CMS Pub. 100-16, ch. 21, § 50.6.4

42 C.F.R. §§ 422.503(b)(4)(vi)(F), 423.504(b)(4)(vi)(F)

The work plan must include a schedule that lists all of the monitoring and auditing

activities for the calendar year. Sponsors may want to organize the schedule by month or

quarter.

Sponsors must audit their operational areas and those of their first tier entities. It is a best

practice for sponsors to use a combination of desk and on-site audits, including, as

appropriate and as permitted by contractual agreements, unannounced audits or “spot

checks” when developing the work plan. On-site audits provide the auditor an

opportunity to assess the on-site operations, interview staff, and gain a better

understanding of the performance of the area under review.

Sponsors should prepare a standard audit report that includes items such as:

• Audit Objectives;

• Scope and Methodology;

• Findings:

o Condition;

o Criteria;

o Cause;

o Effect; and

• Recommendations

In developing the types of audits to include in the work plan sponsors must:

• Determine which risk areas will most likely affect the sponsor, and prioritize the

monitoring and audit strategy accordingly;

• Utilize appropriate methods in:

o Selecting sponsor facilities, pharmacies, providers, claims, and other areas

for audit;

o Determining appropriate sample size;

o Extrapolating audit findings using statistically valid methods that comply

with generally accepted auditing standards to the full universe; and

o Applying targeted or stratified sampling methods driven by data mining

and complaint monitoring;

• Use special targeted techniques based on aberrant behavior;

• Assess compliance with internal processes and procedures;

• Examine the performance of the compliance program, including a review of

training, reporting mechanisms (e.g., hotline log), investigation files, OIG/GSA

exclusion list screenings, evidence of employee receipt of Standards of Conduct

and conflict of interest disclosures/attestations, and sampling for evidence in

support of attestations, if the sponsor uses attestations to monitor compliance; and

• Conduct follow up review by auditing, monitoring or otherwise of areas

previously found non-compliant to determine if the implemented corrective

actions have fully addressed the underlying problem.