CMS vows to ramp up audits of Medicare Advantage plans
The Centers for Medicare & Medicaid Services (CMS) announced Wednesday that it will expand audits of Medicare Advantage contracts, increasing the number of medical coders it has on staff from 40 to 2,000 by Sept. 1.
In a statement, the agency said it has a backlog to work through dating back to 2018. However, it intends to catch up by significantly increasing the number of audits it conducts per year, all in an effort to hold healthcare payers accountable.
“We are committed to crushing fraud, waste and abuse across all federal healthcare programs,” CMS Administrator Mehmet Oz, MD, said. “While the Administration values the work that Medicare Advantage plans do, it is time CMS faithfully executes its duty to audit these plans and ensure they are billing the government accurately for the coverage they provide to Medicare patients.”
CMS said it's looking for any signs of overpayments and excessive billing that could be signs of fraudulent activity by companies that offer Medicare Advantage plans. It added that it plans to use “advanced systems to efficiently review medical records and flag unsupported diagnoses” in support of these efforts.
The agency claimed the last “significant recovery of Medicare Advantage overpayments” occurred when payment year 2007 was audited. It believes fraud costs taxpayers some $17 billion annually, largely stemming from inflated medical claims reimbursement.
It intends to work with the Department of Health and Human Services Office of Inspector General (OIG) to recover any funds paid that are deemed to be linked to illegitimate care delivery and reimbursement.
“CMS reaffirms its commitment to ensuring all Medicare Advantage plans comply with federal requirements and accurately report patient diagnoses used for payment,” the agency said.
As for what technology will be deployed to support medical coders, CMS didn’t elaborate. However, federal healthcare agencies have been rapidly pushing for more use of AI, which is used by private insurance companies to analyze medical claims on a regular basis.
“By leveraging technology, CMS will be able to increase its audits from ~60 Medicare Advantage plans a year to all eligible MA plans each year in all newly initiated audits—[that’s] approximately 550 Medicare Advantage plans,” the agency confirmed.
“CMS will also be able to increase from auditing 35 records per health plan per year to between 35 and 200 records per health plan per year in all newly initiated audits based on the size of the health plan,” it added.
Currently, the federal government pays Medicare Advantage plans based on a risk-adjusted calculation that’s focused mostly on patient diagnoses and the cost of care delivery for enrolled seniors.
The Medicare Payment Advisory Commission (MedPAC) estimates that actual overpayments and fraud could exceed $43 billion per year, CMS said. Completed audits from payment years 2011–2013 found overpayment rates were as high as 8%.
The full announcement is available here.
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