The Centers for Medicare & Medicaid Services (CMS) on Wednesday announced plans it describes as an “aggressive strategy” to catch up and accelerate enhanced Medicare Advantage (MA) audits. The agency will hire nearly 2,000 coders to complete audits for payment years 2018 through 2024.
Beginning immediately, CMS said it will audit all eligible MA contracts for each payment year in all newly initiated audits and invest additional resources to expedite the completion of audits for payment years 2018 through 2024. The agency is several years behind in completing the audits, and newly confirmed CMS Administrator Dr. Mehmet Oz said the acceleration will help prevent fraud.
“We are committed to crushing fraud, waste, and abuse across all federal health care programs,” said Dr. Oz in the announcement. “While the Administration values the work that Medicare Advantage plans do, it is time CMS faithfully executes its duty to audit these plans and ensure they are billing the government accurately for the coverage they provide to Medicare patients.”
The Risk Adjustment Data Validation (RADV) audits are conducted to confirm that the diagnoses MA plans submit for payment are supported by documentation in the medical records. Plans receive higher payments for patients who have more serious or chronic conditions.
CMS has a backlog of RADV audits. The last significant recovery of MA overpayments occurred following the audit of payment year 2007, despite federal estimates suggesting MA plans may overbill the government by approximately $17 billion annually, according to CMS. Indeed, the Medicare Payment Advisory Commission (MedPAC) estimates this figure could be as high as $43 billion per year. Other research suggests the overpayments could be $1.6 trillion over the next decade.
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CMS’ completed audits for payment years 2011–2013 found between 5 percent and 8 percent in overpayments.
To address this backlog, CMS said it will
- Deploy “enhanced technology.” These advanced systems will help to efficiently review medical records and flag unsupported diagnoses.
- Hire thousands of coders: CMS intends to increase its team of medical coders from 40 to approximately 2,000 by September 1 to manually verify flagged diagnoses to ensure accuracy.
- Increase audit volume: CMS said that by leveraging technology, it will be able to increase its audits from ~60 MA plans a year to all eligible MA plans each year in all newly initiated audits (approximately 550 MA plans). Furthermore, it will increase the number of records its audits from 35 records per health plan per year to between 35 and 200 records per health plan per year in all newly initiated audits based on the size of the health plan. CMS said the increase in records will ensure its audit findings are more reliable and can be appropriately extrapolated as allowed under the RADV final rule.
In addition to these efforts, CMS will collaborate with the Department of Health and Human Services Office of Inspector General to recover uncollected overpayments identified in past audits.
RELATED: OIG audit roundup: 3 MA plans were overpaid a total of $8.4M for high-risk diagnosis codes
Industry reaction
Industry expert Ana Handshuh, principal of CAT5 Strategies, told RISE on Thursday morning that CMS’ decision to audit every health plan annually is yet another clear signal that it's intensifying its focus on program integrity in risk adjustment.
Indeed, Handshuh recently joined Melissa Smith, founder of Newton Smith Group, and Tina Dueringer, BSN, R.N., CCM, CEO, and principal advisor of Dueringer Advisors, Inc., for a RISE webinar and discussed the greater focus on oversight of the program.
Her advice: Health plans should take this seriously by not only ensuring they are doing things correctly but by critically evaluating whether current practices remain fully compliant.
That includes:
- Strengthening oversight over both internal teams and vendors involved in risk adjustment
- Reinforcing the effectiveness of their compliance program
- Making sure provider communications emphasize the importance of accuracy
Handshuh explained that these may look like adjustments to their risk assessment and updates to policies and procedures as well as to audit and monitoring plans.
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“Risk adjustment activities should include both the capture of new diagnoses and the appropriate deletion of unsupported ones,” she said. “Plans would be wise to use the OIG’s published tools to guide their internal reviews. Finally, if any current practices are curtailed as a result of these evaluations, plans should also assess and prepare for any financial implications.”
RISE will address the audits, as well as risk adjustment, quality performance, documentation, and HCC coding practices, at RISE West 2025, August 25-27, in Las Vegas. Click here to learn more.