The following program was submitted by Tom_O'Loughlin@sppha-03.CCMAIL.compuserve.com Providence Alaska "High Level Work Plan, Managed Care, Internal Audit" that Arthur Anderson gave to Providence IA's INTERNAL AUDIT HIGH LEVEL WORK PLAN MANAGED CARE I. Revenue A. Review the procedures regarding the receipt, processing and reconciliation of capitation checks. Note any deficiencies and propose additional controls to address those deficiencies. B. Obtain a sample of capitation checks and perform a compliance test to ensure that amounts were properly reconciled and that all procedures identified above were followed, In addition, verify that the capitation checks are received and deposited in the same mannerr as other significant receipts. C. Review the procedures regarding the receipt, processing and collection of co-payment amounts. Note any deficiencies and propose additional controls to address those deficiencies. D. Obtain a sample of patient visits that were subject to co-payments and perform a compliance test to verify that all procedures identified above were followed. Pay particular attention to co- pays that were not collected at time of visit and follow through to their ultimate collection. Identify reasons for nonpayment for discussion with clinic/facility management. E. Review the procedures regarding charge generation. Note any deficiencies and propose additional controls to address those deficiencies. F. Obtain a sample of charges (Combine with test is II) and verify that the procedures identified above were followed. Pay particular attention to this issue in the clinic environment as visit slips and other encounter reporting is a critical link in the accumulation of data regarding managed care effectiveness as well as FFS revenue generation. II. Accounts Receivable A. Review the procedures regarding the registration and billing of capitated members. Pay particular attention to controls in place to ensure that eligibility is verified and that the patient is assigned to the proper financial class for billing. Note any deficiencies and propose additional controls to address those deficiencies. B. Obtain a sample of patient accounts final billed in the last month. Perform a compliance test to verify that all procedures identified above were followed. Pay particular attention to items that appear to be capitated but are not in the proper payor code. C. Follow the sample obtained in 11 B through the system to collection or write-off noting the timeliness of the write-off per clinic/hospital policy. Pay particular attention to "non-capitated" write-offs to verify that the amount is truly a 'bad debt" not a mis-classified managed care patient. D. Review the procedures regarding retroactive additions and terminations of membership. Pay particular attention to controls that ensure that services rendered to enrollees that retro-term are captured and re-billed to the patient and that controls that ensure that services rendered to enrollees that are retroactively added are written-off promptly. Note any deficiencies and propose additional controls to address those deficiencies. E. Obtain a sample of retroactive additions and terminations and perform a compliance test to verify that the procedures identified above are being followed. III. Due to/From Capitation (Capitation Clearing Account) A. Review the procedures regarding the reconciliation of this account. Note any deficiencies and propose additional controls to address those deficiencies. B. Obtain a sample of the reconciliations and perform a compliance test to verify that the above identified procedures were followed. C. Review the reconciliations and test reconciling items as appropriate to ensure the integrity of the reconciliation. IV. Claims payable/IBNR A. Review the procedures regarding the receipt, processing and reconciliation of claims received from outside providers. Note any deficiencies and propose additional controls to address those deficiencies. B. Review the procedures regarding the identification of COB, third party liability and other subrogation amounts. Note any deficiencies and propose additional controls to address those deficiencies, C. Obtain a sample of claims paid and perform a compliance test to verify that the above procedures (both in A & B ) were followed. Pay particular attention to the matching of referral forms to claims, the identification of subrogation opportunities and the payment calculation for settlement. D. Review the procedures regarding negotiation and input of provider contracts into the claims payment system. Pay particular attention to the approval process and to the process that ensures that all contract changes are input and used for claims settlement. Note any deficiencies and propose additional controls to address those deficiencies. E. Obtain a sample of contracts and perform a compliance test to ensure that the procedures identified above were followed. F. Review the procedures regarding the preparation of the IBNR lag schedules and the estimate of IBNR liability. Pay particular attention to procedures to verify accuracy of lag data and to gather/communicate information affecting the IBNR analysis from the operating departments to accounting. Note any deficiencies and propose additional controls to address those deficiencies. G. Obtain the most recent IBNR calculation and related lag study and perform a compliance test to verify that the procedures identified above were followed, H. Obtain the IBNR estimate from six months prior and prove out the estimate based upon actual claims data. Identify estimate deficiencies and propose controls to improve the estimation process. V. Stop-Loss Insurance A. Review the procedures regarding the identification, accumulation, filing and collection of reinsurance claims. Pay particular attention to the method of identifying cumulative claims. Note any deficiencies and propose additional controls to address those deficiencies. B. Obtain a sample of large claims and cumulative claims that exceed the stop-loss limit. Perform a compliance test to verify that the above identified procedures were followed. C. Review a detail that reconciles submitted claims to amounts ultimately received in settlements. Identify significant variances and their causes for consideration. VI. Risk Pools A. Review the procedures regarding the identification and verification of risk pool amounts. Pay particular attention to the method of identifying expected amounts and the controls surrounding verification of receipts. Note any deficiencies and propose additional controls to address those deficiencies. B. Obtain the most recent risk pool analysis and perform a compliance test to ensure that the procedures identified above were followed. Verify that all risk pool receipts are processed and deposited in the same manner as other significant receipt