Physician Practice Corporate Integrity Agreements

Independent Review Organization (IRO) Scope of Work Mandates

In 2015, the Department of Health and Human Services (HHS) Office of Inspector General (OIG) negotiated and confirmed 19 Corporate Integrity Agreements (CIAs) with physician practices. These agreements represent only about one-fourth of the total number of CIAs entered into during 2015. These CIAs were generally with smaller organizations and modified accordingly to address both the size and type of each respective entity. Unlike many other CIAs that contain mandates for board and executive oversight, such as certification obligations, CIAs with physician practices do not include the same oversight and reporting requirements. However, many other features of CIAs with physician practices 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 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 OIG Fraud Hotline. CIAs with a physician practice typically last for three years rather than five. These CIAs also mandate a quarterly IRO review of claims coding, billing, and submission.”

Dr. Cornelia Dorfschmid, a nationally recognized expert on claims reviews and the utilization of RAT-STATS statistical sampling requirements common to CIAs, notes that: “Physician practice CIAs require quarterly claims samples in the first year unlike other entity types that are typically required to do so annually. Other entity types must also ensure their IROs have expertise in OIG RAT-STATS to ensure accuracy in the claim samples 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. Notably, if the error rate presents lower than the 5% threshold, no additional sampling or extrapolation is required. However, if it is greater, the IRO is required to estimate the actual overpayment for that period by extrapolating the 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 may risk violating the threshold. Furthermore, if the OIG believes that an IRO’s 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.”

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