As dry as the decision may appear, insurers literally have millions of dollars on the line when CMS comes knocking. That makes picking the right auditor, and doing so the first time, absolutely critical.
The Centers for Medicare and Medicaid Services is going to kick off risk adjustment data validation audits this year.
CMS, in so doing, requires that issuers enlist independent auditors before it comes in to conduct a secondary validation audit.
"Selecting a qualified independent vendor for this highly complex, time-consuming audit is a challenging task in this new and rapidly changing market," Altegra Health vice president Lisa DiSalvo wrote on sister site Government Health IT. "This important decision could impact millions of dollars in payment transfers if an auditor does not thoroughly and accurately review all audit data."
DiSalvo goes on to share seven characteristics to look for in an independent auditor.
1. Coding resources. IVA vendors will be competing for coding resources, especially in demand due to the transition to ICD-10. Assure the IVA has a solid and sufficient pipeline for experienced, certified chart auditors.
2. External Data Gathering Environment (EDGE) servers. IVA vendors who have experience with the CMS EDGE data transformation and error management processes have an advantage since audit data will be provided by CMS to issuers via the EDGE server process.
3. 834 enrollment files. For the Marketplace enrollees in the IVA sample, the audit will review source 834 data, the HIPAA-compliant format for transferring plan benefit enrollment information to EDGE-compatible data. A vendor experienced with 834 data, specifically for plan enrollment on the insurance exchanges, is essential.
4. 837 claims and CCD data. When evaluating IVA vendors, selecting a vendor with claims data audit experience is important. Consider expanding the claim audit to include a data trace from the provider EHR through the clearinghouse to the 837 claims adjudication to the EDGE server transformation. This audit expansion can help identify missing risk adjustment data and improve scores for the current benefit year.
5. ACA risk model. IVA auditors should have experience with the new ACA risk model and be able to calculate the revised enrollee risk score, compare and report the variance to the CMS reported risk score and estimate the impact to the Plan Level Risk Score (PLRS) to revise the funds transfer calculation following the audit.
6. Auditing methodologies. Auditors trained in generally accepted government audit standards (GAO "Yellow Book") are ideal, but so are professionals who can support standards from the American Institute of Certified Public Accountants, the Institute of Internal Auditors, and the Information Systems Audit & Control Association.
7. Service. Look for an IVA audit partner that can create a project management team consisting of a managing director, an engagement manager and a team of subject matter experts in the various areas of healthcare operations including, but not limited to claims data review, medical record documentation, education and training, and the technical skills required to complete the project.