Medi­care Ad­van­tage in­sur­ers could be on the hook for bil­lions from au­dit changes

Modern Healthcare - - News - By Shelby Liv­ingston

THE CMS wants to make a few dra­matic changes to the way it au­dits Medi­care Ad­van­tage plans for over­pay­ments, which could leave in­sur­ers on the hook for bil­lions of dol­lars.

In a pro­posed rule re­leased late last month that largely in­volved ex­pand­ing tele­health ben­e­fits, the CMS said it wants to stop ap­ply­ing a “fee-for-ser­vice ad­juster” to its au­dit find­ings, which his­tor­i­cally has been used to en­sure tra­di­tional Medi­care and Ad­van­tage plans re­ceive ac­tu­ar­i­ally equiv­a­lent pay­ments.

The agency also wants to start re­coup­ing pay­ments to Ad­van­tage plans based on a method­ol­ogy it pro­posed back in 2012. The formula would ex­trap­o­late the re­sults of an au­dit of a sam­ple of en­rollees across the en­tire plan pop­u­la­tion. More­over, the CMS wants to ap­ply these changes retroac­tively go­ing back to 2011. Taken to­gether, the changes could be very ex­pen­sive and dis­rup­tive to Ad­van­tage plans, ex­perts said.

“You’re look­ing at po­ten­tially sub­stan­tially larger re­coup­ments of over­pay­ments to Medi­care Ad­van­tage plans,” said Wil­liam Hor­ton, a part­ner at law firm Jones Walker.

In 2017 alone, the CMS es­ti­mated it made $14.4 bil­lion in im­proper pay­ments to Ad­van­tage plans. It pre­dicted that the changes to the “risk ad­just­ment data val­i­da­tion” au­dits would re­sult in $1 bil­lion in sav­ings to the Medi­care pro­gram in 2020 and $381 mil­lion in each sub­se­quent year.

Health in­sur­ers are al­ready push­ing back on the changes. Matt Eyles, CEO of in­dus­try lob­by­ing group Amer­ica’s Health In­sur­ance Plans, said in a state­ment that “the pro­posal re­verses a long-stand­ing po­si­tion—held by both the agency and other stake­hold­ers— that the ad­juster is legally and ac­tuar- ially re­quired.”

The pro­posal comes at a time when the CMS and the Jus­tice Depart­ment have been step­ping up ef­forts to re­cover what they con­sider im­proper pay­ments to the Ad­van­tage pro­gram. The Jus­tice Depart­ment took Unit­edHealth Group to court for al­legedly gam­ing the pro­gram, and re­cently al­leged sim­i­lar claims against An­them. It’s also in­ves­ti­gat­ing the risk-ad­just­ment pro­grams at Aetna, Cigna and Hu­mana, though it hasn’t al­leged any wrong­do­ing against them.

Jessica Smith, se­nior vice pres­i­dent of health­care an­a­lyt­ics and risk-ad­just­ment so­lu­tions at the Gor­man Health Group, said the CMS’ pro­pos­als are an in­di­ca­tion that au­dits will be­come stricter and health plans need to be ready.

The au­dits are meant to pre­vent in­sur­ers from ex­ag­ger­at­ing the med­i­cal con­di­tions of their mem­bers to col­lect higher gov­ern­ment pay­ments. Pay­ments to Ad­van­tage in­sur­ers are ad­justed based on unau­dited tra­di­tional fee-for-ser­vice Medi­care costs and in­di­vid­ual en­rollees’ med­i­cal di­ag­noses and de­mo­graphic in­for­ma­tion. Es­sen­tially, the sicker a pa­tient is, the higher the pay­ments to the plan, giv­ing plans a big in­cen­tive to in­flate the health sta­tus of their mem­bers.

In 2012, the CMS pub­lished a method­ol­ogy to cal­cu­late a pay­ment er­ror rate from a sam­ple of en­rollees from each au­dited Ad­van­tage plan and then ex­trap­o­late that er­ror rate across the en­tire plan. It would then ap­ply the fee-for-ser­vice ad­juster to ac­count for any er­rors in the tra­di­tional Medi­care pro­gram data, which are used in Medi­care Ad­van­tage risk-ad­just­ment. The CMS ap­plied that method­ol­ogy to au­dits in 2011, 2012 and 2013, but never fi­nal­ized the re­sults and never re­cov­ered any over­pay­ments us­ing that process.

But now the CMS wants to col­lect. “The pub­lic has a sub­stan­tial in­ter­est in the re­coup­ment of mil­lions of dol­lars of pub­lic money im­prop­erly paid to pri­vate in­sur­ers,” it said in the pro­posed rule. “The pub­lic also has a sig­nif­i­cant in­ter­est in pro­vid­ing in­cen­tives for those in­sur­ers to claim only proper pay­ments in the fu­ture, which would be pro­moted by the re­coup­ment of funds im­prop­erly paid in the past.”

The CMS sug­gested that health in­sur­ers shouldn’t be sur­prised by the pro­posal, not­ing that it “put MA or­ga­ni­za­tions on no­tice” in 2012 that these changes would be com­ing. The agency also said it stud­ied the fee-for-ser­vice ad­juster and found that di­ag­no­sis er­rors in tra­di­tional Medi­care data don’t lead to pay­ment er­rors in the Ad­van­tage pro­gram, so it pro­posed to elim­i­nate

● the ad­juster.

The au­dits are meant to pre­vent in­sur­ers from ex­ag­ger­at­ing the med­i­cal con­di­tions of their mem­bers to col­lect higher gov­ern­ment pay­ments.

Newspapers in English

Newspapers from USA

© PressReader. All rights reserved.