The U.S. Department of Health and Human Services (HHS), through the Centers for Medicare & Medicaid Services (CMS), finalized the policies for the Medicare Advantage Risk Adjustment Data Validation program.
The announcement comes on the heels of a report from the Office of Inspector General (OIG) which found that Cigna-HealthSpring of Tennessee’s risk adjustment program payments led to almost $760,000 in overpayments in 2016 and 2017.
This will be the CMS’s primary audit and oversight tool of Medicare Advantage program payments. Under this program, CMS hopes to identify 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.
CMS’ payments to Medicare Advantage Organizations 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 HHS Office of Inspector General 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.
Despite this, no risk adjustment overpayments have been collected from MAOs since Payment Year 2007. This new rule aims to fix the flaws that have plagued the Medicare Advantage risk adjustment data validation program and that led to overpayment.
The RADV final rule reflects CMS’s consideration of extensive public comments and robust stakeholder engagement after the release of the 2018 Notice of Proposed Rulemaking. The finalized policies will also 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 at https://www.federalregister.gov/public-inspection/current.
“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,” said the HHS Secretary. “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.”
However, there will be some pushback about this new rule. The Associated Press reports that insurers have been gearing up for a fight against the long-awaited final rule, with company leaders raising concerns about the accuracy of the audits. The move will raise insurance rates, warned Matt Eyles, the president of America’s Health Insurance Plans, the lobbying arm for health insurance companies.
“Our view remains unchanged: This rule is unlawful and fatally flawed, and it should have been withdrawn instead of finalized,” Eyles said.
The Biden administration estimated Monday that it could collect as much as $4.7 billion from insurance companies with these newer and tougher penalties for submitting improper charges on the taxpayers’ tab for Medicare Advantage care.