HHS official calls for tougher audits of Medicare Advantage plans

Move would fight upcoding, lower payments to MA insurers

The Centers for Medicare & Medicaid Services should implement tighter audit standards to prevent Medicare Advantage plans from using unfair billing practices that lead to excessive reimbursements, a senior official with the U.S. Department of Health and Human Services told the Center for Public Integrity (CPI).

Some insurers allegedly are overstating how sick some of their members are so they can increase their "risk score" and get higher reimbursement rates. The practice, known as upcoding, is happening in the Medicare Advantage market because CMS pays more for sick members than healthy ones.

Because of this problem, Richard Kronick, director of the HHS Agency for Healthcare Research and Quality, said CMS should boost audit standards to help lower payments to Medicare Advantage insurers.  

Medicare Advantage plans that have been "significantly more aggressive than average in reporting diagnoses ... should receive a special [risk score] adjustment," he told CPI.

Although CMS loses billions of dollars each year from Medicare Advantage overpayments that aren't recovered, the agency doesn't have a process in place to address the financial losses. In fact, CPI found that from 2008 to 2013, improper payments to Medicare Advantage plans topped nearly $70 billion, FierceHealthPayer previously reported.

That's partly because CMS hasn't been able to determine whether insurers are coding "more completely … or whether they are engaging in fraud and reporting diagnoses that do not exist," Kronick said, adding that some Medicare Advantage insurers might just more thoroughly document their members' health conditions.

To learn more:
- read the Center for Public Integrity article

Related Articles:
Hospitals sue Highmark over Medicare Advantage payments
Reimbursement system is broken, insurance CEO says
4 complaints providers have with Medicare Advantage
Some states want more authority over Medicare Advantage
CMS wants more authority to recover Medicare Advantage overpayments
HHS sued for access to Medicare Advantage info