MM Curator summary
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[MM Curator Summary]: MA plans will have to pay back a lot of cash that they stole back when CMS let them get away with the rampant upcoding. The first year that CMS will enforce the paybacks will be 2018. Why that year? I wonder how much overpayments MA plans got the few years before that, and who was in charge at CMS those years, and did they have any specific connection to the overall RADV upcoding scandal? Probably just a bunch of dead end questions, I’m sure.
– Audits finding unsubstantiated claims will extrapolate overpayments to insurers’ other claims
With a more aggressive rule finalized Monday, the Centers for Medicare & Medicaid Services (CMS) said it expects to recover billions more in overpayments from Medicare Advantage plans that upcoded their enrolled beneficiaries as being sicker or requiring more intense levels of care than their medical records could support.
The agency’s revised risk adjustment data validation (RADV) tool will allow the agency to extrapolate the amounts of overpayments found in audited claims that must be repaid to much larger sets of claims submitted by the plan that year. It will “protect the fiscal sustainability” of Medicare, said Health and Human Services Secretary Xavier Becerra during a news conference.
The new extrapolation policy applies to plan years 2018 and later. CMS will not apply the policy to prior years, meaning Medicare Advantage plans will get to keep the money audits determined were wrongfully obtained.
Until now, the amount the plans were supposed to pay back was based just on those overpayments that audits found among the small sample of claims audited. But the new rule enables Medicare to extrapolate the amount owed from those audited claims to all claims submitted for patients in a diagnostic subgroup, thus putting companies on the hook to pay back a lot more money.
“Thanks to this final rule, CMS will now be able to provide appropriate oversight and ensure the integrity of the entire Medicare program by taking specific steps to collect payments made to Medicare Advantage plans to which they were never entitled under our laws and regulations,” Becerra said.
Dara Corrigan, director of the CMS Center for Program Integrity, estimated that in plan payment year 2018 alone, the agency expects to recover $479 million under the new rule. For the 10-year period of 2023 to 2032, it’s estimated the amount recovered will reach $4.7 billion.
The problem has evolved because Medicare Advantage organizations (MAOs) receive a lot more money from Medicare each month for patients with higher health risk scores, as sicker patients presumably will cost more money. But CMS audits have revealed enrollee health histories that do not substantiate their illness, along with patients never treated for their apparent conditions. “There is an incentive for MAOs to potentially over-code diagnoses to increase their payments, that is, to code diagnoses not properly substantiated by medical record documentation,” CMS said in its final rule.
Dozens of Office of Inspector General (OIG) investigations have found most of the largest Medicare Advantage plans have coded their enrollees with illnesses or conditions that the plan providers’ medical records could not support. In the last 2 years alone, OIG released results of investigations that found exaggerated upcoding worth $461 million, according to a MedPage Today search of the agency’s investigative findings.
The practice continues. In its final rule Monday, CMS said that in fiscal year 2021, based on 2019 payments, “we calculated that CMS made over $15 billion in Part C overpayments, a figure representing nearly 7 percent of total Part C payments.”
The agency had originally proposed beginning the extrapolation method for assessing overpayments that MAOs needed to pay back starting with the 2011 payment year.
Asked why the agency decided not to expand the new RADV rule to years before 2018, Corrigan said the agency had to consider all policy discussions and stakeholder input, and the integrity of the program.
The rule also explains that the 2018 year was selected as the starting point for the new policy because of the number of appeals expected from MAOs. “By not using an extrapolation methodology prior to [payment year] 2018, we expect to better control the total number of active appeals that are submitted in the first few years following finalization of this rule, which will alleviate burden on MAOs and CMS,” the rule explained.
Asked if MAOs will challenge the new rule with lawsuits, Becerra and Corrigan declined to comment. “We have a policy on not commenting on any future litigation,” said Corrigan.
In a press release accompanying the rollout of the final rule, CMS said that despite audit findings of overpayments to Medicare Advantage plans going back years, no risk adjustment overpayments have been collected since payment year 2007.
The rule explained that CMS will focus on overpayment subgroups identified by hierarchical condition categories (HCC), representing clinical diagnoses, that are at the highest risk for improper payments.
Better Medicare Alliance, a coalition of stakeholders including MAOs, said it is still reviewing the new rule. But the organization has concerns about “potential unintended consequence of creating an environment of higher premiums and fewer benefits for the more than 29 million seniors and people with disabilities who choose Medicare Advantage,” President and CEO Mary Beth Donahue, said in a statement. “We encourage CMS to work with stakeholders to put in place solutions that are transparent and fair to preserve stability for beneficiaries.”
The president and CEO of America’s Health Insurance Plans (AHIP), Matt Eyles, also was not happy. He called the rule “unlawful and fatally flawed, and it should have been withdrawn instead of finalized. The rule will hurt seniors, reduce health equity, and discriminate against those who need care the most.”
The problem of Medicare Advantage upcoding has increased over the years as MAOs have engaged in aggressive — and sometimes deceptive — marketing and television advertising campaigns that have enrolled millions of seniors. CMS is now trying to curtail such campaigns by employing secret shoppers and requiring that all calls with plan representatives be recorded.
By the end of this year, more than half of all Medicare beneficiaries will be enrolled in a Medicare Advantage plan, attracted by zero or low monthly premiums and the promise of other benefits like dental care, some prescription drug coverage, or gym memberships. However, the downsides of such plans are often poorly explained, and some beneficiaries find that when they need services — a trip to the doctor or a certain prescription — they may have to make unexpected and sometimes pricey co-payments.