Initial Validation Auditor (IVA) Strategies for Health Plans

Thoughtware Article Published: Mar 01, 2016
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The May 1, 2016, deadline is rapidly approaching for health plans required to select an Initial Validation Auditor (IVA) entity to perform their ACA HHS-Operated Risk Adjustment Data Validation (HHS-RADV) audit procedures.

Section 1343 of the Affordable Care Act (ACA) establishes a permanent Risk Adjustment (RA) program, which applies to nongrandfathered individual and small group plans both in and out of health insurance exchanges. The RA program is intended to provide payments to health insurance issuers that attract higher-risk populations. The Premium Stabilization Final Rule, issued March 23, 2012, requires states or the U.S. Department of Health and Human Services (HHS), on behalf of states, to validate a statistically valid data sample for all issuers that submit for risk adjustment every year.

When assessing which IVA entity to select, it’s crucial to ask the tough questions. The following questions can help you identify a strong candidate:

  • Do you have experience auditing health plans and provider claims, including enrollment files?
  • Do you have knowledge of hierarchical condition categories (HCC)?
  • Can you provide timely feedback using Web-based interfaces and manage secure data transfers with highly experienced auditors?
  • What type of flexibility can you offer with various health plan needs, budgets and resources?
  • Can you address readiness evaluations and help assess compliance with the risk adjustment process?     
  • Do you have experienced coders certified by the American Health Information Management Association (AHIMA) and American Academy of Professional Coders (AAPC)?
  • Can you serve as primary intake reviewers and senior intake reviewers?
  • Is your coding staff certified and trained in ICD-10-CM coding?
  • What internal quality control mechanisms do you have in place?
  • How will your work plan comply with and meet deadlines to avoid potential penalties?

Health Plan Timeline & Action Steps

  • Designate a person to serve as the HHS-RADV Senior Official (SO) by March 15, 2016, and email the EDGE CEO designate
  • Identify and select the IVA entity prior to May 1, 2016
  • Submit SO designation to the Centers for Medicare & Medicaid Services by April 25, 2016
  • Have the SO complete the IVA entity designation form in the audit tool and download the IVA Entity Attestation form for CEO signature in late April or early May
  • Test processes and procedures to ensure all necessary documents will be provided timely

Characteristics of a High-Quality IVA Entity

Look for an experienced audit firm with a strong reputation for high-quality work that also has knowledge of all parts of the audit, including enrollment, claims, EDGE servers, medical record coding, HCC and RADV audits. The firm also should provide a structured, ongoing communication strategy to keep you updated through the progress of your audit. Cybercrime is rampant, so be diligent in selecting an entity that will protect your data.

If you have questions regarding IVA strategies or the HHS audits, please contact your BKD advisor.

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