| Ask the Expert |
Q: What is an IRO?
A: IRO stands for Independent Review Organization. Providers, payers, and pharmaceutical companies with Corporate Integrity Agreements (CIA) are usually required to hire an IRO which monitors the organization’s compliance with the terms of its agreement. The IRO is required to perform certain review/audit related procedures and develop a written report which is submitted with the company’s Annual Report to the OIG. A company that enters into a CIA may be required to have one, some, or all of the following types of engagements performed:
- Compliance – performed as an “agreed-upon procedures” engagement as defined in the AICPA’s Statement of Position (SOP 99-1). Requires the IRO to develop review procedures to assess the company’s compliance with certain CIA requirements including but not limited to activities involving the seven fundamental steps that are to be included in all compliance programs.
- Billing - requires the IRO to select and review a sample of medical and billing records usually particular to the type of services which triggered the settlement with the OIG.
- Systems Review - usually performed secondary to the Billing Engagement should the error rate found be greater than five percent. This requires that the IRO document the policies/procedures and controls in place throughout the revenue cycle associated with the types of services reviewed to identify why the errors occurred, weaknesses in controls, and recommendations for improvement.
- Unallowable Cost Review - hospital providers submit Cost Reports to their fiscal intermediaries. Certain costs associated with the hospital’s settlement are not to be claimed on the cost report and are thus categorized as unallowable costs. The IRO is required to analyze the hospital’s costs associated with the settlement and agreement to assure the OIG that the hospital did not inappropriately claim costs it should not have.
