Leprechaun HCC Management Outsourcing · Leprechaun, LLC · 6000 Western Place, Suite 900 · Fort Worth, TX 76107 · Phone (817) 231-7000 · Fax (817) 231-7099

Will Your Plan Be Ready
For a CMS Risk Adjustment Data Validation (RADV) Audit?

On July 17, 2008, CMS announced a pilot program to more extensively audit a select group of Medicare Advantage health plans. RAFs (Risk Adjustment Factors) that were not supported in the medical records were adjusted at the plan level, rather than at the beneficiary level as in the past. This extrapolation change made the negative financial implication a critical consideration.

With the RADV pilot completed, CMS has begun conducting further RADV audits to determine whether differences in coding between MA plans and Fee-For-Service providers are the result of coding patterns or of underlying beneficiary health status. Additionally, CMS has expanded its RADV audits to randomly selected plans to generate statistically valid plan level payment error estimates based on 2007 payments.

Leprechaun had the opportunity to support a client through the RADV pilot. From that experience, we have developed an innovative, refined process to provide a broader solution with the goal of optimizing HCC validation within a very constrained time frame. Because it is not enough to simply identify revenue opportunity, we assist our clients with the complicated and resource intensive interventions that follow.

Financial Implications

HCC management has focused on maximizing revenue and now must also focus on insurance against audit risk. For example, a health plan with $10 million in HCC reimbursement for the audit year faces the prospect of writing a $3 million "failed audit penalty" check back to CMS (based on a 30 percent audit failure rate) because the risk is extrapolated across the plan. The negative financial implications can be tremendous.

The predication that claims-based submissions would not be supported up to 40 percent of the time has been proven to be correct and any code for which acceptable documentation cannot be found is discrepant. Leprechaun's Retrospective and Prospective products can dramatically improve audit results. A retrospective HCC submission should pass audit in over 95 percent of cases and a prospective assessment should pass audit in nearly 100 percent of cases.

RADV Pilot Audit Lessons Learned

• The timeline for the pilot audit was just 60 days
• For 200 members, with 750-800 codes, there may well be over 3,000 useful charts
• Locating, retrieving and reviewing charts to support audited HCC's is extremely labor intensive
• Provider and hospital facility cooperation on an accelerated timeline is a challenge

Leprechaun Audit Support Services

Having participated in the pilot CMS Risk Adjustment Data Validation audit, Leprechaun is uniquely qualified to offer you vital support and service based on that experience. Leprechaun's CMS Audit Support services will improve your ability to maximize documentation for HCC's in a form acceptable to CMS which will ultimately reduce your negative financial impact.

Leprechaun utilizes our experience, sophisticated technology and proprietary, logic-based algorithms to identify the prime source of medical records to support the targeted HCC's. Through our knowledge and expertise with Retrospective Chart Review and Prospective Evaluation solutions, Leprechaun is well positioned to target the medical records and prioritize for retrieval.

The medical records are acquired through coordinated requests and are archived at our secure information center. All medical records are reviewed by our most experienced clinical nurse reviewers and are processed through a separate quality assurance review to ensure timelines are met.

Coordination is imperative throughout the process between the health plan and Leprechaun. We will provide you a detailed Responsibility Matrix with key initiatives and timeline mapping based on our RADV audit experience. Throughout the process, our Client Services professionals will provide frequent status reports on progress to ensure all directives are being met with the project. Finally, all appropriate documentation is assembled and returned to the plan for submission to CMS.

Time is not your friend. Our goal is to find the support for as many of the HCC's as possible in order to meet the CMS timeline. We cannot stress strongly enough how intense the labor demands are for this audit. It is imperative that you begin the engagement process with Leprechaun quickly after receiving notification. For best results, please contact us immediately.

Prepare Now

Whether your plan is selected by CMS in the next round or in the future, it is critical that you prepare now. The Leprechaun Audit Support services will help guide you step-by-step through the RADV process by offering a clear understanding of deliverables and timelines to meet CMS requirements and reduce negative financial impacts.

Leprechaun can help you:

• Understand your potential RADV audit risk - Audit Risk Solution
• Understand the financial implications of an audit
• Understand how to ameliorate your risk in advance of an audit
• Understand how to respond if your plan is selected for audit - Audit Support Solution

Does your plan have the time, processes and resources to handle a RADV audit? For more information on our Audit solutions, please contact us.