Part 3: What should you look for when hiring an independent auditor?

By Michelle Ford


In Part 2 of this blog series we outlined the vital role the independent auditor (IA) plays in the success of your validation audit. In Part 3 we will discuss CMS’ requirements for an IA and what you should look for when hiring an IA.

Part 3: What to look for in an independent auditor

A validation audit may be conducted by CMS or by an independent auditor. If CMS requires an independent auditor, the auditing firm will be hired by the Sponsor. CMS does not make recommendations regarding auditing firms; however, they have outlined certain standards that an IA must have to be considered qualified to conduct the audit, and they must be free from any conflicts of interest.

An independent audit firm must meet the following standards:

1. Is not employed, represented or considered to be a first-tier, downstream or related entity by the sponsoring organization.

2. Is free of conflict of interest. CMS offers an example of when conflict of interest is and is not present for consultants who are serving as IAs.

Conflict of Interest: Consultants who provide management consulting, assist the sponsoring organization with its audit-related operations, and/or assist with the correction of audit conditions.
No Conflict of Interest: Consultants used to conduct “mock audits”, “pre-assessments”, or prior independent audits and have never provided counsel or assistance with the correction of audit findings.

3. Has sufficient subject matter and clinical expertise in the operational areas of Medicare Part C and Part D that are included in the audit. Licensed pharmacists, physicians, or registered nurses may be required depending on the scope of the validation audit.

Sufficient subject matter and clinical expertise is often overlooked in IA selection. Auditor bios are submitted to CMS before the work plan is approved and gaps in Medicare Part C and Part D subject matter expertise will be questioned. Additionally, choosing an auditing firm that has subject matter and clinical expertise specific to Medicare Part C and D will make your audit run more smoothly and cut time-consuming activities that are designed to train the auditor.

MCS’ subject matter and clinical experts specialize in Medicare Part C and D auditing. Unlike many consulting firms, our team is dedicated 100% to the MA and Part D industry which allows us to bring both in-depth knowledge and CMS auditing experience to each independent validation audit. In addition, MCS has considerable experience working with CMS at both the Central Office and Regional Offices and has built strong working relationships.

If you are facing an independent validation audit, call us at (562) 334-7980 to find out how we can help you navigate the process and close out your program audit effectively and timely.

[1] Centers for Medicare and Medicaid HPMS Memo, Audit Validation and Close Out for CMS Program Audits, April 2, 2018
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