated policies, and whether controls reduce the violations auditors typically find.
When Stedham’s team discovered archival records failing current standards, they still had time to assess the scope, build a remediation plan, implement corrections, and document the process. When external auditors arrived, the issue was framed as historical context rather than an active compliance failure. That difference matters because it signals commitment to compliance, not reactive scrambling once a problem is exposed.
Understand the Rules Inside and Out
Audits evaluate alignment with federal and state regulations. If you do not know the rules, you cannot demonstrate compliance. “I’ve guided teams through the transition following pandemic-era policy changes when suspended policy rules came back into play,” Stedham notes. “Success came down to one thing: translating complex regulations into clear operational steps.” Regulatory compliance fails most often not because organizations ignore rules, but because staff do not understand how regulations translate into daily operations. A regulation requiring appropriate supervision means little until it is defined in specific terms, including supervision ratios, documentation requirements, and escalation protocols when ratios cannot be met.
Working through post-pandemic policy transitions, Stedham saw organizations struggle when suspended regulations were reinstated without clear guidance on implementation timelines or documentation requirements. Teams that succeeded translated regulatory language into operational expectations. They identified which policies needed updating, by when, which staff needed training on revised requirements, and which documentation would prove compliance once the rules were back in force.
“When you know the rules, you control the narrative,” Stedham emphasizes. Controlling the narrative means being able to explain to auditors why your organization’s approach satisfies regulatory intent, even if implementation looks different from what auditors expected. That requires understanding not only what regulations say, but why they exist and what outcomes they are designed to achieve.
Lead With Transparency and Confidence
Auditors evaluate accuracy, but they also evaluate integrity. When issues arise, acknowledge them and show corrective measures already in place. “During a multi-million dollar contract review, transparency with auditors allowed us to resolve gaps quickly and maintain credibility,” Stedham explains. “Confidence, grounded in preparation and honesty, builds trust even during the most stressful reviews.” The instinct when auditors find problems is defensiveness. Teams try to explain why the issue is not as serious as it appears, why circumstances made compliance difficult, or why the finding is technically incorrect. That approach erodes credibility faster than the underlying compliance failure ever could.
Transparency means acknowledging the issue plainly, explaining the root cause without excuses, and describing corrective actions already underway. When Stedham’s team faced gaps during a contract review, they did not minimize or deflect. They confirmed the gaps, explained what caused them, and demonstrated the measures in place to prevent recurrence.
Every Audit Proves Commitment
High-stakes audits do not have to be overwhelming when approached with the right mindset. “Every audit is a chance to prove not just compliance, but commitment to quality, to patients, and to public trust,” Stedham concludes. “Approach it with confidence and the outcome will reflect the effort you’ve invested.” Organizations that prepare months before auditors arrive, understand regulations well enough to control the narrative, and lead with transparency when issues surface can turn audits from nightmares into opportunities that demonstrate credibility and accountability.
Connect with Thomas Stedham on LinkedIn for insights on managing high-stakes audits.
