1. Formal, methodical examination or review done to inspect, analyze, and scrutinize the way something is being done (e.g., bookkeeping practices, medical record documentation, insurance claim filing) to determine operational efficiency. 2. In the Medicare program, a process to ensure that the fiscal intermediary reimburses providers based only on costs associated with patient care.
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Some policies (such as workers compensation) are written subject to an audit. Since workers compensation premium is based on the insured’s payroll, the insurer is entitled to audit the insured’s records at the end of the policy to verify that it has collected an adequate premium for the amount of payroll to which it was exposed.
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US: A survey of the financial records of a person or organization conducted annually (in most cases) to determine exposures, limits, premiums, etc.
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Survey of an insured’s records to determine the premium which should be paid to the Insurer for protection furnished and perhaps for other purposes, such as compliance with loss control recommendations.