The Medicare Advantage risk score debacle


Last week brought bad news for Medicare Advantage, the health insurance plan covering nearly 16 million Americans. The Center for Public Integrity reported on billions of dollars overpaid to program contractors between 2008 and 2013 due to risk score errors. "Regulators have kept problems secret," the CPI wrote, "and there's no fix in sight."

The Centers for Medicare & Medicaid Services pays Medicare Advantage organizations based on a risk score measuring a beneficiary's overall health. The government pays higher rates for sicker people apt to generate higher healthcare costs. "[A]s Medicare began paying more for 'sicker' patients," the CPI noted, "Medicare Advantage health plans began reporting their patients were sicker than the Medicare population as a whole."

Program risk scores climbed, topping national norms in at least 1,000 counties between 2007 and 2011, the CPI reported. That spike cost taxpayers more than $36 billion over projected costs of caring for patients in fee-for-service Medicare.

Critics say this overpayment resulted mainly from aggressive billing by contractors that exaggerated how sick customers were or failed to collect medical data supporting higher risk scores.

Though government audits of six plans found a risk score-related error rate of at least 40 percent in one year, the lion's share of the resulting overpayments is unrecovered, the CPI reported.

Why didn't the government do more audits when its initial ones provided compelling reasons to expand the review?

Further, CMS decided not to pursue overpayments made between 2008 and 2010 to Medicare health plans. The agency wrote off a portion of the overpayments in recognition of provider coding variations and forgave payers that voluntarily disclosed improper risk scores for which they received payment, the CPI noted. That's not the CMS I knew.

Looking at the issue from a payer perspective, "the industry denies that health plans overbill and note[s] that they have worked with federal officials to revamp record-keeping processes," the CPI stated. Medicare revenues boost many payers' bottom lines, so maximizing this business is vital. But Medicare dollars bring specific compliance obligations, and some lines can't be crossed.

Payers gave a weak excuse for risk score discrepancies: Just because there's no record of a disease, they said, doesn't mean someone doesn't have it.

Yet how often have payers told providers that if a service isn't documented, then--for insurance purposes--the service didn't happen? Payers should hold themselves to standards they apply elsewhere, even when others create the records involved.

Health insurance fraud, waste and abuse aren't fought well in silos; payers must be all in. We can't have special investigations units recoup Medicare funds with the right hand while other corporate areas contribute to overpayments with the left.

Program integrity requires more. It demands whole seeing and commitment, operational "mouse" vision combined with industrial "eagle" vision.

This also applies to the government's piece of the anti-fraud puzzle. If the goal is public service, then interagency squabbles shouldn't be allowed to thwart required auditing and leave billions on the table.

Was the risk score payment tool something that seemed like a good idea in theory but proved counterproductive in practice? Fixing it is probably more complicated than we know. But since federal officials haven't spoken publicly on these points, taxpayers have no explanation for what the CPI uncovered. And that's unacceptable. - Jane (@HealthPayer)

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