AHIP: Proposed Auditing Rule Would Harm Medicare Advantage Plans
AHIP voiced its opposition to CMS’s proposed rule which permits extrapolation during audits of Medicare Advantage plans and lacks a fee-for-service adjuster.
Source: AHIP
- America’s Health Insurance Plans (AHIP) discouraged CMS from finalizing the risk adjustment data validation (RADV) changes suggested in the agency’s Notice of Proposed Rulemaking (NPRM) 2020 Medicare Advantage (MA)/Part D.
“The risk adjustment data validation (RADV) changes in the proposed rule violate numerous statutory requirements and are fundamentally unfair and ill-conceived,” Matt Eyles, president and chief executive officer of AHIP, said in a written statement. “Finalizing these provisions would undermine private sector confidence in the agency’s willingness to comply with the law and to act as a fair business partner – which could lead to higher costs, reduced benefits, and fewer MA plan options for seniors.”
AHIP opposed the proposed rule’s use of extrapolation for auditing of Medicare Advantage plans’ risk adjustment data validation and believed that the retroactive use of data from previous years in audits violated the Social Security Act (SSA). The payer organization also noted that the rule was missing a fee-for-service adjuster, which AHIP said is necessary for distributing accurate payments.
The rule, proposed in November 2018 with the Center for Program Integrity (CPI) which is the CMS program in charge of MA plan RADV audits, would change the way CMS audits RADV in Medicare Advantage contracts.
Risk adjustment data validation seeks to ensure that CMS distributes proper payments to Medicare Advantage health plans. Under the proposed rule, the CPI auditor would be permitted to extrapolate, or to project a past or current trend onto a plan’s whole population, a practice regularly used in Medicare audits.
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To AHIP, however, this is no routine auditing practice but a breach of the MA plan’s objective and operations.
In its 104-page comment letter, AHIP noted that Congress mandated that MA plans maintain actuarial equivalence, or the same cash value, with Original Medicare.
There is no fee-for-service adjuster in the proposed rule, which is necessary to assess the equivalency between MA plan payments and Original Medicare payments, the payer organization pointed out.
Without a fee-for-service adjuster, Medicare might make payments without documentation, resulting in lower payments to plans, CMS believes. However, some studies have found Medicare Advantage receives payments that are too high.
CPI would be overstepping the bounds of its role by using extrapolation in its analysis, AHIP said.
READ MORE: AHA Questions CMS Medicare Advantage Risk Score Calculation
Extrapolation is a power that the SSA gave only to Medicare contractors conducting an audit on Medicare Parts A or B providers and their power to do so is not absolute.
AHIP not only disagrees with CPI’s authority to extrapolate, but also with the efficacy of extrapolation itself.
“Based on the findings of a study by Wakely that identified several significant areas of concern, we believe the extrapolation methodology CMS published in 2012 raises serious policy concerns because it will produce arbitrary results,” the letter states.
Furthermore, the rule would be retroactive in that it enables CMS to extrapolate audits from as far back as eight years ago. AHIP sees this in violation of SSA’s retroactivity rules. Retroactivity causes problems for plans, which may have challenges retrieving old paperwork or reconnecting with providers from several years ago.
Through retroactivity and extrapolation, the rule imposes on the confidence between public and private sector, AHIP argued. Private payers would not be able to trust the agency when it intervenes, which AHIP said would undercut the free market and the MA program and could lead to a drop in MA benefits, an increase in spending, and the slimming down of MA plan choices.
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AHIP also disputed the fact that CPI began using the new method on 2014 audits without having received public comments. The organization also noted that under the proposed rule CPI would have the power to make alterations without a proper public comment period, relying on Health Plan Management System notices.
“There is a better way. We ask that CMS withdraw these provisions and work with us on real solutions that are fair, accurate, and legally permissible,” AHIP said.
AHIP suggested that RADV withdraw the proposal, stand against retroactivity, recognize the need for an FFS adjuster, and discuss potential changes with MA health plans.
The remaining 99 pages of the AHIP letter included a summary of the proposal, expert opinions, supportive studies by Milliman and Wakely, and arguments in support of an FFS adjuster and against extrapolation and retroactivity.
“The RADV proposal violates numerous statutory requirements and is fundamentally unfair and ill-conceived,” AHIP concluded. “We urge CMS in the strongest possible terms to withdraw it and establish a collaborative process with stakeholders to create a workable alternative. We look forward to providing any additional information you may need and to continuing to work together to improve the health of the millions of Medicare beneficiaries our members serve.”
