Initial Validation Audit Vendors

The Affordable Care Act (ACA) poses many challenges for commercial risk-adjusted health plans, not the least of which is the requirement to submit to CMS, by late April, who your company’s chosen Initial Validation Audit Vendor will be. If the audit is not conducted correctly the results can lead to significant losses for your business, which is why carefully selecting a proven IVA auditor is essential. Here are ten critical things to think about.

1. What is the composition of the potential vendor’s team?

What mix of onshore and offshore staff does the vendor utilize? While offshore staff may be qualified, language and cultural differences can pose problems when interpreting your medical documentation. Also, ask about the mix of staffers who will be working on your behalf, as well as their qualifications. Your team should include auditors, reviewers, coders, and senior officers. The senior officer should be a designee of the CEO and can attest to the accuracy and completeness of your data. There should also be reviewers on staff who can interpret the data, and are knowledgeable about enrollment and disenrollment programs.

2. What is the experience level of the certified coders, do they just meet minimal requirements?

The coders conducting an IVA must—by law—be certified by the American Health Information Management Association (AHIMA) or the American Academy of Professional Coders (AAPC). In addition to being certified, they must be experienced. Primary coders are required to have a minimum of 5 years’ experience, while senior coders must have at least 7 years. Proven coding is essential because coders are responsible for validating the diagnoses and reviewing the claims processing from start to finish. Coders must to be experts in validating diagnosis codes, and must consider all elements within the medical records that make up health status validation.

3. Where did the IVA vendor gain experience?

When it comes to an IVA, depth of audit experience is everything. You may want to think twice about hiring a vendor that did not gain experience during 2016, the inaugural year. It helps too if the vendor has experience doing Medicare Advantage RADV (Risk Adjustment Data Validation) audits. Although these audits are different, experience doing chart reviews for Medicare plans proves they know how to complete this type of work accurately and on-time.

4. How many Medical Records should be collected?

It’s impossible to know what medical records will need to be retrieved prior to CMS generating the sample, however, knowing how you and/or your vendor will be gathering medical record documentation is vital in advance. Will medical records be collected for all sampled records, or just those encounters containing HCC-relevant diagnoses? If your goal is to minimize expenses by limiting it to the latter, then any savings realized should be weighed against the potential loss of additional member-HCCs that might be identified from previously unreported diagnoses.

5. How does the vendor collect medical records?

You want to choose a vendor who is doing everything possible to eliminate provider abrasion. Your vendor should offer electronic collection methods in addition to traditional paper-based ones. During the inaugural year audit, we learned from our IVA market study that many providers grew tired of repeated fax or mail requests from competitive vendors, which takes time and money to fulfill. Audit vendors—such as Reveleer —that offer the option for providers to quickly and easily send their documents electronically or allows the vendor to electronically retrieve documents on their own, directly from the provider’s EMR/EHR (electronic medical or health record) system, have the power to eliminate provider abrasion completely.

6. Does the vendor have an integrated end-to-end audit platform?

Auditors must validate thousands of enrollment, demographic and health status documents—the most critical of these being health status. It takes between 500 and 1,500 medical records to validate the required 200-member sample for all the HCCs. End-to-end processing inside of an IVA-specific tool prevents the loss of data during the hand-off, and allows the auditor to review and verify all necessary claims within a tight time frame. Vendors who try to do this work using spreadsheets must shorten their retrieval windows and are challenged to make late-stage adjustments and still meet submission requirements. If the vendor did not invest in a technology solution for 2016, the odds of them doing so in 2017’s uncertain political environment are slim.

7. Does the vendor stay close to CMS' ongoing changes?

This is a critical litmus test. To discover where a potential IVA auditor stands with RADV protocol, you will want to know: Does the vendor participate in weekly CMS phone calls? Did they attend the CMS-sponsored “Lessons Learned Summit?” Do they employ a team who are in close contact with CMS on a regular basis? These are all excellent signs that the vendor knows the most up-to-date protocols. 

8. Can the prospective auditor share clear metrics and SLA’s that they have delivered against in the past?

You should know in advance the metrics that your potential vendors use to communicate the success of their audit work. One important accuracy metric, Interrater Reliability, or IRR, changes yearly so be sure to get their latest metrics. CMS required an 85 percent accuracy from auditors during the inaugural year. Moving forward, all auditors will be required to meet a 95 percent accuracy rate. This reliability rate directly affects your bottom line, so knowing how your IVA vendor plans to meet that standard is critical. Additional metrics that are important to be aware of are collection timeliness and completeness, and should be reflected clearly in the project workplan.

9. Does your vendor have a plan?

You should ask each potential vendor what the single biggest problem was that they encountered in the collection and interpretation of health records for health status, and how did they resolve it? This is a telling question because health status of patients is difficult to determine. It’s also wise to check on the auditor’s project plan, including cut-off dates. Key cut-off dates should include dates for enrollment and disenrollment screen shots, and the final due date for all medical record documentation.

10. Does your vendor have deep understanding of ACA regulations?

A qualified audit vendor should have a history of monitoring, evaluating, and influencing changing ACA requirements. Not only do they need a thorough understanding of ACA, but they also need industry expertise in enrollment, claims and diagnostic coding that is specific to the commercial population. Most importantly, can your vendor demonstrate full understanding of methodology for determining the correct Condition Category and application of Hierarchy for your enrollees?


Although the Initial Validation Audit analyzes the activity of only 200 of your members, the stakes are quite high as the results are then extrapolated across your entire member population, and this will directly impact your revenue. It is critical that you spend quality time upfront vetting potential vendors and asking good questions. Give us a call or schedule a demo so we can share our experiences with the inaugural IVAs, and how our people and platform give you the best chance of success.

About The Author

Reveleer is a healthcare software and services company that empowers payers in all lines of business to take control over their risk adjustment and quality improvement programs. The Reveleer platform enables payers to independently execute and manage every aspect of provider outreach, retrieval, coding, abstraction and reporting – all under one single platform. Leveraging its technology, proprietary data sets, and subject matter expertise, Reveleer also assists payers with full record retrieval and review services to support financial performance and improved member outcomes.