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Health Plans: Choose Your Initial Validation Audit Vendor Wisely

By Anita Nair Hartman/Tuesday, March 21, 2017


For health plans, the time to select an initial validation audit (IVA) vendor is drawing near. Selecting a qualified vendor should be a thoughtful and informed process. If the audit shows a plan’s EDGE data are not valid and have risk score-impacting errors, the Centers for Medicare & Medicaid Services (CMS) may act to scale down the plan’s premium risk transfer payments, which may incur negative results for the plan’s financial performance. As a CMS-accepted IVA entity, we’ve been partnering with health plans to meet this requirement since the law was implemented.

CMS developed IVA requirements to help ensure that accurate and complete membership and risk adjustment information is submitted by health plans to the EDGE servers for eventual payment transfer calculations. According to the regulations, qualified commercial health plans must have an independent auditor with certified coders review medical records for 200 random members (or less if the Finite Population Analysis applies to the issuer) selected by CMS and must validate the enrollment and the diagnosis codes submitted. The deadline to select a vendor for this year is April 28, 2017.

 Medical records review is a critical part of the validation process, so health plans should consider experience and certification when selecting a vendor. Some other important qualities to look for in an IVA vendor are:

●      Deep knowledge of ACA regulations. A vendor should have a history of monitoring, evaluating, and influencing the changing ACA requirements.

●      Data, analytics, and auditing experience. A long history analyzing large claims databases and auditing healthcare claims, and prior experience with CMS-mandated reporting, are critical experiences.

●      Experience with EDGE servers. To efficiently audit EDGE data, the vendor needs experience with EDGE data format and content, and in processing large amounts of data.

●      Risk and reinsurance expertise. Look for an auditor with experience with risk models.

●      Flexible approach. This is not a completely straightforward process. Every health plan is different, and your vendor should be able to implement a solution to meet a health plan’s specific needs.

●      Certified coders. This one is straightforward. By law, the coders must be certified by the American Health Information Management Association (AHIMA) or the American Academy of Professional Coders (AAPC).

●      An IVA Approved by CMS. Plans must choose from a list of CMS-accepted entities.

Selecting an experienced and qualified partner to support the IVA will help give health plans peace of mind in managing the IVA requirements. If complying with CMS’s EDGE server requirements is taxing your organization’s resources, it’s time to consider partnering with a qualified EDGE server administrator, and IVA vendor, so you can get back to the business of offering quality health care. Contact us to learn more.

Anita Nair-Hartman, Senior Vice President, Payer Strategy and Business Operations
Bryan Briegel, Healthcare Reform Solutions Specialist

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Categories: Health Plan