How to Build a Corrective Action Plan (CAP) for Audits: A Complete Guide

Audits are a critical part of compliance and quality assurance in healthcare, but they’re only effective if organizations take meaningful action on the findings. Whether the audit is internal or external, developing a Corrective Action Plan (CAP) helps you address issues at the source to reduce risk and continuously improve your operations.

What is a Corrective Action Plan?

Corrective Action Plan Definition

A corrective action plan is a systematic, step-by-step set of actions designed to address one or more issues with compliance or underperformance after an audit. The CAP is a team roadmap to prevent recurring issues and increase organizational performance.  

A corrective action plan is a critical quality management tool hospitals can use in tandem with audit findings. CAPs can be used to follow up both external and internal audits.

When Do You Need to Create a CAP?

A CAP can be created any time a problem is identified and must be changed. However, CAPs are usually implemented whenever an audit (internal or external) identifies noncompliance, risk exposures, billing process gaps or operational inefficiencies.  

External bodies (like CMS, OIG, or commercial payers) often require a CAP submission as part of a post-audit response. For internal audits, CAPs help keep the team on the same page to fix errors before they are audited externally.  

Why Are Corrective Action Plans Important?

A CAP does more than address one specific problem. When developed and executed correctly, CAPs provide the following benefits:

Promoting Organizational Culture

A corrective action plan allows the team to immediately take corrective action when a problem is discovered. It also allows for corrective actions to be tracked and reported on over time, promoting a culture of continuous improvement throughout the organization.  

Ensure Regulatory Compliance

Healthcare organizations operate in a heavily regulated environment. CAPs help demonstrate that an organization is taking active steps to comply with federal, state and payer requirements. This can drastically reduce the risk of future compliance slip-ups, reducing liability and mitigating risk.  

Prevent Repeat Audit Findings

CAPs address not just the symptom (e.g., a missing signature), but the system that allowed the error to happen in the first place. By targeting the root cause and tracking improvement over time, providers reduce the likelihood of the same issue reappearing in a future audit.

Protect Financial Integrity & Patient Trust

CAPs help providers achieve revenue integrity, which gives a financial foothold for excellent patient care. Improved conditions and financial stability lead to better patient-provider relationships and underscore the provider’s commitment to delivering high-quality care.

Important Elements of an Effective Corrective Action Plan

Root Cause Analysis

This is a critical first step, and it goes far beyond just identifying the problem. A problem can be fixed temporarily, but it will always come back unless the root cause is identified and addressed. Remember: treat the cause, not the symptoms.  

For example, an internal audit may find a procedure is being miscoded more than 20% of the time. Instead of keeping an eye out in the future or correcting existing documentation, ask specific questions, such as:  

• Do any specific coders or providers keep making this mistake?

• How long has this been occurring?

• Is there anything about this procedure that would invite miscoding?

• Have coders been trained appropriately on this procedure in the past?  

The more specific the better, as the answers will help identify the root cause of the issue. The analysis may also uncover adjacent issues that can be addressed in the same CAP.  

Specific, Measurable Actions

Once you have identified the cause(s) of the problem, outline the corrective actions your team will take next. Consider this your “roadmap” to the desired outcome. There is an art to selecting CAP actions. They must be specific, measurable, and high-priority.  

Vague language like “staff will be retrained” isn’t enough. Your corrective actions should be concrete and measurable, such as “90% of clinical documentation will meet audit standards within 60 days.” This makes it easier to track progress and prove compliance.  

It’s also very easy to brainstorm an unlimited number of actions. However, the final list should be limited to the least possible number of actions that will have the greatest impact in the allotted time. You can’t reinvent the organization in a month, but you may be able to update a policy and provide staff training in that time.

Clearly Assigned Responsibilities & Deadlines

Once you have determined your actions, one or more staff members must be assigned to each one. Everyone should clearly understand their roles and task within the CAP to ensure accountability.  

Each task should also be assigned a deadline for completion. This deadline should be realistic based on the team’s available time and resources. Throughout the process, staff should be encouraged to communicate with leadership and with one another on project updates and concerns.  

Proper Documentation & Monitoring

A CAP cannot officially end without verification of success. Before implementation, develop a system to monitor plan progress and measure successes. Regular follow-up reports should be distributed to relevant staff and stakeholders to track CAP progress.  

Most importantly, CAP progress should be documented from start to finish. Everything mentioned above, including root cause analysis and task responsibility, should be documented appropriately until reports indicate success. This supports continuous improvement and creates a paper trail for internal leadership and external auditors.

How to Create a Corrective Action Plan for an Audit

Putting it all together, the process of creating and implementing a CAP should look like this:

Step 1: Review & Analyze Audit Findings

Though a CAP can be started at any time, its most useful to create one after an internal or external audit. Gather all audit findings in one place and review the results to determine areas with the highest risk. Start the documentation process here by summarizing each problem clearly so all stakeholders understand the issue at hand.

Step 2: Identify & Find the Root Causes

Dive deeper. What exactly is causing the problems identified in step one? Ask and answer specific questions to determine the systemic or human factors that caused the issue. Document these findings accordingly.

Step 3: Clearly Define the Corrective Actions

Now that you know what you’re up against, create the meat of any CAP: the actions. Document each action you and your team will take to address the issue(s). Make sure each action is SMART: Specific, Measurable, Achievable, Relevant, and Time-bound.

Step 4: Assign Responsibilities & Allocate Your Resources

Break down each task into its smallest parts and assign a staff member to oversee its completion (keeping in mind available resources). You may assign multiple staff members to one task, but it’s best for project management purposes to hold just one person responsible for completing and reporting out on the task.  

Step 5: Establish Timelines for Corrective Actions

Assign each task and its allotted staff member a deadline. Prioritize the most important actions while remembering that some actions may require others to be completed before starting. For example, you can’t train staff on a new policy until that policy is written and approved. Be realistic when assigning deadlines—quick fixes can sometimes do more harm than good.

Step 6: Monitor the Effectiveness of Your Plan

What will success look like? How will you measure success as the plan moves along and how will you know when it’s officially been completed? Based on your desired outcome and list of actions, develop benchmarks and key performance indicators in advance. Set up systems to measure them before the project begins.

Step 7: Implement Your Corrective Action Plan

Once tasks are assigned, team members understand their roles, deadlines are realistic and benchmarks are ready to monitor, it’s go time. Begin executing on your CAP.

Step 8: Document & Report Progress

As your monitor the success of the CAP through spot-checks and regular reporting, continue to document progress. This paper trail will prove to external auditors that your organization is working to fix the issue. It can also be used internally to communicate with stakeholders and adjust the plan as needed if any barriers arise.

Step 9: Standardize Improvements & Close the Loop

Once each task is completed, reports are run and the CAP has successfully resolved the issue, make it official. Ensure policies and training materials are updated to reflect any needed changes and keep improvements as part of standard practice. Celebrate your progress with a final report and appropriate praises for team members, then start on the next CAP!

Step up your audits

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