Taking Control of the HHS-RADV Audit: Converting a Risk to an Opportunity

Lucas Blazejewski


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Typically, any form of audit is considered an organizational risk where time, resources and materials are invested to mitigate penalties. Ideally, this means $0 owed in the final audit findings. The HHS-RADV audit is an exception, where 96 of 295 individual, non-catastrophic HIOS contract holders received a total of $93.4M in transfer adjustments in 2021 because of the audit findings.[1] CMS is willing to reimburse organizations for HCCs found during the audit that were originally not submitted or incorrectly coded during the benefit year submission process. For this fact, ProspHire perceives the HHS-RADV audit as an opportunity instead of a liability and encourages organizations maturing in their ACA risk adjustment operations to share this view.

Establishing a proactive and well managed HHS-RADV audit process is a recommended early step in the journey to best-in-class Risk Adjustment operations. Risk Adjustment benefit years are never operated in isolation and there is always a new benefit year with encounter submission, prospective and retrospective programs which require diligent attention. A common trap when managing these competing priorities is to rely on the contracted Initial Validation Audit (IVA) Service Vendor to manage the HHS-RADV audit with minimal oversight. Unfortunately, the best IVA vendor in the market will likely deliver a substandard outcome unless they are actively managed and supported by the health plan throughout the audit.

Manage 3 crucial areas of the HHS-RADV audit process

ProspHire encourages Risk Adjustment teams to proactively manage 3 crucial areas of the HHS-RADV audit process.

  • Chase List Construction – Identify and prioritize appropriate charts for the IVA vendor to retrieve.
  • Chart Retrieval – Review the IVA vendor progress to identify priority charts and leverage provider relationships to acquire the charts the IVA vendor could not.
  • Chart Coding – Review and challenge IVA vendor coding interpretations as appropriate and identify additional diagnosis codes that were not submitted on an encounter.

Dedicating the resources to establish a best-in-class HHS-RADV operating model early in the tenure of the ACA contract can realize value in the short-term by reducing the financial impact of operational shortfalls throughout the benefit year. This will reduce future financial headwinds and increase the chance for a tailwind while other Risk Adjustment programs are being optimized. Effective HHS-RADV audit operation benefits are not limited to short-term value.  A maximally effective HHS-RADV audit operating model will mature with the Risk Adjustment department over time, transitioning from a final HCC recapture opportunity to an effective risk mitigation safeguard. As the HHS-RADV audit for 2023 Benefit Year is commencing, organizations with a history of negative adjustments to Risk Adjustment state transfer results need to accelerate the formation of their best-in-class HHS-RADV audit operating model for immediate value realization while minimizing disruptions to Risk Adjustment program operations for 2024 Benefit Year.

How can ProspHire help?

ProspHire can help by being the catalyst to accelerate the operating model development. We offer subject matter experts, project managers and staffing resources to guide and coordinate the Risk Adjustment team in conjunction with the IVA vendor. Most organizations require support to define and manage operations for the first year to enable leaders and staff to gain the experience to be independently successful. Typical deliverables are job aides, governance models, playbooks, process maps, resource estimates and tools for teams to continue to operate a best-in-class HHS-RADV process for years to come. Contact us today while there is still time to make this year the best HHS-RADV audit outcome in the history of your health plan.

[1] Centers for Medicare and Medicaid Services. Summary Report of 2021 Benefit Year Risk Adjustment Data Validation Adjustments to Risk Adjustment State Transfers. https://www.cms.gov/files/document/hhs-radv-adjustments-by21-ra-transfers-report.pdf.