A government watchdog agency is calling for greater oversight of 20 private Medicare Advantage plans that received a disproportionate share of $9.2 billion in enhanced payments in 2016 that were based on potentially suspect patient diagnoses.
The Health and Human Services Office of Inspector General’s report released Wednesday said the enhanced “risk-adjusted” payments were generated through both “chart reviews” of patient records to “identify diagnoses that a provider did not submit or submitted in error,” and through “health risk assessments,” in which someone who’s usually uninvolved in the patient’s care visited their home and evaluated their medical conditions.
The report follows a similar OIG report last year that called on the Centers for Medicare & Medicaid Services to tighten oversight of Medicare Advantage payments based on health risk assessments.
In 2020, 40% of Medicare beneficiaries—25 million people—received program coverage through Medicare Advantage plans, in which private insurance companies receive a set payment to cover each enrollee’s projected cost of care. The plans receive higher “risk-adjusted” payments for sicker beneficiaries with more projected medical costs. The Medicare Advantage plans accounted for $314 billion of Medicare’s $780 billion in program costs in 2020, according to the CMS.
Of 162 MA plans receiving payments based solely on chart reviews and HRAs in 2016, 20 plans generated $5 billion from chart reviews and health risk assessments (HRAs) that were the sole source of diagnoses in the encounter data. That’s 54% percent of the $9.2 billion in total program payments from chart reviews and HRAs, even though the 20 plans enrolled only 31% of MA beneficiaries, the report found. And half of the “20 companies drove payments mainly using the types of chart reviews and HRAs that are more vulnerable to misuse, the report added.
“Our findings raise concerns about the extent to which certain MA companies may have inappropriately leveraged both chart reviews and HRAs to maximize risk-adjusted payments,” report said.
One unnamed Medicare Advantage plan generated 40%—$3.7 billion—of all payments based on chart reviews and HRAs, “yet it enrolled only 22 percent of all MA beneficiaries,” the report said.
In addition to recommending more oversight of the 20 unnamed Medicare Advantage plans cited in the study, the OIG urged the CMS to “take additional actions to determine the appropriateness of payments” to this lone plan. The OIG also recommended “periodic monitoring to identify MA companies that had a disproportionate share of risk adjusted payments from chart reviews and HRAs.”
In response to the recommendation for more oversight of the 20 Medicare Advantage plans, the CMS said audits focusing on high risk plans are the “primary corrective action to recoup overpayments.” Because of this, MA plans at “higher risk for overpayments already have an increased likelihood of being included in audits,” the CMS said in a letter. The agency said it will take the OIG recommendation under consideration in developing policy options.
It said it would also weigh the other OIG recommendations.
Greater Scrutiny of Payments to Private Medicare Insurers Urged
Bloomberg
September 22, 2021 2:50 pm
A government watchdog agency is calling for greater oversight of 20 private Medicare Advantage plans that received a disproportionate share of $9.2 billion in enhanced payments in 2016 that were based on potentially suspect patient diagnoses.
The Health and Human Services Office of Inspector General’s report released Wednesday said the enhanced “risk-adjusted” payments were generated through both “chart reviews” of patient records to “identify diagnoses that a provider did not submit or submitted in error,” and through “health risk assessments,” in which someone who’s usually uninvolved in the patient’s care visited their home and evaluated their medical conditions.
The report follows a similar OIG report last year that called on the Centers for Medicare & Medicaid Services to tighten oversight of Medicare Advantage payments based on health risk assessments.
In 2020, 40% of Medicare beneficiaries—25 million people—received program coverage through Medicare Advantage plans, in which private insurance companies receive a set payment to cover each enrollee’s projected cost of care. The plans receive higher “risk-adjusted” payments for sicker beneficiaries with more projected medical costs. The Medicare Advantage plans accounted for $314 billion of Medicare’s $780 billion in program costs in 2020, according to the CMS.
Of 162 MA plans receiving payments based solely on chart reviews and HRAs in 2016, 20 plans generated $5 billion from chart reviews and health risk assessments (HRAs) that were the sole source of diagnoses in the encounter data. That’s 54% percent of the $9.2 billion in total program payments from chart reviews and HRAs, even though the 20 plans enrolled only 31% of MA beneficiaries, the report found. And half of the “20 companies drove payments mainly using the types of chart reviews and HRAs that are more vulnerable to misuse, the report added.
“Our findings raise concerns about the extent to which certain MA companies may have inappropriately leveraged both chart reviews and HRAs to maximize risk-adjusted payments,” report said.
One unnamed Medicare Advantage plan generated 40%—$3.7 billion—of all payments based on chart reviews and HRAs, “yet it enrolled only 22 percent of all MA beneficiaries,” the report said.
In addition to recommending more oversight of the 20 unnamed Medicare Advantage plans cited in the study, the OIG urged the CMS to “take additional actions to determine the appropriateness of payments” to this lone plan. The OIG also recommended “periodic monitoring to identify MA companies that had a disproportionate share of risk adjusted payments from chart reviews and HRAs.”
In response to the recommendation for more oversight of the 20 Medicare Advantage plans, the CMS said audits focusing on high risk plans are the “primary corrective action to recoup overpayments.” Because of this, MA plans at “higher risk for overpayments already have an increased likelihood of being included in audits,” the CMS said in a letter. The agency said it will take the OIG recommendation under consideration in developing policy options.
It said it would also weigh the other OIG recommendations.