financial audits & iva updates · iva entity shall be capable of performing audit and ensuring...

©2015 Cognisight, LLC

Health Insurance Exchange:

Financial Audits & IVA Updates September 1, 2015

Presented by:

Kim Browning, CHRS, PMP, CHC Executive Vice President


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Commercial RADV

o Overview

o Six Stage Process

Financial Audit Protocols

Fall Guidance Expectations

Early Themes & Trends

Selecting Your IVA Vendor

o What to Look For

o What to Avoid

o Approval & Regulatory Requirements

Best Practices

Q&A

Agenda


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Commercial

RADV


Sample Selection

Initial Validation Audit (IVA)

Secondary Validation Audit (SVA)

Error Estimation

Appeals

Payment Adjustments

Independent Vendor

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Risk Adjustment Data Validation (RADV)

o Six-stage process proposed to begin in 2015

HHS

HHS or Designees

HHS or Designees

HHS

Commercial RADV: Overview

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3

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5

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HHS requires bi-directional review of charts

o Verify what’s already been submitted

o Capture what hasn’t been submitted

Commercial RADV: Six Stage Process—Sample Selection

1/3 Demographics

2/3 HCCs

• Substantiate HCCs • Missed HCCs • Basic demographic audit • Did risk adjustment get paid

correctly?

• Missed HCCs • Source documentation

level audit of enrollment • Did member get enrolled

correctly? • Subsidy: not in scope


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EDI TX type from exchange

Clean?

Augmented with paper?

Other?

Enrollment off exchange

Paper?

EDI?

Combo?

Other?

Mass transfers

No?

Yes? May need source documentation.

Pre snapshot

Mapping logic

Post snapshot

Commercial RADV: Six Stage Process—Sample Selection, cont.


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Enrollment access needs

o Member name

o Gender

o DOB

o County

o Metal level for

• Enrollment periods 01/01/14–12/31/14 or portions thereof

o Field translations

Options

Enrollment file of sample members only?

Read only access to enrollment system?

Generic Cognisight IVA auditor IDs

Commercial RADV: Six Stage Process—Sample Selection, cont.


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Why Initial Validation Audits (IVAs) are necessary

o Risk adjustments are zero based

• For every winning issuer, there’s a losing issuer

o Better risk scores than your competition’s influences a better “transfer payment”

o As a result, there is an incentive to game the system

o HHS instituted IVAs for every issuer, every year as a deterrent to gaming the system

Original March 30, 2015 selection date deferred by HHS

o Now expected in Spring 2016

Recommended requirements

o Certified coders

o Senior reviewer

• Review “errors”

• Inter-rater reliability

~ 95% for both demographic and HCCs

• Five years medical coding experience

Commercial RADV: Six Stage Process—IVA


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Subset of IVA

o Audit of the auditors

o Three outcome scenarios

•

•

•

Expanded SVA

SVA =

IVA

IVA findings applied

SVA ≠

IVA

Expanded SVA

SVA findings applied

SVA ≠

IVA

SVA ≠

IVA

SVA =

IVA

IVA findings applied

Commercial RADV: Six Stage Process—SVA


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HHS will determine error impact

o Drive issuer level risk score adjustment and confidence

o Used to adjust the average risks score for each risk adjustment eligible plan offered by issuer

o HHS to provide each issuer with enrollee level audit results and errors estimates

o Methodology re-applied in SVA

Commercial RADV: Six Stage Process—Error Estimation


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HHS evaluation approaches

o Begin SVA for those whom IVA is done even if IVA is not complete

o Wait until completely done

Commercial RADV: Six Stage Process—Appeals


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PLRS is normalized as part of the calculation

o Issuers risk score adjustments depends on magnitude and direction

o Compared to average risk score error adjustment and directions for entire market

Safe harbor for 2015

Commercial RADV: Six Stage Process—Payment Adjustments


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Financial Audit

Protocols


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Financial Audit Protocols

All HIX issuers will be audited annually o If operating in multiple states, RADV conducted in each state

200 member sample for ≥1,000 members o 100 member sample for 100–999 members

• Guidance pending for <100

o 2/3 driven by HCC, 1/3 by demographics

o Sample is combined on/off the exchange

Audits are bi-directional o Substantiate submitted HCCs and identify missing HCCs

• Including demographic sample

IVA cannot be HIX risk adjustment vendor

HCC

Demographics


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Issuers must provide HHS the IVA entity’s name, qualifications, and relationship to issuer

o Deadline to provide above pushed back to Spring 2016

Issuers cannot waive obtaining an IVA

Data pulled from EDGE server used for sample

IVA provides audit outcomes to HHS

o Not to the issuer

o Not expected to be via EDGE server

Financial Audit Protocols, cont.


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IVA entity shall be capable of performing audit and ensuring accuracy of risk adjustments in accordance with standards

Able to complete IVA and submitted IVA findings to HHS in manner and timeframe specified by HHS

Free of conflicts of interest

Must use CCS’, CPCs, or RHITs

For every incorrect HCC, a secondary review has to be conducted by a senior person

Financial Audit Protocols, cont.


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Fall Guidance

Expectations


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CMS published revised RADV timeline on July 16, 2015

Same duration of time for all stages of RADV process despite shift in timeline

Surge in market expected when HHS announces new timeline and vendor selection notification

o Recommend choosing IVA auditor as soon as possible to ensure security of best in class vendor

Fall Guidance Expectations


Fall 2015

Winter 2016

Spring 2016

Fall-Winter 2016-17

Winter

2017

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Revised HHS RADV timeline1

Summer-Fall 2016

RADV Training Choose IVA Vendor IVA Vendor Selection to CMS

IVA Conducted SVA Conducted

Fall Guidance Expectations, cont.

Preliminary RADV Data Released

1 Based on 07/16/15 REGTAP FAQ # 11290


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Early Themes

& Trends


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Validation awareness

o Average dx to verify 1.60–2.25

o Validated dx 43–44%

o Invalid dx’s 56–57%

• No documentation found 78–82%

• Invalid codes 10–13%

• Provider/chart mismatch 8%

• Top HCCs

11 Colorectal, breasts (age <50), and prostate

21 Diabetes without complications

12 Breast ( age 50+) and prostate

82 Drug dependence

9 Lung, brain, and other severe cancers

183–188 Kidney transplant, ESRD, and CKD stages 4 and 5

130 CHF

20 Diabetes with complications

Early Themes & Trends


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Safe harbor for Benefit Year 2015

Subject to other review oversight • Fraud, Waste, and Abuse Act

• False Claims Act

• OIG audits

• State Insurance Department audits

• Department of Health audits

Early Themes & Trends, cont.


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Selecting Your

IVA Vendor


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Knowledge and understanding of rules

o Has your vendor read, digested, and operationalized rules?

o Can vendor explain how rules are applied to audit scope?

Prior audit experience

o Has vendor previously conducted any Medicare or Medicaid risk adjustment audits?

o How recently have they completed the audit?

o Do they have “bi-directional” audit experience (i.e. capturing missing diagnoses and verifying existing diagnoses)?

Audit staff o Can vendor document their auditors credentials?

o Does vendor outsource any of their work to other firms?

• To be expected due to episodic/seasonal nature of the RADV

Selecting Your IVA Vendor: What to Look For


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Quality control efforts

o What percent of captured information is re-reviewed?

• Varies between 10–100%, depending on vendor

Reusability

o Is vendor willing to re-use prior analytics?

Chart retrieval

o Does vendor offer chart retrieval?

• If so, how many charts are they willing to retrieve?

Fee structure

o Are there any hidden fees?

o Does vendor support audit through completion of SVA?

o Does vendor charge implementation or reporting fees?

Selecting Your IVA Vendor: What to Look For, cont.


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Testing

o As part of your selection process, “test” vendor

• Review results and compare vendors

Process improvement

o After audit completion, will vendor have provided info to help issuer address any risk points?

o Does vendor understand demographic portion of IVA and have experience in enrollment auditing?

• Can be more than one transaction

o Does vendor validate based on coding guidelines?

• Clinical arguments will not stand

Selecting Your IVA Vendor: What to Look For, cont.


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Waiting too long to select your vendor

o Limited number of strong vendors; risk of being left to choose from second tier

General audit versus risk adjustment audit experience

o Risk adjustment audit experience in particular will help IVA vendor be successful

Choosing lowest priced vendor based on price only

o The financial impact of a poorly run IVA isn’t worth the risk

Not asking what’s outsourced

Vendors that can’t execute end-to-end

o Increased risk points if too many components are outsourced

Selecting Your IVA Vendor: What to Avoid


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Issuers o Must use third party vendor o Cannot have financial interest in IVA entity and vice versa

• Including management, team members, families, etc.

o Directors and officers cannot serve on board of directors of IVA entity and vice versa

IVA entity o Team members cannot have recently been director or officer of issuer o Members assigned to issuer cannot be married to issuer directors or

officers o Cannot have role in establishing internal controls of issuer related to

ACA-HHS operated RADV process or serve in any capacity as advisor o Cannot have had role in executing ACA-HHS operated RADV process for

issuer o Must be § 153.630 compliant

Selecting Your IVA Vendor: Approval & Regulatory Requirements


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Best Practices


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Consider reusing internal analytics, if available

o As long as analytics meet criteria

Reuse as many existing charts as possible

Choose the best medical record analytics identifies—but be willing to pursue alternate charts if the best medical record isn’t successful

Consider onshore coders only

o HIPAA doesn’t protect data outside US

Best Practices: Initial Validation Audits


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Experience with issuer enrollment auditing and tying back to ensure vendor has source documentation, when necessary

o More than simply member eligibility

o Verify items that affect risk adjustment payment

o Mass programmatic changes

Determine what can be done now

o Preassemble your team

o Begin set up of SFTP test file exchanges with vendor(s)

o Determine enrollment sources

o Plan out different scenarios

o Anticipate needs for BAAs and third party data release agreements and secure in advance

Best Practices: IVAs, cont.


IVA

SVA

On

Standby

On

Standby

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Not Expected

Not Expected

Not Expected

Preassemble team

Best Practices: IVAs, cont.


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The best SVA defense is a great IVA offense

o Bulletproof the IVA

Be armed with guidelines, coding clinic, and other reference materials

Expect shared learnings

Be timely with additional requests

Respect differences

Best Practices: SVA Readiness


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For more information, please contact:

Kim Browning [email protected] 585.662.4215 www.linkedin.com/in/kimbrowning1

Q&A

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