CMS Sets Sights on MA Plans

The federal agency announced this week that it has updated its policies for the MA RADV program.

Echoing an intensifying drumbeat of criticism heard from providers, whistleblowers, consumers, and advocacy groups, the New York Times turned a witheringly scrutinous eye to the Medicare Advantage (MA) program in a feature article last October, saying that a “review of dozens of fraud lawsuits, inspector general audits and investigations by watchdogs shows how major health insurers exploited the program to inflate their profits by billions of dollars.”

So it may not have come as a surprise when federal officials this week announced that they were taking a similarly inquisitive look.

The Centers for Medicare & Medicaid Services (CMS) issued a press release announcing it was finalizing policies for the MA Risk Adjustment Data Validation (RADV) program, the agency’s primary audit and oversight tool of MA program payments.

“Under this program, CMS identifies improper risk adjustment payments made to Medicare Advantage Organizations (MAOs) in instances where medical diagnoses submitted for payment were not supported in the beneficiary’s medical record,” the release read. “The commonsense policies finalized in the RADV final rule (CMS-4185-F) will help CMS ensure that people with Medicare are able to access the benefits and services they need, including in Medicare Advantage, while responsibly protecting the fiscal sustainability of Medicare and aligning CMS’s oversight of the Traditional Medicare and MA programs.”

As required by law, officials noted, CMS’s payments to MAOs are adjusted based on the health status of enrollees, as determined through medical diagnoses reported by MAOs. Studies and audits done separately by CMS and the U.S. Department of Health and Human Services (HHS) Office of Inspector General (OIG), they added, “have shown that Medicare Advantage enrollees’ medical records do not always support the diagnoses reported by MAOs, which leads to billions of dollars in overpayments to plans and increased costs to the Medicare program as well as taxpayers.” Yet despite this, no risk adjustment overpayments have been collected from MAOs since Payment Year (PY) 2007.

“Protecting Medicare is one of my highest responsibilities as Secretary, and this commonsense rule is a critical accountability measure that strengthens the Medicare Advantage program. CMS has a responsibility to recover overpayments across all of its programs, and improper payments made to Medicare Advantage plans are no exception,” HHS Secretary Xavier Becerra said in a statement. “For years, federal watchdogs and outside experts have identified the Medicare Advantage program as one of the top management and performance challenges facing HHS, and today we are taking long overdue steps to conduct audits and recoup funds. These steps will make Medicare and the Medicare Advantage program stronger.”

“CMS is committed to protecting people with Medicare and being a responsible steward of taxpayer dollars,” CMS Administrator Chiquita Brooks-LaSure added. “By establishing our approach to RADV audits through this regulation, we are protecting access to Medicare both now and for future generations. We have considered significant stakeholder feedback and developed a balanced approach to ensure appropriate oversight of the Medicare Advantage program that aligns with our oversight of Traditional Medicare.”

The moves, officials added, reflected “consideration of extensive public comments and robust stakeholder engagement after the release of the 2018 Notice of Proposed Rulemaking.” The finalized policies will also reportedly allow CMS to “continue to focus its audits on those MAOs identified as being at the highest risk for improper payments.”

The RADV final rule can be accessed at the Federal Register online here.

View the fact sheet on the final rule here.