J.1.c_Appendix_C_-_MCO_Standard_Sampling_Plan.pdf

Appendix C

STANDARD SAMPLING PLAN FOR COST-BASED MANAGED

CARE ORGANIZATIONS (MCO)

1. Sampling Objective:

To determine if the amount of the claims (or encounters) for Medicare Cost enrollees (Plan #) submitted by (Plan Name) in 20___, $__________ before allocation of Administrative and General costs, represents valid, covered claims (or encounters) for members of the Medicare Cost plan.

2. Define the Population:

a. Describe the universe of data, its timeframe, and its source.

b. Describe the plan’s health care delivery model (for example, staff model, clinic, fee-for-service, or a combination). Explain if both costs and statistics could be tested using the sample(s) or if separate samples will be necessary.

c. Verify data integrity and completeness: Explain your plan for verifying that total claims data was reconciled to financial/ statistical totals in the cost report, including the reasonableness of any adjustments by the Audit Contractor (CAC). Detail the steps taken to ensure that the data fields are populated with meaningful data.

d. Address specific types of claims/services: Detail how the following items in the population will be treated:

i. Denied services – Improperly denied services should be noted if the service was never paid on another claim because improperly denied services could indicate quality of care issues. However, no financial penalty (underpayment) should be assessed since the cost of the service was not reported on the Cost Report.

ii. Non-allowed claims – Certain groups of claims costs are reported on Worksheet E, but the related statistics are not reported on Worksheet K because these cost categories are not eligible for Medicare reimbursement.

All of the claims in these cost categories should be removed from both the Medicare and total statistics since they do not need to be tested. Examples of these categories of claims include audiology and refractive services, which may be reported in a medical cost center or in the “Non-allowable” cost center on Worksheet E. The Contractor should verify these are not included in statistics.

iii. Non-covered services – Non-covered services should be removed from the Medicare statistic, but remain in the total statistic. The Contractor should verify that any non-covered services were accounted for in the reconciled database they receive from the CAC. However, the Contractor should state its plan for identifying any non-covered services that were omitted by the CAC.

For example, the Contractor may electronically pre-screen the data for services that are never covered so that these are not selected for testing, and may manually review sampled services that could be non-covered in certain circumstances.

iv. Adjustments – The Contractor should determine the final outcome of each claim and the final, net amount paid and claimed on the Cost Report. The Contractor should sample from the final outcome claims and test the net amount claimed on the Cost Report.

v. Zero paid claims – Zero-paid claims should be included in a separate stratum.

Zero-paid claims could include claims where the entire liability was paid by the beneficiary or a third-party or could be a denied claim (see denied claims above).

vi. Other claims to be removed – Note other populations of claims that are to be removed or separated. Please confer to the Servicing Auditor for any exceptions.

e. Identify critical data elements: For example, paid amounts, billed amounts, or number of services that are used as statistics on the cost report.

f. Describe the sampling frame(s) required to satisfy the objective: There may be more than one sampling frame. For instance, a plan may have its own clinic with staff physicians (encounters) and may also process fee-for-service claims from non-clinic providers, requiring separate samples.

g. Identify sampling unit: Describe the level of detail in the data to be tested which supports the apportionment statistic. Typically testing is at the claim/ encounter or service level.

2. Define the Sampling Methodology:

a. Describe the overall approach for selecting and testing the sample(s).

b. Determine whether variable or attribute elements will be tested: State whether each critical element is binary (pass/fail) or variable (for example, correct reimbursement amount).

c. Describe the sample size and how it was determined.

d. Explain the use of stratification:

i. Factors considered

ii. Number of strata

iii. Criteria used to determine the strata (cost center, amounts, or other)

iv. Determine whether a cost center should be sampled using strata based on amounts. Detail the range of dollars for each stratum, if applicable.

e. Detail the determined stratification (ie. The sample size for each stratum, which cost centers will be tested, etc.)

f. Explain the basis for the sampling approach, such as confidence and precision. Note if there are limitations/compromises (for example, maximum sample size due to budget constraints).

g. State whether the sample will be selected randomly or focused on particular areas. If focused, specify criteria and reasoning, since focused testing results cannot be extrapolated to the entire population.

h. State what communication will be provided to the plan to ensure their understanding of the sampling objective and methodology (Memo of Understanding – as required by SOW).

3. Define the Sample Selection Process:

a. State whether random number generation, systematic random sampling, or judgmental sampling will be used for each sample.

b. Describe the computer applications/tools used in sampling.

4. Describe the Testing Factors and Conclusions:

a. Document the specific tests that will be performed for each selected item, for example the member’s eligibility on the date of service and proper coding of the service.

b. Explain what is considered an exception.

c. Detail what other tests, if any, will be performed independent of the random sample.

d. Describe any other known circumstances affecting the review and the Contractor’s mitigating approach. These circumstances could include new ownership, natural disasters, access to records, or a unique care delivery model.

e. Disclose how results will be extrapolated and what computer programs will be used.

5. Demonstrate the overall results prior to selecting sample.

a. The Contractor shall complete the first tab of the Extrapolation Template (Appendix D) to demonstrate the preliminary strata and strata size.