Newly launched federal audits reveal widespread overcharges and different errors in funds to Medicare Advantage well being plans for seniors, with some plans overbilling the federal government greater than $1,000 per affected person a 12 months on common.
Summaries of the 90 audits, which examined billings from 2011 by means of 2013 and are the newest critiques accomplished, have been obtained solely by KHN by means of a three-year Freedom of Information Act lawsuit, which was settled in late September.
The authorities’s audits uncovered about $12 million in internet overpayments for the care of 18,090 sufferers sampled, although the precise losses to taxpayers are possible a lot greater. Medicare Advantage, a fast-growing different to unique Medicare, is run primarily by main insurance coverage corporations.
Officials on the Centers for Medicare & Medicaid Services have mentioned they intend to extrapolate the fee error charges from these samples throughout the entire membership of every plan — and recoup an estimated $650 million consequently.
But after almost a decade, that has but to occur. CMS was set to unveil a ultimate extrapolation rule Nov. 1 however put that call off till February.
Ted Doolittle, a former deputy director of CMS’ Center for Program Integrity, which oversees Medicare’s efforts to combat fraud and billing abuse, mentioned the company has failed to carry Medicare Advantage plans accountable. “I think CMS fell down on the job on this,” mentioned Doolittle, now the well being care advocate for the state of Connecticut.
Doolittle mentioned CMS seems to be “carrying water” for the insurance coverage business, which is “making money hand over fist” off Medicare Advantage. “From the outside, it seems pretty smelly,” he mentioned.
In an electronic mail response to written questions posed by KHN, Dara Corrigan, a CMS deputy administrator, mentioned the company hasn’t advised well being plans how a lot they owe as a result of the calculations “have not been finalized.”
Corrigan declined to say when the company would end its work. “We have a fiduciary and statutory duty to address improper payments in all of our programs,” she mentioned.
The 90 audits are the one ones CMS has accomplished over the previous decade, a time when Medicare Advantage has grown explosively. Enrollment within the plans greater than doubled throughout that interval, passing 28 million in 2022, at a value to the federal government of $427 billion.
Seventy-one of the 90 audits uncovered internet overpayments, which topped $1,000 per affected person on common in 23 audits, based on the federal government’s data. Humana, {one of the} largest Medicare Advantage sponsors, had overpayments exceeding that $1,000 common in 10 of 11 audits, based on the data.
CMS paid the remaining plans too little on common, anyplace from $8 to $773 per affected person.
Auditors flag overpayments when a affected person’s data fail to doc that the individual had the medical situation the federal government paid the well being plan to deal with, or if medical reviewers decide the sickness is much less extreme than claimed.
That occurred on common for simply over 20% of medical situations examined over the three-year interval; charges of unconfirmed ailments have been greater in some plans.
As Medicare Advantage’s reputation amongst seniors has grown, CMS has fought to maintain its audit procedures, and the mounting losses to the federal government, largely underneath wraps.
That method has pissed off each the business, which has blasted the audit course of as “fatally flawed” and hopes to torpedo it, and Medicare advocates, who fear some insurers are getting away with ripping off the federal government.
“At the end of the day, it’s taxpayer dollars that were spent,” mentioned David Lipschutz, a senior coverage legal professional with the Center for Medicare Advocacy. “The public deserves more information about that.”
At least three events, together with KHN, have sued CMS underneath the Freedom of Information Act to shake free particulars in regards to the overpayment audits, which CMS calls Risk Adjustment Data Validation, or RADV.
In one case, CMS charged a regulation agency an advance search charge of $120,000 after which supplied subsequent to nothing in return, based on courtroom filings. The regulation agency filed go well with final 12 months, and the case is pending in federal courtroom in Washington, D.C.
KHN sued CMS in September 2019 after the company failed to answer a FOIA request for the audits. Under the settlement, CMS agreed at hand over the audit summaries and different paperwork and pay $63,000 in authorized charges to Davis Wright Tremaine, the regulation agency that represented KHN. CMS didn’t admit to wrongfully withholding the data.
High Coders
Most of the audited plans fell into what CMS calls a “high coding intensity group.” That means they have been among the many most aggressive in looking for additional funds for sufferers they claimed have been sicker than common. The authorities pays the well being plans utilizing a system known as a “risk score” that’s alleged to render greater charges for sicker sufferers and decrease ones for more healthy ones.
But typically medical data equipped by the well being plans did not assist these claims. Unsupported situations ranged from diabetes to congestive coronary heart failure.
Overall, common overpayments to well being plans ranged from a low of $10 to a excessive of $5,888 per affected person collected by Touchstone Health HMO, a New York well being plan whose contract was terminated “by mutual consent” in 2015, based on CMS data.
Most of the audited well being plans had 10,000 members or extra, which sharply boosts the overpayment quantity when the charges are extrapolated.
In all, the plans acquired $22.5 million in overpayments, although these have been offset by underpayments of $10.5 million.
Auditors scrutinize 30 contracts a 12 months, a small pattern of about 1,000 Medicare Advantage contracts nationwide.
UnitedHealthcare and Humana, the 2 greatest Medicare Advantage insurers, accounted for 26 of the 90 contract audits over the three years.
Eight audits of UnitedHealthcare plans discovered overpayments, whereas seven others discovered the federal government had underpaid.
UnitedHealthcare spokesperson Heather Soule mentioned the corporate welcomes “the program oversight that RADV audits provide.” But she mentioned the audit course of wants to match Medicare Advantage to unique Medicare to supply a “complete picture” of overpayments. “Three years ago we made a recommendation to CMS suggesting that they conduct RADV audits on every plan, every year,” Soule mentioned.
Humana’s 11 audits with overpayments included plans in Florida and Puerto Rico that CMS had audited twice in three years.
The Florida Humana plan additionally was the goal of an unrelated audit in April 2021 by the Health and Human Services inspector common. That audit, which lined billings in 2015, concluded Humana improperly collected almost $200 million that 12 months by overstating how sick some sufferers have been. Officials have but to recoup any of that cash, both.
In an electronic mail, Humana spokesperson Jahna Lindsay-Jones known as the CMS audit findings “preliminary” and famous they have been based mostly on a sampling of years-old claims.
“While we continue to have substantive concerns with how CMS audits are conducted, Humana remains committed to working closely with regulators to improve the Medicare Advantage program in ways that increase seniors’ access to high-quality, lower cost care,” she wrote.
Billing Showdown
Results of the 90 audits, although years previous, mirror newer findings of a slew of different government experiences and whistleblower lawsuits alleging that Medicare Advantage plans routinely have inflated affected person danger scores to overcharge the federal government by billions of {dollars}.
Brian Murphy, an skilled in medical report documentation, mentioned collectively the critiques present that the issue is “absolutely endemic” within the business.
Auditors are discovering the identical inflated costs “over and over again,” he mentioned, including: “I don’t think there is enough oversight.”
When it involves getting a reimbursement from the well being plans, extrapolation is the massive sticking level.
Although extrapolation is routinely used as a software in most Medicare audits, CMS officers have by no means utilized it to Medicare Advantage audits due to fierce opposition from the insurance coverage business.
“While this data is more than a decade old, more recent research demonstrates Medicare Advantage’s affordability and responsible stewardship of Medicare dollars,” mentioned Mary Beth Donahue, president of the Better Medicare Alliance, a bunch that advocates for Medicare Advantage. She mentioned the business “delivers better care and better outcomes” for sufferers.
But critics argue that CMS audits solely a tiny proportion of Medicare Advantage contracts nationwide and may do extra to guard tax {dollars}.
Doolittle, the previous CMS official, mentioned the company must “start keeping up with the times and doing these audits on an annual basis and extrapolating the results.”
But Kathy Poppitt, a Texas well being care legal professional, questioned the equity of demanding enormous refunds from insurers so a few years later. “The health plans are going to fight tooth and nail and not make this easy for CMS,” she mentioned.
KHN (Kaiser Health News) is a nationwide newsroom that produces in-depth journalism about well being points. Together with Policy Analysis and Polling, KHN is likely one of the three main working packages at KFF (Kaiser Family Foundation). KFF is an endowed nonprofit group offering info on well being points to the nation.
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