In April 2016, authorities auditors requested a Blue Cross Medicare Advantage well being plan in Minnesota to show over medical data 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 stated it couldn’t find any data to justify the funds as a result of Aggeus shut down within the wake of the indictment, which included prices of falsifying affected person medical information. So Blue Cross requested the Centers for Medicare & Medicaid Services for a “hardship” exemption to a strict requirement that well being plans retain these information 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 data had been reviewed.
A evaluate of 90 authorities audits, launched completely to KHN in response to a Freedom of Information Act lawsuit, reveals that well being insurers that problem Medicare Advantage plans have repeatedly 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 by 2013.
As KHN reported late final month, auditors uncovered thousands and thousands of {dollars} in improper funds — citing overcharges of greater than $1,000 per affected person a yr on common — by almost two dozen well being plans.
The hardship requests, along with different paperwork obtained by KHN by 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 corporations.
Reacting to the audit findings, Sen. Chuck Grassley (R-Iowa) known as for “aggressive oversight” to recoup overcharges.
“CMS must aggressively use every tool at its disposal to ensure that it’s efficiently identifying Medicare Advantage fraud and working with the Justice Department to prosecute and recover improper payments,” Grassley stated in a written assertion to KHN.
Medicare reimburses Medicare Advantage plans utilizing a fancy formulation known as a danger rating that computes larger charges for sicker sufferers and decrease ones for more healthy folks.
But federal officers not often demand documentation to confirm that sufferers have these situations, or that they’re as severe as claimed. Only about 5% of Medicare Advantage plans are audited yearly.
When auditors got here calling, the beforehand hidden CMS data present, they typically discovered little or no assist for diagnoses submitted by the Advantage plans, reminiscent of power obstructive pulmonary illness, diabetes, or vascular illness. Though auditors take a look at the data 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 thousands and thousands of {dollars} in overpayments.
Overall, CMS auditors flagged diagnostic billing codes — which present what sufferers had been handled for — as invalid greater than 8,600 occasions. The audits lined data for 18,090 sufferers over the three-year interval.
In many instances, auditors discovered that the medical credentials of the well being care supplier who made the prognosis had been unclear, the data supplied had been unacceptable, or the file lacked a signature as required. Other information bore the incorrect affected person’s identify or had been lacking altogether.
The charges of billing codes rejected by auditors diverse extensively throughout the 90 audits. The fee of invalid codes topped 80% at Touchstone Health, a defunct New York HMO, in keeping with CMS data. The firm additionally was proven to have the 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.
Registering Excuses
One Medicare Advantage well being plan submitted 57 hardship requests, greater than some other insurer, although CMS authorised solely six. In three instances, the well being plans stated the data had been destroyed in floods. Another cited a warehouse hearth, and two stated the data couldn’t be turned over as a result of a health care provider had been convicted for his function in illegally distributing thousands and thousands of oxycodone tablets by his community of ache clinics.
Other Medicare Advantage well being plans argued they’d no luck retrieving medical data from medical doctors who had moved, retired, died — and in some instances been arrested or misplaced their licenses for misconduct.
CMS discovered most excuses wanting, telling well being plans they granted exceptions solely in “truly extraordinary circumstances.” CMS stated it receives about 100 of those requests for annually 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 prices in Missouri in October 2015.
The indictment accused him of making an digital medical file that fraudulently added billing codes for remedy of medical situations sufferers didn’t essentially have, together with vascular illness.
Gray pleaded responsible in May 2017 to prices 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 stated 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 stated the insurer “is committed to investigating credible cases of fraud, waste, and abuse.”
Dara Corrigan, a CMS deputy administrator, stated that as a “general matter,” its Medicare Advantage audits “are not designed to detect fraud, nor are they intended to identify all improper diagnosis submissions.”
Protecting Taxpayers
The prices to taxpayers from improper funds have mushroomed over the previous decade as extra seniors decide Medicare Advantage plans. CMS has estimated the whole overpayments to well being plans for the 2011-2013 audits at $650 million, but how a lot it should finally claw again stays unclear.
Payment errors proceed to be a drain on the federal government program. CMS has estimated web overpayments to Medicare Advantage plans triggered by unconfirmed medical diagnoses at $11.4 billion for 2022.
“This isn’t a partisan issue,” stated Sen. Sherrod Brown (D-Ohio). “I’ve requested a plan from CMS as to how they plan to recoup these taxpayer-funded overpayments and prevent future overbilling.”
Leslie Gordon, an appearing director of well being take care of the Government Accountability Office, stated CMS wants to hurry up the audit and appeals course of to get faster outcomes.
“That is money that should be recovered,” Gordon advised KHN.
As Medicare Advantage faces mounting criticism from authorities watchdogs and in Congress, the {industry} has tried to rally seniors to its facet 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 “misleading,” whereas the pro-industry group Better Medicare Alliance stated the audits had been “in some cases, more than a decade old.”
Jeff De Los Reyes, a senior vice chairman at GHG Advisors well being care consulting group, stated he believes the well being plans have improved their documentation lately. But, he stated, “coding is never 100% perfect and there will be errors despite the best of intentions.”
Rep. Katie Porter, a Democrat from Southern California and a critic of Medicare Advantage, countered: “When big insurance bills taxpayers for care it never intends to deliver, it is stealing our tax dollars.”