Healthcare entities that enter into cor- porate integrity agreements (CIAs) or integrity agreements (IAs) with
the U.S. Department of Health and Human
Services Office of Inspector General (HHS
OIG)1 typically have various corporate integ-
rity obligations. These obligations often
mandate the engagement of an Independent
Review Organization (IRO) and
in some cases also a compliance
expert to the Board. The IROs most
often must conduct either claims
reviews or arrangements reviews,
or both. IROs must be profession-
ally independent and objective and
follow the most recent Government
Auditing Standards issued by the
U.S. Government Accountability
Office (GAGAS or Yellow Book standards).
Although compliance experts typically are not
specifically subject to GAGAS, they still must
conduct impartial reviews of the compliance
program. In the context of the review, they
can provide expert advice and recommenda-
tions to the Board. CIAs often mandate that
the Board certifies in an annual resolution
that they made reasonable inquiry that the
organization has implemented an effective
compliance program. The compliance expert’s
compliance program review report supports
IRO claims reviews as well as compliance
expert reviews may lead to the detection of
deficiencies, which in turn can imply overpayments made by federal healthcare programs
(e.g., Medicare, Medicaid, Tricare, and VHA).
Some of these identified overpayments may
even require extrapolation. However, at what
point exactly an extrapolation becomes necessary is all but clear cut, and the CIA language
has changed significantly in recent CIAs
(2015/2016) on this very matter. This warrants
careful consideration. A healthcare entity
under CIA may want to review internal procedures to address extrapolations in claims
auditing and monitoring and assess preparedness for making the right decision.
IRO claims reviews with the
5% error rate — Then
In the past, the instructions for IRO claims
reviews in most CIAs stated that the IRO
must extrapolate whenever the error rate in
the randomly selected discovery sample of
paid claims was equal to or exceeded a 5%
threshold. The error rate was defined as the
percentage of net overpayments identified
by, Cornelia M. Dorfschmid, PhD, MSIS, PMP, CHC
IRO claims reviews revisited
» Independent Review Organization (IRO) claims review requirements in recent corporate integrity agreements (CIAs)
have changed significantly.
» The 5% error rate is no longer used to determine overpayment extrapolation in CIAs.
» Entities under CIA, not IRO, must determine whether to extrapolate.
» The CMS Overpayment Rule is critical in the determination.
» Recent CIAs require IROs to focus more on medical necessity of items and services.
Cornelia M. Dorfschmid ( email@example.com) is Executive Vice
President, Strategic Management Services, LLC in Alexandria, VA.