Health insurers slam CMS proposal to alter Medicare Advantage audits
Skip to main content
MDHC_Logotype_white
Subscribe
  • My Account
  • Login
  • Subscribe
  • News
    • This Week's News
    • COVID-19
    • Providers
    • Insurance
    • Government
    • Finance
    • Technology
    • Safety & Quality
    • People
    • Regional News
    • Digital Edition
    • More than 4M patients had data exposed in December-reported breaches
      MD Anderson wins appeal over $4.3M HIPAA penalty
      CMS approves rule forcing insurers to ease prior authorization
      Biden unveils $1.9T plan to stem virus and steady economy
    • Biden unveils $1.9T plan to stem virus and steady economy
      Nursing home staff COVID-19 vaccination: A work in progress
      California hospitals prepare ethical protocol to prioritize lifesaving care
      Expanded vaccine rollout in U.S. spawns a new set of problems
    • The Check Up: Trenda Ray
      The Check Up: Trenda Ray of the University of Arkansas for Medical Sciences
      Trenda Ray
      Q&A: Arkansas nursing leader looking for creative staffing solutions as COVID cases surge
      Cook Lydia 4x6_i.jpg
      Northeast Ohio health systems increase community benefit values in 2019
      Vaccine rollout hits snag as health workers balk at shots
    • CMS approves rule forcing insurers to ease prior authorization
      COVID-19 still a big uncertainty for insurers in 2021
      Health insurers' outlook boosted after Dems' Georgia win
      humana_i.jpg
      Humana supports Ohio not-for-profits with $500,000
    • CMS approves rule forcing insurers to ease prior authorization
      Verma: CMS tried to ‘infuse' free-market competition across healthcare during Trump era
      CMS axes MFAR rule for good
    • Operation Warp Speed to bump up McKesson's stock price
      Reporter's notebook: J.P. Morgan's 2021 health conference
      Hospitals, nursing homes get more time to file cost reports
      Hospitals' 2020 fundraising on pace to top 2019
    • 5 things to know about Google's $2.1B Fitbit acquisition
      Providence bets on machine-learning, consolidating data centers
      Mental health treatment was most common telehealth service during COVID
      Broad, Verily take Terra bioinformatics platform to Microsoft Azure cloud
    • Chance of COVID-19 triage care looms over Arizona hospitals
      U.S. ramps up vaccinations to get doses to more Americans
      367146427.jpg
      Should businesses mandate that staff get the COVID vaccine?
      Smartphone
      'No mobile phone' phobia on the rise
    • Tower Health's finance chief resigning after years of steep losses
      AHRQ director Gopal Khanna resigns in response to Capitol riot
      Brigham president stepping down after Moderna controversy
      Dr. Kenneth Davis
      Mount Sinai CEO offers lessons from one of the nation's first COVID recovery clinics
    • Midwest
    • Northeast
    • South
    • West
  • Insights
    • ACA 10 Years After
    • Best Practices
    • InDepth Special Reports
    • Innovations
    • The Affordable Care Act after 10 years
    • New care model helps primary-care practices treat obesity
      doctor with patient
      COVID-19 treatment protocol developed in the field helps patients recover
      Rachel Wyatt
      Project to curb pressure injuries in hospitals shows promise
      Yale New Haven's COVID-19 nurse-staffing model has long-term benefits
    • Michellene Davis
      Healthcare leadership lacks the racial diversity needed to reduce health disparities
      Dr. James Hildreth
      How medical education can help fight racism
      Modern Healthcare InDepth: Breaking the bias that impedes better healthcare
      Videos: Healthcare industry executives describe their encounters with racism
      Quotes from rebadged employees
      Outsourcing IT, revenue cycle takes toll on internal culture
    • A woman with a wearable sensor talking to her provider.
      Wearable sensors help diagnose heart rhythm problems in West Virginia
      self service station
      COVID-19 pushes patient expectations toward self-service
      Targeting high-risk cancer patients with genetics
      A nurse holds up a phone with a message to a family member saying surgery has started.
      Texting, tablets help hospitals keep family updated on patient care
  • Transformation
    • Patients
    • Operations
    • Care Delivery
    • Payment
    • Highmark Health inks six-year cloud, tech deal with Google
      Study: 1 in 5 patients report discrimination when getting healthcare
      HHS proposes changing HIPAA privacy rules
      Android health records app launches at 230 health systems
    • California hospitals prepare ethical protocol to prioritize lifesaving care
      Amazon, JPMorgan Chase, Berkshire Hathaway disband Haven
      Digital pathways poised to reshape healthcare continuum in 2021
      Healthcare was the hardest hit by supply shortages across all U.S. industries
    • A woman with a wearable sensor talking to her provider.
      Wearable sensors help diagnose heart rhythm problems in West Virginia
      New care model helps primary-care practices treat obesity
      How hospitals are building on COVID-19 telehealth momentum
      Researchers: Hospital price variation exacerbates health inequities
    • MedPAC votes to boost hospital payments, freeze or cut other providers
      Most Next Gen ACOs achieved bonuses in 2019
      Congress recalibrates Medicare Physician Fee Schedule after lobbying
      CMS approves rule to encourage value-based drug pricing
  • Data/Lists
    • Rankings/Lists
    • Interactive Databases
    • Data Points
    • Health Systems Financials
      Executive Compensation
      Physician Compensation
  • Op-Ed
    • Bold Moves
    • Breaking Bias
    • Commentaries
    • Letters
    • Vital Signs Blog
    • From the Editor
    • Wellstar CEO calls adapting for the pandemic her bold move
      Howard P. Kern
      Recognizing the value of telehealth in its infancy
      Dr. Stephen Markovich
      A bold move helped take him from family doctor to OhioHealth CEO
      Dr. Bruce Siegel
      Why taking a hospital not-for-profit was Dr. Bruce Siegel’s boldest move
    • Barry Ostrowsky
      Ending racism is a journey taken together; the starting point must be now
      Laura Lee Hall and Gary Puckrein
      Increased flu vaccination has never been more important for communities of color
      John Daniels Jr.
      Health equity: Making the journey from buzzword to reality
      Mark C. Clement and David Cook
      We all need to 'do something' to fight inequities and get healthcare right, for every patient, every time
    • Healing healthcare: some ideas for triage by the new Congress, administration
      Dr. Sachin H. Jain
      Medicare for All? The better route to universal coverage would be Medicare Advantage for All
      Connectivity: a social determinant of health that can exacerbate all the others
      Taking my shot at building trust
    • Letters: Eliminating bias in healthcare needs to be ‘deliberate and organic’
      Letters: Maybe dropping out of ACOs is a good thing for patients
      Letters: White House and Congress share blame for lack of national COVID strategy
      Letters: VA making strides to improve state veterans home inspections
    • Sponsored Content Provided By Optum
      How blockchain could ease frustration with the payment process
      Sponsored Content Provided By Optum
      Three steps to better data-sharing for payer and provider CIOs
      Sponsored Content Provided By Optum
      Reduce total cost of care: 6 reasons why providers and payers should tackle the challenge together
      Sponsored Content Provided By Optum
      Why CIOs went from back-office operators to mission-critical innovators
  • Awards
    • Award Programs
    • Nominate
    • Previous Award Programs
    • Other Award Programs
    • Best Places to Work in Healthcare Logo for Navigation
      Nominations Open - Best Places to Work in Healthcare
      Nominations Open - Health Care Hall of Fame
      Nominations Open - 50 Most Influential Clinical Executives
    • 100 Most Influential People
    • 50 Most Influential Clinical Executives
    • Best Places to Work in Healthcare
    • Health Care Hall of Fame
    • Healthcare Marketing Impact Awards
    • Top 25 Emerging Leaders
    • Top 25 Innovators
    • Top 25 Minority Leaders
    • Top 25 Women Leaders
    • Excellence in Nursing Awards
    • Design Awards
    • Top 25 COOs in Healthcare
    • 100 Top Hospitals
    • ACHE Awards
  • Events
    • Conferences
    • Galas
    • Webinars
    • COVID-19 Event Tracker
    • Leadership Symposium
    • Healthcare Transformation Summit
    • Women Leaders in Healthcare Conference
    • Workplace of the Future Conference
    • Strategic Marketing Conference
    • Social Determinants of Health Symposium
    • Best Places to Work Awards Gala
    • Health Care Hall of Fame Gala
    • Top 25 Minority Leaders Gala (2022)
    • Top 25 Women Leaders Gala
  • Listen
    • Podcast - Next Up
    • Podcast - Beyond the Byline
    • Sponsored Podcast - Healthcare Insider
    • Video Series - The Check Up
    • Sponsored Video Series - One on One
    • Carter Dredge
      Next Up Podcast: Ready, set, innovate! Innovation and disruption in healthcare
      Next Up Podcast: COVID-19, social determinants highlight health inequities — what next?
      Next Up Podcast: Saving Rural Health
      Ceci Connolly
      Next Up Podcast: How to navigate the murky post-election waters
    • An older man wearing a mask receiving a vaccine.
      Beyond the Byline: Verifying information on the chaotic COVID-19 vaccine rollout
      doctor burnout
      Beyond the Byline: How healthcare supply chain struggles contribute to employee burnout
      Beyond the Byline: Covering race and diversity in the healthcare industry
      Beyond the Byline: How telehealth utilization has impacted investor-owned company earnings
    • Leading intention promote diversity and inclusion
      Introducing Healthcare Insider Podcast
    • The Check Up: Trenda Ray
      The Check Up: Trenda Ray of the University of Arkansas for Medical Sciences
      The Check Up: Dr. Kenneth Davis
      The Check Up: Dr. Kenneth Davis of Mount Sinai Health System
      The Check Up: Dr. Thomas McGinn
      The Check Up: Dr. Thomas McGinn of CommonSpirit Health
      The Check Up: Mark Ganz
      The Check Up: Mark Ganz of Cambia Health Solutions
    • Video: Ivana Naeymi Rad of Intelligent Medical Objects
  • MORE +
    • Advertise
    • Media Kit
    • Newsletters
    • Jobs
    • People on the Move
    • Reprints & Licensing
MENU
Transformation Hub

Where healthcare challenges find solutions

  • Patients
  • Operations
  • Care Delivery
  • Payment
Payment
August 29, 2019 04:45 PM

Health insurers slam CMS proposal to alter Medicare Advantage audits

Shelby Livingston
  • Tweet
  • Share
  • Share
  • Email
  • More
    Print
    Getty Images

    Health insurers and their industry trade groups this week urged the federal government to scrap proposed changes to the way it audits Medicare Advantage plans, warning the changes could result in higher costs and reduced benefits for seniors.

    In comment letters submitted to the CMS, insurers and lobbyists railed against the CMS proposal to revise its risk-adjustment data validation, or RADV, audit methodology, which is used to ensure the government is making accurate payments to health plans and insurers aren't exaggerating their plan members' medical conditions to get higher payments.

    "The RADV proposal violates numerous statutory requirements and is fundamentally unfair and ill-conceived. We urge CMS in the strongest possible terms to withdraw it and establish a collaborative process with stakeholders to create a workable alternative," trade group America's Health Insurance Plans wrote in its comment letter.

    The Blue Cross and Blue Shield Association warned that the proposal could work against the federal government's goal of moving toward more value-based healthcare.

    "This change will result in inflated audit recoveries, which would distort bidding behavior in a number of ways that are detrimental to beneficiaries," the Blues association wrote. "Inflated audit recoveries also discourage plan participation, deterring new entrants and constraining choice for beneficiaries."

    The CMS' proposed changes are dramatic and technical. Experts say they could be hugely disruptive to and expensive for Medicare Advantage insurers.

    The CMS pitched doing away with the "fee-for-service adjuster" historically applied to audit results and extrapolating the results of an audit of a sample of plan members across the whole Medicare Advantage contract. Moreover, the CMS said it wants to apply the new methodology retroactively going back to 2011.

    Should the changes be finalized, experts have said insurers would likely be subject to larger recoupments of improper payments. The CMS itself predicted the audit changes would result in $1 billion in savings to the Medicare program in 2020 and $381 million each year after.

    The changes were included in a proposed rule from October 2018, but the government extended the comment period multiple times and provided additional information to explain their reasons for proposing the revisions. The extra information made little difference to insurers, which argued the CMS' internal analyses were flawed.

    AHIP, the Blue Cross and Blue Shield Association and other individual insurers that submitted comments all argued that CMS' conclusion that a fee-for-service adjuster is unnecessary is based on an analysis with flawed methods and improper assumptions. The CMS said it wanted to get rid of the adjuster because its analysis found that diagnosis errors in traditional Medicare data don't lead to payment errors in the Advantage program.

    But some insurers pointed to a Cigna Corp.-funded study by consultancy Avalere which concluded that the assumptions made by the CMS in its analysis of the fee-for-service adjuster would lead to underpayments. An AHIP-funded study by actuarial firm Milliman also concluded that a fee-for-service adjuster is necessary.

    Insurers also warned that federal law requires the CMS to ensure payments between traditional Medicare and Medicare Advantage are actuarially equivalent; the adjuster is necessary to that end, they wrote.

    "The proposal appears to be inconsistent with Medicare statute and prior CMS positions and statements on RADV. We also are concerned the methodology supporting the agency's conclusions against the need for an adjuster is flawed and prejudicial to MA plans, especially D-SNPs," insurer Magellan wrote.

    The Medicare Payment Advisory Commission, meanwhile, agreed with the changes.

    "Without weighing in on the legal question of the applicability of the statutory provision, we support CMS' conclusion that an FFS adjuster is unwarranted in determining overpayment recovery amounts identified through RADV audits," MedPAC wrote.

    Insurers also had a problem with the CMS' plan to extrapolate audit results across an entire Advantage contract and apply the new methodology retroactively.

    If CMS moved forward with that plan "it would undermine stakeholder confidence in the agency's willingness to comply with the law and to act as a fair partner with the private sector," AHIP wrote.

    Insurer Centene Corp. warned the proposal could lead to more consolidation in the Advantage market. It encouraged the CMS to create a better appeals process should it go forward with the changes and lead to "extreme" payments from the audits.

    "We would encourage CMS to create additional flexibility for plans in terms of contesting legitimate disputes on medical record interpretation at all phases of the appeals process and allowing for supplementation of medical record information that could not be obtained at the time of the audit despite a plan's best efforts," the insurer wrote.

    Tags: Payment, This Week in Healthcare, Insurers, Medicare Advantage, Payment, Transformation, Transformation Hub, Centene, Blue Cross and Blue Shield, Insurance, Legislation & Regulation, Regulation, Centers for Medicare & Medicaid Services (CMS), America's Health Insurance Plans (AHIP), Web Exclusives
    Letter
    to the
    Editor

    Send us a letter

    Have an opinion about this story? Click here to submit a Letter to the Editor, and we may publish it in print.

    Recommended for You
    MedPAC votes to boost hospital payments, freeze or cut other providers
    MedPAC votes to boost hospital payments, freeze or cut other providers
    Most Next Gen ACOs achieved bonuses in 2019
    Most Next Gen ACOs achieved bonuses in 2019
    Sponsored Content
    Get Free Newsletters

    Sign up for free enewsletters and alerts to receive breaking news and in-depth coverage of healthcare events and trends, as they happen, right to your inbox.

    Subscribe Today

    The weekly magazine, websites, research and databases provide a powerful and all-encompassing industry presence. We help you make informed business decisions and lead your organizations to success.

    Subscribe
    Connect with Us
    • LinkedIn
    • Twitter
    • Facebook
    • RSS
    • Instagram

    Stay Connected

    Join the conversation with Modern Healthcare through our social media pages

    MDHC_Logotype_white
    Contact Us

    (877) 812-1581

    Email us

     

    Resources
    • Contact Us
    • Advertise with Us
    • Ad Choices Ad Choices
    • Sitemap
    Editorial Dept
    • Submission Guidelines
    • Code of Ethics
    • Awards
    • About Us
    Legal
    • Terms and Conditions
    • Privacy Policy
    • Privacy Request
    Modern Healthcare
    Copyright © 1996-2021. Crain Communications, Inc. All Rights Reserved.
    • News
      • This Week's News
      • COVID-19
      • Providers
      • Insurance
      • Government
      • Finance
      • Technology
      • Safety & Quality
      • People
      • Regional News
        • Midwest
        • Northeast
        • South
        • West
      • Digital Edition
    • Insights
      • ACA 10 Years After
      • Best Practices
      • InDepth Special Reports
      • Innovations
    • Transformation
      • Patients
      • Operations
      • Care Delivery
      • Payment
    • Data/Lists
      • Rankings/Lists
      • Interactive Databases
      • Data Points
    • Op-Ed
      • Bold Moves
      • Breaking Bias
      • Commentaries
      • Letters
      • Vital Signs Blog
      • From the Editor
    • Awards
      • Award Programs
        • 100 Most Influential People
        • 50 Most Influential Clinical Executives
        • Best Places to Work in Healthcare
        • Health Care Hall of Fame
        • Healthcare Marketing Impact Awards
        • Top 25 Emerging Leaders
        • Top 25 Innovators
        • Top 25 Minority Leaders
        • Top 25 Women Leaders
      • Nominate
      • Previous Award Programs
        • Excellence in Nursing Awards
        • Design Awards
        • Top 25 COOs in Healthcare
      • Other Award Programs
        • 100 Top Hospitals
        • ACHE Awards
    • Events
      • Conferences
        • Leadership Symposium
        • Healthcare Transformation Summit
        • Women Leaders in Healthcare Conference
        • Workplace of the Future Conference
        • Strategic Marketing Conference
        • Social Determinants of Health Symposium
      • Galas
        • Best Places to Work Awards Gala
        • Health Care Hall of Fame Gala
        • Top 25 Minority Leaders Gala (2022)
        • Top 25 Women Leaders Gala
      • Webinars
      • COVID-19 Event Tracker
    • Listen
      • Podcast - Next Up
      • Podcast - Beyond the Byline
      • Sponsored Podcast - Healthcare Insider
      • Video Series - The Check Up
      • Sponsored Video Series - One on One
    • MORE +
      • Advertise
      • Media Kit
      • Newsletters
      • Jobs
      • People on the Move
      • Reprints & Licensing