Insurance companies continue risk adjustment audits

These audits are in their second year and the Practice Organization expects them to continue because of risk-sharing provisions under the Affordable Care Act.

If you recently received notice of a risk adjustment audit, you’re not alone. A number of psychologists received letters from Inovalon on behalf of insurance companies regarding risk adjustment (RA) audits. The Practice Organization tracks these audits and offers members guidance on handling an RA audit

What is a Risk Adjustment Audit?

In order to expand access to health insurance, the Affordable Care Act (ACA) included various mechanisms, such as prohibiting limitations on preexisting conditions, and severely limiting the factors insurers can consider in setting premiums, which increased the financial risk to insurers. Risk Adjustment is one of three risk-sharing programs introduced to mitigate the risk to insurers. These RA audits are intended to annually and randomly “spot check” that patients’ health status and diagnoses are accurately reported, so that the large flow of risk adjustment dollars is based on accurately reported patient data. 

Unlike traditional audits, which tend to focus on the provider’s record-keeping and billing practices, these audits focus on data collection and population health. At this time, psychologists have not reported any incidents of refund requests.

These audits are in their second year and the Practice Organization expects more psychologists to experience an RA audit in the future because of the risk-sharing provisions under the ACA.

The Practice Organization has provided detailed guidance on how to respond to RA requests in the following articles: 

If you have additional questions after reviewing these resources, please contact Practice Organization Legal and Regulatory Affairs staff via email or by phone at (202) 336-5886.

Please note: Legal issues are complex and highly fact specific and require legal expertise that cannot be provided by any single article. In addition, laws change over time and vary by jurisdiction. The information in this article does not constitute legal advice and should not be used as a substitute for obtaining personal legal advice and consultation prior to making decisions regarding individual circumstances.