Annual audits of IDS risk contract settlements improve payment accuracy

Integrated delivery systems (IDSs) should conduct annual audits of payers' settlements under risk contracts to verify that the payer attributed the appropriate amounts of revenue and charged the appropriate claims expenses to the IDS. In particular, IDSs should verify that payers calculated revenues and expenses based on consistent member counts and that the determined commercial revenue was based on the actual premiums paid. IDSs also should determine whether payers have used appropriate demographic factors and countywide rates as a basis for determining Medicare revenue, charged the IDS for claims only for valid members, paid capitated providers the correct capitation amounts, and used appropriate historical data to estimate the amounts of incurred-but-not-reported claims attributed to the IDS.