In April 2016, authorities auditors requested a Blue Cross Medicare Advantage well being plan in Minnesota to show over medical information of sufferers handled by a podiatry follow whose proprietor had been indicted for fraud.
Medicare had paid the Blue Cross plan greater than $20,000 to cowl the care of 11 sufferers seen by Aggeus Healthcare, a sequence of podiatry clinics, in 2011.
Blue Cross mentioned it could not find any information to justify the funds as a result of Aggeus shut down within the wake of the indictment, which included costs of falsifying affected person medical recordsdata. So Blue Cross requested the Centers for Medicare & Medicaid Services for a “hardship” exemption to a strict requirement that well being plans retain these recordsdata within the occasion of an audit.
CMS granted the request and auditors eliminated the 11 sufferers from a random pattern of 201 Blue Cross plan members whose information have been reviewed.
A evaluation of 90 authorities audits, launched completely to KHN in response to a Freedom of Information Act lawsuit, reveals that Blue Cross and quite a lot of different well being insurers issuing Medicare Advantage plans have tried to sidestep rules requiring them to doc medical situations the federal government paid them to deal with.
The audits, the newest ones the company has accomplished, sought to validate funds to Medicare Advantage well being plans for 2011 via 2013.
As KHN reported late final month, auditors uncovered hundreds of thousands of {dollars} in improper funds — citing overcharges of greater than $1,000 per affected person a yr on common — by practically two dozen well being plans.
The hardship requests, along with different paperwork obtained by KHN via the lawsuit, make clear the secretive audit course of that Medicare depends on to carry accountable the more and more fashionable Medicare Advantage well being plans — that are an alternative choice to authentic Medicare and primarily run by main insurance coverage firms.
Reacting to the audit findings, Sen. Chuck Grassley, R-Iowa, known as for “aggressive oversight” to recoup overcharges.
“CMS should aggressively use each instrument at its disposal to make sure that it is effectively figuring out Medicare Advantage fraud and dealing with the Justice Department to prosecute and get better improper funds,” Grassley mentioned in a written assertion to KHN.
Medicare reimburses Medicare Advantage plans utilizing a posh formulation known as a danger rating that computes larger charges for sicker sufferers and decrease ones for more healthy folks.
But federal officers hardly ever demand documentation to confirm that sufferers have these situations, or that they’re as critical as claimed. Only about 5% of Medicare Advantage plans are audited yearly.
When auditors got here calling, the beforehand hidden CMS information present, they usually discovered little or no help for diagnoses submitted by the Advantage plans, reminiscent of power obstructive pulmonary illness, diabetes or vascular illness. Though auditors take a look at the information of a comparatively small pattern of sufferers, they’ll extrapolate the error fee to the broad inhabitants of sufferers within the Medicare Advantage well being plan and calculate hundreds of thousands of {dollars} in overpayments.
Overall, CMS auditors flagged diagnostic billing codes — which present what sufferers have been handled for — as invalid greater than 8,600 occasions. The audits coated information for 18,090 sufferers over the three-year interval.
In many circumstances, auditors discovered that the medical credentials of the well being care supplier who made the prognosis have been unclear, the information offered have been unacceptable, or the report lacked a signature as required. Other recordsdata bore the mistaken affected person’s title or have been lacking altogether.
The charges of billing codes rejected by auditors various extensively throughout the 90 audits. The fee of invalid codes topped 80% at Touchstone Health, a defunct New York HMO, based on CMS information. The firm additionally was proven to have the very best common annual overcharges — $5,888 per affected person billed to the federal government.
By distinction, seven well being plans had fewer than 10% of their codes flagged.
Health insurers had a variety of excuses for why information could not be turned over to auditors
One Medicare Advantage well being plan submitted 57 hardship requests, greater than another insurer, although CMS authorized solely six. In three circumstances, the well being plans mentioned the information have been destroyed in floods. Another cited a warehouse hearth, and two mentioned the information could not be turned over as a result of a health care provider had been convicted for his function in illegally distributing hundreds of thousands of oxycodone tablets via his community of ache clinics.
Other Medicare Advantage well being plans argued that they had no luck retrieving medical information from docs who had moved, retired, died — and in some circumstances been arrested or misplaced their licenses for misconduct.
CMS discovered most excuses wanting, telling well being plans they granted exceptions solely in “really extraordinary circumstances.” CMS mentioned it receives about 100 of those requests for every year it audits and approves about 20% of them.
The Medicare Advantage plan issued by Minnesota Blue Cross gained its attraction after it relied on Aggeus Healthcare for diagnoses of vascular illness for 11 of its sufferers who received podiatry care..
Dr. Yev Gray, a Chicago podiatrist who owned the Aggeus chain that operated in additional than a dozen states, was indicted on federal fraud costs in Missouri in October 2015.
The indictment accused him of making an digital medical report that fraudulently added billing codes for remedy of medical situations sufferers did not essentially have, together with vascular illness.
Gray pleaded responsible in May 2017 to costs of conspiracy to defraud the United States and making false statements associated to well being care issues. He was sentenced to 90 months in jail.
Blue Cross mentioned it “terminated” its community agreements with Aggeus about two weeks after studying of the indictment. Jim McManus, director of public relations for Blue Cross and Blue Shield of Minnesota, had no touch upon the case however mentioned the insurer “is dedicated to investigating credible circumstances of fraud, waste, and abuse.”
Dara Corrigan, a CMS deputy administrator, mentioned that as a “common matter,” its Medicare Advantage audits “usually are not designed to detect fraud, nor are they supposed to establish all improper prognosis submissions.”
Protecting taxpayers: ‘That is cash that needs to be recovered’
The prices to taxpayers from improper funds have mushroomed over the previous decade as extra seniors decide Medicare Advantage plans. CMS has estimated the full overpayments to well being plans for the 2011-2013 audits at $650 million, but how a lot it would ultimately claw again stays unclear.
Payment errors proceed to be a drain on the federal government program. CMS has estimated internet overpayments to Medicare Advantage plans triggered by unconfirmed medical diagnoses at $11.4 billion for 2022.
“This is not a partisan problem,” mentioned Sen. Sherrod Brown D-Ohio. “I’ve requested a plan from CMS as to how they plan to recoup these taxpayer-funded overpayments and stop future overbilling.”
Leslie Gordon, an appearing director of well being look after the Government Accountability Office, mentioned CMS wants to hurry up the audit and appeals course of to get faster outcomes.
“That is cash that needs to be recovered,” Gordon instructed KHN.
As Medicare Advantage faces mounting criticism from authorities watchdogs and in Congress, the {industry} has tried to rally seniors to its aspect whereas disputing audit findings and analysis that asserts this system prices taxpayers greater than it ought to.
AHIP, an insurance coverage {industry} commerce group, criticized KHN’s reporting on the newly launched audits as “deceptive,” whereas the pro-industry group Better Medicare Alliance mentioned the audits have been “in some circumstances, greater than a decade outdated.”
Jeff De Los Reyes, a senior vp at GHG Advisors well being care consulting group, mentioned he believes the well being plans have improved their documentation lately. But, he mentioned, “coding is rarely 100% good and there shall be errors regardless of the very best of intentions.”
Rep. Katie Porter, a Democrat from Southern California and a critic of Medicare Advantage, countered: “When massive insurance coverage payments taxpayers for care it by no means intends to ship, it’s stealing our tax {dollars}.”
KHN (Kaiser Health News) is a nationwide, editorially unbiased program of KFF (Kaiser Family Foundation).