This browser is not actively supported anymore. For the best passle experience, we strongly recommend you upgrade your browser.

Social Media Links

| 3 minutes read

How Robust are Your Oversight and Monitoring Programs?

With much change around us, regulators have revised their audit priorities, however a health plan’s accountability, including responsibility for its First Tier, Downstream, or Related Entities (FDRs), remains unchanged. It is imperative that health plans focus on the importance of oversight and monitoring controls, particularly as it relates to FDR operations. We have found that FDR oversight and monitoring programs do not always achieve the intended outcomes and leave health plans vulnerable to negative audit findings.

Common Monitoring Findings

Health Plan: “We review our FDR’s policies and procedures, that reflect well-documented and compliant processes.”

Discoveries: Documentation reviews are an important component of FDR oversight, serving to supplement—not replace—an audit of the outcomes achieved through implementation of policies and procedures. Overreliance on documentation reviews without insight into actual outcomes creates risks, such as process gaps and deviations from established procedures, for the health plan that can be uncovered during a regulatory audit.

It is important that the health plan employ an oversight approach, such as through sample-based audit reviews, that evaluates actual outcomes achieved by the FDR. These reviews must assess compliance with regulatory requirements and the FDR’s own policies and procedures. This comprehensive approach ensures that the FDR is adhering to its own stated processes which may be discoverable during an audit. For example, a common mistake observed in Medicare health plan audits surrounds outreach for additional clinical information to render a decision on an authorization request. While revised CMS guidance requires only one attempt to be performed, many organization’s policies and procedures continue to cite that a minimum of three attempts will be performed. An audit of an FDR with such a policy should evaluate the FDR’s stated process of three outreach attempts.

Health Plan: “We perform sample-based audits to ensure our FDR is compliant.”

Discoveries: Many health plans perform sample case reviews; however, the sample selection process is often insufficient at targeting cases for review, which results in unreliable detection of issues and risks. Random sample selections or ineffective targeting of samples does not yield the same outcome as intentional targeting and can frequently obscure noncompliance. Regulatory audits that rely on sample-based reviews typically employ a heavily targeted approach to sample selection, with the volume of selected cases typically small compared to the overall volume of transactions, due in part to the targeted nature to the review. Through targeting, a health plan can identify specific risks that are prone to audit findings, known historical issues, or areas of exposure that may be overlooked with an alternate sample selection approach.

Health Plan: “We do discover issues when we review our FDR’s samples.”

Discoveries: Issues may be identified; however, in-house audits may lack the depth and scope that would be employed during a regulatory audit, resulting in additional issues or risks left uncovered. A regulatory audit will evaluate compliance against applicable and sub-regulatory guidance that will scrutinize upstream and downstream components of discovered issues.

Audits will also consider the root cause of the identified issues and whether the issue is systemic or manual in nature. Failure to expand the evaluation of identified issues to look for impact beyond the sample case in which the issue was discovered may result in differences between in-house and regulatory audit outcomes.

Health Plan: “Our FDR implements corrective actions when required and attests to their revised processes when we identify issues.”

Discoveries: Like the limitations of relying solely on policies and procedures to determine compliance, health plans must not be overly reliant on FDR attestations of corrective action in lieu of targeted re-testing and enhanced monitoring and reporting related to identified issues. Following identification of issues, plans should adjust ongoing monitoring efforts to ensure that any corrective action plans instituted by the FDR are perpetually monitored to ensure they are implemented effectively and achieve the intended outcome. Without such controls, efforts and attention around the issue may begin to wane and risks may be reintroduced, or new risks may arise.


While there are conflicting priorities now weighing on health plans, such as COVID-19, oversight and monitoring efforts must continue to be administered. It is important that your health plan balances priorities to ensure compliance and the health of your membership. Medicare, Medicaid, and commercial plans across the nation vary in size and strategic initiatives; these plans must abide by state and federal regulations. We have seen many different models and approaches to deliver oversight and monitoring programs and with our insight we understand how to maximize effectiveness and will share these experiences with your organization. Together we can enhance your delivery of oversight and monitoring and prepare your team for the next regulatory audit.

© Copyright 2020. The views expressed herein are those of the author(s) and not necessarily the views of Ankura Consulting Group, LLC., its management, its subsidiaries, its affiliates, or its other professionals.


healthcare & life sciences, healthcare disputes, f-distress, f-risk, memo, compliance, healthcare compliance

Let’s Connect

We solve problems by operating as one firm to deliver for our clients. Where others advise, we solve. Where others consult, we partner.

I’m interested in

I need help with