The second day of RISE West focused on the current Medicare Advantage landscape. Presentations centered on the politics swirling in the industry, current and potential policies and regulations, and the Office of Inspector General’s continued focus on Medicare Advantage. Here are highlights from the morning’s main sessions.
What to watch in the Medicare Advantage policy landscape
Medicare policy experts Carrie Graham, Ph.D., and Neil Patil, MPP, kicked off the conference Tuesday morning with an overview of the transforming Medicare Advantage policy landscape.
Both work for the Medicare Policy Initiative at Georgetown University, which was launched a year ago to provide health care policy analysis and guide discussions about the Medicare market. The organization receives no funding from the federal government or industry. It is independent and funded by Arnold Ventures and West Health.
“We take what we are seeing on the Hill, at CMS, what we are reading, and we give you our opinion on what we think is happening in the landscape and what is getting traction,” said Graham, who serves as the executive director.
Although Medicare Advantage wasn’t included in the One Big Beautiful Bill Act, Graham and Patil say lawmakers and the administration are interested in changes to the program and they predict that Medicare Advantage may be included in bills and end-of-year package in Congress, as well as regulations from the Centers for Medicare & Medicaid Services (CMS).
Among the areas on their radar:
Proposed legislation regarding Medicare Advantage payments: The Guaranteeing Health Access, Reimbursing, and Delivering (GUARD) Act is a bipartisan bill that addresses concerns that Medicare Advantage plans may be targeting veterans to sign up for their plans because the Veterans Health Administration (VHA) is providing and paying for their care, explained Patil, who serves as policy director at the initiative. Studies, he said, have found that Medicare Advantage plans are paid for care that the VHA provides to members enrolled in both programs. The bill would allow the VHA to bill Medicare Advantage plans for care they provide for these dually enrolled veterans. If the bill becomes law, it could provide $357 billion in savings over 10 years.
Proposed legislation regarding coding and risk adjustment: The No UPCODE Act is bipartisan legislation introduced by Senators Bill Cassidy (R-La.) and Jeff Merkley (D-Ore.) that was considered by the Senate during discussions about the One Big Beautiful Bill Act this summer. Although it wasn’t included in the final version of the law, Patil said it could be part of an end-of-year package. The bill calls for developing a risk adjustment model that uses two years of diagnostic data and excludes Health Risk Assessments and chart reviews from risk adjusted payments. The Congressional Budget office projects that if the bill passed, it would save the government $124 billion over 10 years.
RADV audits: The 2023 RADV Final Rule calls for the extrapolation of RADV audit findings beginning with payment year 2018. CMS estimates the extrapolation will recoup $479 million each year beginning in 2025. To conduct the audits, CMS has a team of coders who go through a sample of encounter data to make sure diagnoses are reported in enrollees’ medical records. In May, CMS announced plans to expand RADV audits and invest in new technology to review these medical records and flag unsupported diagnoses with a significant increase in the scope of RADV audits. Instead of auditing 60 Medicare Advantage contracts per year, the use of AI and other new technology will allow it to review all 550 Medicare Advantage contracts. Instead of a sample, Patil said, we may see every Medicare Advantage plan audited. In addition, the new technology will allow CMS to increase the number of records audited from 35 records for each health plan each year to as many as 200 per health plan. Finally, CMS also plans to increase the team of coders who verify the information. Instead of 40 coders, CMS will hire 2,000 coders by September 1. Patil said the initiative is watching to see if the agency follows through on this promise.
Proposed legislation on prior authorization: The Improving Seniors Timely Access to Care Act is bipartisan legislation that is similar to many CMS rules and regulations that have been announced in the last two years. Patil said it would require new electronic prior authorization programs and for Medicare Advantage plans to report certain plan level prior authorization data to CMS. The bill would require plans to provide a lot more data, including descriptions and disclosures of any artificial intelligence that's used at the plan level. It also would implement certain enrollee protection standards and in versions of the bill would provide CMS with the authority to establish time frames for real time decision for routinely approved items and services. A 2022 version of the bill passed the House of Representatives by a unanimous voice vote but was not taken up in the Senate.
Potential legislation for artificial intelligence: Last year Rep. Judy Chu (D-Calif.) and several other Democrats sent a letter to CMS stating they wanted the agency to put in place new guardrails around the use of AI. Patil said they primarily wanted CMS to audit the underlying algorithms that are used to make prior authorization decisions. Although a bill has yet to be introduced, Chu announced during a recent Medicare Advantage hearing that she plans to introduce legislation to implement guardrails on the use of AI in prior authorization decisions.
Keynote: OIG areas of concern for the Medicare Advantage market
In addition to pressure from lawmakers and CMS, the Medicare Advantage market will also feel the heat from the Office of Inspector General (OIG) this year.
Ann Maxwell, deputy inspector general for evaluation and inspections, and Carolyn Kapustij, senior advisor for managed care, from the HHS-OIG, said it should be no surprise that the OIG will prioritize Medicare Advantage considering 51 percent of Medicare beneficiaries are enrolled in Medicare Advantage and the federal government will spend an estimated $538 billion on the program in 2025. Furthermore, MedPAC reports that CMS will pay an additional $84 billion on Medicare Advantage enrollees than it would if the same beneficiaries enrolled in traditional Medicare.
Specifically, the OIG’s oversight will focus on four areas of concern:
Marketing practices
Kapustij highlighted two recent cases that illustrate the fraud schemes that the OIG is watching that involve agents and brokers and arrangements of providers.
The first case involved Oak Street Health and a settlement of $60 million over allegations it paid insurance agents $200 per referral to recruit Medicare Advantage members to attend their clinics. The second case involves MMM and the giving of gift cards to administrators at provider officers to induce referrals and enrollments in the plans. In addition to settlements, the OIG has put in place corporate integrity agreements to ensure the organizations are taking steps to mitigate risk and monitor their marketing as well as providers, and agents and brokers.
As a result of the cases, OIG issued a special fraud alert that warns plans, providers, and third-party marketing organizations about abusive compensation arrangements, specifically paying listing agents, brokers, or providers for referrals.
In addition, Kapustij pointed out a recent case brought by the Department of Justice (DOJ) involving three insurance and three broker organizations. The DOJ alleges that the insurers paid hundreds of billions of dollars disguised as marketing to the organizations but in reality, the money was used for administrative fees to steer beneficiaries to the insurers’ Medicare Advantage plans.
Access to care
Once Medicare Advantage enrollees select a plan that meets their needs, the promise is that enrollees will then have access to needed care. But that access to care may be threatened by the potential misuse of prior authorization and a growing need for behavioral health providers, Maxwell said.
The OIG is concerned that prior authorization may being used to inappropriately deny care. Indeed, the watchdog found the Medicare Advantage plan denials actually violated Medicare coverage rules. Specifically, 13 percent of the denials would have been covered by traditional Medicare.
Furthermore, the OIG found a high rate of overturned appeals, which Maxwell said suggests widespread, inappropriate initial denials. “This is especially concerning given that very few beneficiaries actually use the appeals process. But when they do, the overturn rates are really quite shockingly high,” she said.
Two studies have reinforced what the OIG has discovered. Research from Kaiser found that only 11 percent of beneficiaries go through the appeals process and of those appeals, 80 percent were either partially or fully overturned. A Health Affairs study found 50 percent of appeals were overturned after the initial denial.
The research highlights concerns about potential harm to patients who have been denied care and it has caught the attention of HHS, CMS, and Congress, which all are pushing for reforms, including reducing the number of medical services that are required to have prior authorization, increasing transparency around the entire process, and ensuring that clinical denials actually have a medical professional doing the review at some point in the process.
Meanwhile, Maxwell said, OIG will continue to evaluate prior authorization for post-acute care in long term acute care hospitals, inpatient rehabilitation facilities, and skilled nursing facilities and an analysis of the extent to which the plan denied requests for care and the process undertaken by the plan.
OIG also is raising the alarm on access to behavioral health providers. Maxwell said that almost half of all Americans will have a behavioral health condition, which includes mental health and substance use disorder, in their lifetime. And the need for behavioral health care is desperately high, she said.
“Unfortunately, recent OIG work found that enrollees in traditional Medicare, Medicare Advantage, and Medicaid struggle to access behavioral health care. Based on a sample of urban and rural counties, we found that very few behavioral health care providers are actively serving this population. In fact, on activity average, there are only five active behavioral health providers per 1,000 enrollees. And some counties and managed care plans had no providers at all offering these services.”
She explained that the behavioral healthcare providers that were actively caring for the Medicare and Medicaid population were only about a third of the actual capacity in those counties. That means there was more capacity to provide behavioral health care, just not for Medicare or Medicaid beneficiaries.
OIG also talked to those who were actively providing care to Medicare and Medicaid beneficiaries and 45 percent said they weren't taking new patients. Providers who were taking on new patients had long wait times.
CMS has taken steps to meet this unprecedented demand for behavioral health services, she said, by addressing provider shortages, including network adequacy standards.
“I encourage you to think about this, to go back and look at your network adequacy with these types of providers,” she said. “CMS does in fact provide a tool that you can use to help make sure that your plan does at the very least, meet the network adequacy requirements they have in place.
Financial oversight of risk adjusted payments
A substantial portion of the actual funding that Medicare gives to Medicare Advantage is through risk adjustment payments. Plans that care for sicker, more costly patients receive more money to provide care that the enrollees need. While the idea is sound, Maxwell noted that the practice has been abused.
She said OIG is very concerned that some Medicare Advantage organizations may be making their enrollees appear sicker just to get more money from the federal government. There is broad concern about the lack of proper documentation to support the diagnosis codes submitted to boost payments and a particular concern about chart reviews and risk assessments, two tools used to capture these high-risk diagnoses.
Chart reviews are retrospective reviews of the patient’s charts to determine whether there were diagnosed codes missed or incorrectly added. When the OIG evaluated chart reviews, 99 percent of the time the reviews added diagnosis codes and did not take any away. “So, the errors always seem to go in one direction and that seems pretty suspicious, I would say but not definitive.”
However, she said it becomes more suspicious once OIG found that the enrollees with these added diagnosis codes had no service claims for any care related to the diagnoses. “In other words, the diagnosis showed up in the chart review, but the MA plan billed no services related to that care and that diagnosis and that condition.”
OIG isn’t the only one concerned with this practice. The DOJ has filed several False Claims Act cases where om one example, a plan ended up paying $98 million for knowingly submitting and causing the submission of invalid diagnosis codes. As part of the restitution, the plan had to join into a corporate integrity agreement putting compliance and oversight in place.
OIG is continuing to look into this area, particularly focusing on unlinked chart reviews, which are reviews that don’t put the date on which the service was supposed to have transpired. Maxwell said the watchdog will also examine the extent to which enrollees have diagnosis codes identified only in these unlinked reviews.
OIG is also raising the alarm over health risk assessments, which have become vulnerable to misuse and abuse especially when conducted in an enrollee’s home. The watchdog is looking at diagnoses codes only found in these assessments and don’t exist anywhere else. Last year it found $7.5 billion in questionable risk adjustment payments for 2023. Maxwell said the increased risk adjustment payments were for 1.7 million enrollees. She said if these were actual diagnoses, there should have been care provided for these serious conditions, which typically were for chronic illnesses like congestive heart failure and diabetes.
OIG is particularly concerned about in-home risk assessments which would need technology and diagnostic tools to make these diagnoses in someone’s home.
“So, we continue to raise the alarm about these tools being used to support risk adjusted payments. And like some of the prior authorization reforms, people are starting to listen, which is great. Plans have been stepping up. UnitedHealth and Humana have stepped up and proposed reforms where, for example, Humana is working on limiting payments for diagnoses that are supported solely from in home assessments unless they can be supported someplace else in the medical record.”
However, OIG is continuing to investigate the issue and has a whole series of further audits planned on health risk assessment only diagnoses. It also plans a study focused on dual eligible special needs plans and whether there are risks there for risk adjustment payments.
Provider fraud
In many cases fraud that starts in fee-for-service Medicare will move on to Medicare Advantage, so OIG is on the watch for it.
Kapustij pointed to Operation Brace Yourself in 2019 that focused on telemedicine driven DME orders for unnecessary back, knee, and other orthopedic braces billed to Medicare. As a result of the investigation, CMS and DOJ reported an estimate of $1.9 billion cost avoidance in payments.
A few years later, OIG saw a similar scheme move on to urinary catheters. The investigation, called Operation Gold Rush, involved a transnational organization that bought legitimate DME companies, then used stolen identities of over a million Americans to submit $10.6 billion in false DME claims. Kapustij said that OIG was able to work with CMS and intercept and stop most Medicare payments. But she said Medigap plans still paid $100 billion out of these claims, revealing a system vulnerability about the speed of notifying supplemental insurers of payment suspensions.
The tactics involved in the scheme were rapid change of ownership of suppliers, shell owners, encrypted communications, mass identity theft, and aggressive billing surges.
Once the scheme was shut down in Medicare, fraudsters moved on to Medicare Advantage, billing plans for DME provided to members. OIG is looking at non-participating providers, those who are in Medicare Advantage but are not suppliers that are participants in Medicare fee-for-service. Medicare Advantage is more susceptible to this than traditional Medicare because they can bypass certain Medicare enrollment requirements, such as onsite visits and verifications, reporting ownership interests, comprehensive liability insurance, and surety bonds.