Kusserow’s Corner: How to Properly Select an Independent Review Organization

So far this year, the DHHS Office of Inspector General (OIG) has negotiated and posted three dozen Corporate Integrity Agreements (CIAs), bringing the total to over 300 such agreements that are still in force.  The typical CIA is five years in length and results from a settlement of a civil false claims case with the Department of Justice (DOJ).  A provider or entity consents to certain defined obligations as part of “the civil settlement and in exchange for the OIG’s agreement not to seek an exclusion of that health care provider or entity from participation in Medicare, Medicaid, and other federal health care programs.”

CIAs normally include requirements for various types of reviews by an independent review organization (IRO) to ensure compliance with case-specific incidents (physician arrangements, off-label use of drugs, inappropriate billing or marketing practices, et cetera).  Relatively few require financial audits, with the vast majority focused on arrangements and claim processes.  IROs typically include health care consultants, certified public accountant (CPA) firms, and/or law firms.

The OIG does not select the IRO, provide advice on how to select one, or endorse any organizations to be the IRO. It is up to the entity or provider to determine its IRO. However, the OIG reserves the right to approve or deny the entity’s or provider’s choice of IRO within 30 days after the receiving written notice of the IRC’s identity.

Selecting a proper IRO is a critical decision process that should not be taken lightly.  Any problems the OIG finds with an IRO will reflect badly and could aggravate matters.  The fact the OIG has a CIA with an organization has already predisposed it to question the entity’s integrity and commitment to compliance. This is further evidenced by the requirement for an IRO to be a guarantor that there will be compliance with the terms of the Agreement.  As such, it is important to select a firm that has a strong and credible IRO record; has industry expertise; is free of any conflicts of interest or appearance of it; and assigns the right kind of professional staff to carry out the mandates of the CIA. The following are 10 tips to identify an IRO that best meets specific needs:

  1. Establish the firm’s experience in the particular health care sector. There is a huge difference between a provider, a managed care organization, and a pharmaceutical manufacturing company.
  2. Ensure expertise in the specific areas that fall within the scope of work under the CIA. Absence of program expertise can lead to hidden costs in learning the business and may result in difficulties meeting the obligations and possibly with credibility with the OIG.
  3. The more mature in years and health care experience, the better. This should not be a learning opportunity at the entity’s expense.  
  4. The more a firm has served as an IRO, the better it will be at effectively reporting and communicating with both the entity and the OIG. Expecting a firm to have served as an IRO six or more times is not unreasonable.
  5. Seek references where the prospective IRO served in the past to learn whether it performed its work professionally, competently, reasonably, and without upcharging unreasonably over its estimate. 
  6. Avoid a “bait and switch” wherein the people negotiating to become the IRO are quickly switched to lesser qualified individuals to perform the work.  Insist that the prospective IRO to specifically identify the key persons assigned to the engagement, along with their personal qualifications.
  7. The IRO must attest to not having a conflicts of interest problem.  The OIG has enumerated many examples of conflicts of interest, but in short this is means that the IRO cannot be involved in reviewing any work that it had a role in developing and must not have its work conflict with any previous work it has done with the entity. 
  8. The OIG requires that an IRO meet the Government Accountability Office (GAO) “Generally Accepted Government Audit Standards” for operational reviews.   Operational reviews and financial reviews are dealt with separately in those standards. 
  9. Ensure the prospective IRO has the specific qualifications and expertise to properly address the specific requirements under the CIA.  These vary considerably and the more complex a case, the more important that the IRO be highly experienced in that area.
  10. Fee rates and charges can range considerably and it is important to consider that costs, along with experience, professionalism, and industry knowledge.

 Richard P. Kusserow served as DHHS Inspector General for 11 years.  He currently is CEO of Strategic Management Services, LLC (SM), a firm that has assisted more than 3,000 organizations and entities with compliance related matters.  The SM sister company, CRC, provides a wide range of compliance tools including sanction-screening.

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Copyright © 2013 Strategic Management Services, LLC.  Published with permission.