Health insurers and their industry trade groups this week urged the federal government to scrap proposed changes to the way it audits Medicare Advantage plans, warning the changes could result in higher costs and reduced benefits for seniors.
In comment letters submitted to the CMS, insurers and lobbyists railed against the CMS proposal to revise its risk-adjustment data validation, or RADV, audit methodology, which is used to ensure the government is making accurate payments to health plans and insurers aren’t exaggerating their plan members’ medical conditions to get higher payments.
“The RADV proposal violates numerous statutory requirements and is fundamentally unfair and ill-conceived. We urge CMS in the strongest possible terms to withdraw it and establish a collaborative process with stakeholders to create a workable alternative,” trade group America’s Health Insurance Plans wrote in its comment letter.
The Blue Cross and Blue Shield Association warned that the proposal could work against the federal government’s goal of moving toward more value-based healthcare.
“This change will result in inflated audit recoveries, which would distort bidding behavior in a number of ways that are detrimental to beneficiaries,” the Blues association wrote. “Inflated audit recoveries also discourage plan participation, deterring new entrants and constraining choice for beneficiaries.”
The CMS’ proposed changes are dramatic and technical. Experts say they could be hugely disruptive to and expensive for Medicare Advantage insurers.
The CMS pitched doing away with the “fee-for-service adjuster” historically applied to audit results and extrapolating the results of an audit of a sample of plan members across the whole Medicare Advantage contract. Moreover, the CMS said it wants to apply the new methodology retroactively going back to 2011.
Should the changes be finalized, experts have said insurers would likely be subject to larger recoupments of improper payments. The CMS itself predicted the audit changes would result in $1 billion in savings to the Medicare program in 2020 and $381 million each year after.
The changes were included in a proposed rule from October 2018, but the government extended the comment period multiple times and provided additional information to explain their reasons for proposing the revisions. The extra information made little difference to insurers, which argued the CMS’ internal analyses were flawed.
AHIP, the Blue Cross and Blue Shield Association and other individual insurers that submitted comments all argued that CMS’ conclusion that a fee-for-service adjuster is unnecessary is based on an analysis with flawed methods and improper assumptions. The CMS said it wanted to get rid of the adjuster because its analysis found that diagnosis errors in traditional Medicare data don’t lead to payment errors in the Advantage program.
But some insurers pointed to a Cigna Corp.-funded study by consultancy Avalere which concluded that the assumptions made by the CMS in its analysis of the fee-for-service adjuster would lead to underpayments. An AHIP-funded study by actuarial firm Milliman also concluded that a fee-for-service adjuster is necessary.
Insurers also warned that federal law requires the CMS to ensure payments between traditional Medicare and Medicare Advantage are actuarially equivalent; the adjuster is necessary to that end, they wrote.
“The proposal appears to be inconsistent with Medicare statute and prior CMS positions and statements on RADV. We also are concerned the methodology supporting the agency’s conclusions against the need for an adjuster is flawed and prejudicial to MA plans, especially D-SNPs,” insurer Magellan wrote.
The Medicare Payment Advisory Commission, meanwhile, agreed with the changes.
“Without weighing in on the legal question of the applicability of the statutory provision, we support CMS’ conclusion that an FFS adjuster is unwarranted in determining overpayment recovery amounts identified through RADV audits,” MedPAC wrote.
Insurers also had a problem with the CMS’ plan to extrapolate audit results across an entire Advantage contract and apply the new methodology retroactively.
If CMS moved forward with that plan “it would undermine stakeholder confidence in the agency’s willingness to comply with the law and to act as a fair partner with the private sector,” AHIP wrote.
Insurer Centene Corp. warned the proposal could lead to more consolidation in the Advantage market. It encouraged the CMS to create a better appeals process should it go forward with the changes and lead to “extreme” payments from the audits.
“We would encourage CMS to create additional flexibility for plans in terms of contesting legitimate disputes on medical record interpretation at all phases of the appeals process and allowing for supplementation of medical record information that could not be obtained at the time of the audit despite a plan’s best efforts,” the insurer wrote.
Date: September 03, 2019
Source: Modern Healthcare