Kusserow on Compliance: Investigating CIAs with physician practices

Last year, there were 19 corporate integrity agreements (CIAs) with physician practices. These CIAs, which generally were executed with smaller entities, represented about one fourth the total number entered into in that year. Accordingly, these CIAs were modified to address both the size and type of health care entity. Unlike many other settlements where there were mandates for board and executive oversight, including certifications, agreements with physician practices were different in that they did not include these major oversight and reporting requirements. However, there are many other features of the agreements that warrant attention.

Tom Herrmann, JD, who previously served in the Office of Counsel to the Inspector General, has specialized over the past several years in providing Independent Review Organization (IRO) services. He notes, “there are many significant differences with physician practice CIAs, but that is not surprising. The OIG has long recognized that physician practices are different from other types of providers, and the OIG’s compliance guidance for physician practices reflects these differences. One example calls for prominently posting a notice for patients on how to report fraud and abuse violations to the [Office of Inspector General (OIG)] Fraud Hotline. Often these CIAs with a physician practice are for three years duration, rather than five years. In addition, quarterly IRO review of claims coding, billing, and submission is mandated.”

Dr. Cornelia Dorfschmid, a nationally recognized top expert on claims reviews and utilization of the OIG’s RAT-STATS Statistical Sampling requirements common to CIAs, notes that “physician practice CIAs require quarterly claims samples in the first year, rather than annually for most other types, and must ensure their IRO is expert in the OIG RAT-STATS in the claim samples for accuracy review. The IRO must use reviewers who possess a nationally recognized coding certification. Although only 30 claims are required for the quarterly review, it creates an intensive effort with one review ‘dove tailing’ into the next. Furthermore, there is the 5 percent error rate threshold. If it is lower than that, no additional sampling or extrapolation is required, however, if greater, the IRO is required to estimate the actual overpayment for that period using extrapolating that error rate finding. The practice will have to repay the point estimate of the extrapolated overpayment. With only 30 claims, any errors in the sample endanger violating that threshold. It is also worth noting that if the OIG believes that an IRO quarterly claims review is inaccurate or substandard, it can conduct its own validation review. This would not be a good thing and the practice would have to pay the cost of any such reviews.”

Selecting an IRO is a critical and challenging step in meeting compliance obligations under the CIA especially when the time allotted is only 60 days, rather than the 90 days for most other CIAs. It is critical to ensure that a company meets all the IRO requirements set forth in the CIA, including that the IRO provides identities and credentials of those who will: (1) design the review methodology utilized for claims review; and (2) perform the reviews. The IRO is required to provide to a certification that it adheres to the Government Accountability Office (GAO) professional independence and objectivity standards to the OIG. The IRO must also certify it has reviewed the CIA in its entirety, understands the requirements, and can meet all of the specified standards.

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 © 2016 Strategic Management Services, LLC. Published with permission.