Defensibility Index methodology

How the ArrowISE Defensibility Index is computed from arrangement state and physician status. Plain-English equivalent of the computeDefensibilityIndex function.

v1.0 · reviewed 2026-05-06

What the Defensibility Index measures

The Defensibility Index (DI) is a 0–100 score representing how well an arrangement would hold up under enforcement scrutiny. Higher scores mean the arrangement has stronger documentation, fresher third-party validation, and lower pattern-match against historical Stark / Anti-Kickback Statute enforcement actions.

DI is not a legal opinion. It is a structured, deterministic aggregation of five evidence dimensions weighted to mirror what enforcement actions actually turn on. The score is a starting point for compliance review — not the conclusion of one. All decisions must be reviewed by qualified healthcare counsel.

The five weights

Component	Weight	Why this weight
FMV Currency	30%	Opinion freshness is the most-litigated dimension; stale FMV opinions are the single largest driver of Stark False Claims Act recoveries.
Safe-Harbor Completeness	25%	Element gaps under the applicable Stark exception or AKS safe harbor are direct enforcement signals; partial compliance is not compliance.
OIG Exclusion Status	25%	OIG exclusion of a referring physician is an immediate disqualifier; failure to screen is itself a finding.
External Assessment Currency	10%	Independent third-party review (Cognitron and similar) demonstrates that the arrangement was inspected by someone outside the contracting parties.
Schena-Shield Score	10%	Pattern-match against historical enforcement actions (see /enforcement — coming soon). Inverted: high-pattern-match risk reduces defensibility.

Weights sum to 100%. Sub-scores are 0–100. Each component's contribution is sub-score × weight; the DI is the sum, rounded to 0.1.

Sub-score calculations

FMV Currency (0–100)

Based on days until the FMV opinion expires:

days > 90 → 100 days 31–90 → linear from 100 (at 91) down to 60 (at 31) days 1–30 → linear from 60 (at 30) down to 30 (at 1) expired or missing → 0

Safe-Harbor Completeness (0–100)

Direct passthrough of the percentage of safe-harbor elements marked "met" for the arrangement's applicable Stark exception or AKS safe harbor. Computed in lib/services/safe-harbor.ts. An arrangement with 5 of 7 elements satisfied has a sub-score of 71.4.

OIG Exclusion Status (0–100)

screened & clear → 100 screened & pending → 50 screened & match → 0 not screened → 0

External Assessment Currency (0–100)

no assessments on file → 0 any assessment status = current → 100 any assessment status = expiring → 60 all assessments expired/unavailable → 20

Schena-Shield Score (0–100)

Schena-Shield is a 0–100 risk pattern-match score where higher = more risk. For DI purposes the score is inverted: defensibility = 100 − risk. A Schena-Shield score of 25 contributes a sub-score of 75.

Worked example

Arrangement state:

FMV opinion expires in 60 days
5 of 7 safe-harbor elements met (71.4% completeness)
OIG screening result: clear
No external assessment on file
Schena-Shield risk score: 25

Sub-scores:

FMV Currency: 60 + ((60 − 30) / 60) × 40 = 80
Safe-Harbor Completeness: 71.4
OIG Exclusion Status: 100
External Assessment Currency: 0
Schena-Shield: 100 − 25 = 75

Weighted contributions:

FMV: 80 × 0.30 = 24.00
Safe Harbor: 71.4 × 0.25 = 17.85
OIG: 100 × 0.25 = 25.00
External: 0 × 0.10 = 0.00
Schena-Shield: 75 × 0.10 = 7.50

DI = 74.4

Why the score is interpretable, not authoritative

Two arrangements with identical DI scores can have different underlying risk profiles. The score's structure is its value: a DI of 60 with a 0 in OIG is structurally different from a DI of 60 with a 0 in External Assessment Currency. The arrangement Risk tab surfaces each component's contribution so the reviewer sees which dimensions are dragging the score down.

The DI is designed to make compliance gaps visible at-a-glance, not to substitute for legal judgment. A score of 95 does not immunize an arrangement from enforcement; a score of 50 is not automatic disqualification. Use the DI as a triage signal: which arrangements need attention this week, which are routine.

Change control

Weights are board-locked. Any change to the weights, the sub-score formulas, or the rounding behavior requires written sign-off from the Chief Compliance Officer of ArrowISE (Ectropy Solutions, LLC). The defensibility-version.test.ts snapshot test will fail in CI when the weights change without this page's defensibility-version meta tag being bumped — the document and the code stay in lockstep.

The current version is v1.0, set May 2026 at the launch of the closed-pilot program. The next planned review is Q4 2026, aligned with the SOC 2 Type I auditor selection.

Source

Production source is in lib/services/defensibility.ts. Unit-test coverage in __tests__/defensibility.test.ts pins each sub-score function and the composite output.