Insurers Required by Centers for Medicare & Medicaid Services (CMS) to Conduct Audit for Affordable Care Act (ACA) Risk Adjustment Program

Posted April 4, 2017

The CMS requires an annual Initial Validation Audit (IVA) to ensure accurate data is used when assessing the payment transfers for the ACA’s Risk Adjustment (RA) program. Therefore to comply with the IVA requirement, BCBSIL is asking for the cooperation and participation of all independently contracted providers in its networks. 

Insurers are required to hire an independent auditor to perform the requirements of the IVA. Tactical Management Incorporated (TMI) is the auditor selected by BCBSIL to retrieve medical records for the IVA, which is expected to begin in June 2017. The RA program applies to all ACA compliant individual and small group plans, including plans that are available on and off the Exchange, and conducts a calculation based on enrollee risk. As a reminder, enrollee risk is calculated based on the diagnosis codes submitted on a claim, as well as through supplemental code capture through medical record review. As BCBSIL independently contracted providers, you may be asked to provide medical records directly to TMI in order to validate all of the diagnosis codes submitted on claims, which are then used in the RA calculation. Please respond to these requests in a timely manner. It is important to have a successful audit to help improve the health care delivery system. 

The IVA will be performed on a sample of members enrolled in ACA compliant plans. TMI will seek to validate medical claims of the sampled members from the previous calendar year. For example, this audit will be conducted in 2017, but will review claims with dates of service in 2016. Please be aware some of these claims may have been paid in 2017 and are likely to be included in the IVA sample. 

We understand this is a very busy time. However, in an effort to comply with the CMS requirements, we appreciate your full support and cooperation as you receive requests from TMI and deliver the requested medical record(s) in a timely manner. 

We want to ensure that the valuable care you provide to your patients every day is accurately reflected in the data you provide to auditors for CMS records. 

If you have any questions, please contact your assigned Provider Network Consultant (PNC).