Audits against Medicare Advantage Organizations Found Subpar
The Government Accountability Office (GAO) released a report stating that CMS paid as much as $14.1 billion in improper payments to Medicare Advantage organizations three years ago.
By - In order to ensure government funding isn’t used to pay erroneous or fraudulent medical claims, the Centers for Medicare & Medicaid Services (CMS) conducts risk adjustment data validation (RADV) audits among Medicare Advantage organizations. This is meant to help recover improper payments made to medical facilities that do not have medical records supporting the healthcare services performed in the claim.
The Government Accountability Office (GAO) released a report stating that CMS paid as much as $14.1 billion in improper payments to Medicare Advantage organizations three years ago. GAO also reported that there are no methods in place at CMS that allow them to select the right contracts with the “the greatest potential for recovery of improper payments” to audit.
The report outlines that CMS does not line up improper payment risk among contracts of Medicare Advantage organizations with “unsupported diagnoses.” In general, CMS does not use all accessible and available data to choose the contracts that are at the highest risk of improper payments.
These issues lead the agency to be much less likely to recover improper payments made to Medicare Advantage organizations. Additionally, past audits have had significant delays that have made it more difficult to recover payments in a timely manner.
The report also mentions that CMS has not broadened the recovery audit program among Medicare Advantage organizations since 2010 despite the fact that the Affordable Care Act mandated this expansion.
Along with the funds that may be improperly paid to Medicare Advantage organizations, a number of skilled nursing facilities could also be erroneously billing the Medicare program.
Using Resource Utilization Group (RUG) Rates, these medical centers put Medicare beneficiaries in the upper levels of RUG categories in order to receive a bigger payment from CMS. This could negatively harm patients since these Medicare beneficiaries are likely receiving therapies they do not need.
Despite the fact that there may be fraudulent billing taking place against the Medicare program more often than not, CMS has not taken proactive steps to put an end to this problem whether it has been against Medicare Advantage organizations or skilled nursing facilities.
“I know that they’ve issued the warnings. I know that they’ve put statements in the federal register. I do believe they’re assigning more agents to look into complaints that come into the fraud hotline, but outside of that more reactive, ‘forcing what’s on the books’ system, I’m not aware of them taking proactive steps other than having agents and putting other resources into investigations,” Brian Markovitz, a False Claims Act attorney at Joseph, Greenwald & Laake’s Civil Litigation Group, told HealthPayerIntelligence.com.
In fact, one issue that CMS predicts for next year is the rising reimbursement rate among skilled nursing facilities. Medicare payments to these facilities is expected to increase by $800 million or 2.1 percent in 2017. So how should public payers like CMS and providers work together to create a more collaborative relationship?
“The really important way to make sure that things run more smoothly is to make sure your compliance department is truly independent,” Markovitz explains. “If your compliance official is beholden to someone who is within the billing practice that puts pressure on them unnecessarily. That may not lead to as effective internal compliance. I think those two sections need to be very separate. There needs to be a wall between them so that if the compliance people go in to do an audit and find something that’s wrong, there won’t be pressure to take some of the edge off of it.”
“If you don’t listen to your compliance officer and they warn you about these things, then you may end up with a fraud case against you down the road. That to me seems to be one way to smooth things out so that way you’re billing accurately.”
“I see that time and time again that the compliance person can be neutralized and that’s unfortunate. I think that leads to all sorts of bad practices, including between the payers and the facilities,” he concluded.
However, CMS is attempting to change reimbursement among skilled nursing facilities in a new proposed rule that moves the payment system further away from fee-for-service and toward embracing value-based care reimbursement. Instead of paying for volume of services, CMS seeks to reimburse performance and quality of care.
It is predicted that this new proposed rule will lead to a reduction in healthcare spending for the Medicare program with regard to covering the costs of skilled nursing facilities. Stakeholders have until June 20, 2016 to submit public comments to CMS regarding the proposed rule.
Essentially, these centers will need to take part in quality reporting in order to be paid. By 2019, Medicare reimbursement for skilled nursing facilities will need to be in the form of alternative payment models with a direct focus on value-based care.
As the healthcare industry continues to become more complex and payment models grow to be more advanced, CMS will need to address any improper payments or fraudulent billing in order to keep medical costs low.
Dig Deeper:
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The Impact of Medicare Advantage Plans, ACOs, Payment Reform
