CMS Issues Final Medicare Advantage Risk Adjustment Rule

The Centers for Medicare and Medicaid Services completed a risk adjustment policy in the final rule to prevent overpayments to Medicare Advantage Organizations.

Studies and audits conducted separately by CMS and the Office of the Inspector General of Health and Human Services have shown that the medical records of Medicare Advantage members do not always support the diagnoses reported by the MAO, resulting in billions of dollars of overpayments on plans and increased treatment costs. the Medicare program, as well as taxpayers, CMS said in a statement.

Despite this, there has been no risk-adjusted payment from the MAO since 2007, according to CMS.

The final risk-adjustment data review rule released on Monday puts the responsibility on insurers, CMS said.

Instead of extrapolating from the 2011 fiscal year audit as originally proposed by CMS, the agency ended the policy of not extrapolating the RADV audit results for the 2011-2017 fiscal year and starting extrapolation from the 2018 RADV audit.

As a result, CMS will only collect non-extrapolated overpayments identified by CMS RADV audits and OIG audits between 2011 and 2017 payments.

This rule completes the proposed policy that CMS will not apply a correction factor, known as the service charge adjuster, in RADV audits.

In accordance with the 2021 decision of the District Court of the District of Columbia in the case of UnitedHealthcare Insurance Co. v. Becerra, the actuarial equivalence requirement for MA payments applies to how CMS risk adjusts payments it makes to MAO, not to the obligation to refund overpayments for unconfirmed diagnosis codes. , including overpayments identified during the RADV audit, CMS said in a statement.

WHY IS IT IMPORTANT

The final policy will allow CMS to continue focusing its reviews on those MAOs found to be most at risk of improper payments, the agency said.

CMS stated that RADV’s final rule reflects consideration of extensive public comment and active engagement with stakeholders following the release of the 2018 Notice of Proposed Rulemaking.

In September 2022, insurers told CMS that RADV’s proposed policies unfairly target previous audits as far back as 10 years ago. AHIP told CMS that the proposed changes to risk adjustment data verification audits “undermine confidence in CMS’s willingness to be an honest partner with the private sector.”

AHIP on Monday said its final rule remains “illegal” and “fatally flawed.”

President and CEO Matt Ailes said, “Our view remains that this rule is illegal and fatally flawed and should have been repealed, not improved. This rule will hurt the elderly, reduce health equity, and discriminate against those most in need of care. In addition, the rule will raise prices for seniors and taxpayers, reduce benefits for those who choose an MA, and provide fewer plan options going forward. We encourage CMS to work with us by continuing our joint public-private partnership in health and finance. the stability of the American people.”

BIG TREND

The Medicare Advantage Risk Adjustment Data Validation Program is CMS’ primary tool for auditing and overseeing MA benefits.

As required by law, CMS payments to the MAO are adjusted based on the health of participants, which is determined based on medical diagnoses reported to the MAO.

IN RECORDING

“CMS is responsible for reimbursing overpayments for all of its programs, and improper Medicare Advantage payments are no exception,” said HHS Secretary Xavier Becerra. “For years, federal monitors and external experts have identified the Medicare Advantage program as one of the senior leadership and performance challenges facing HHS, and today we are taking long overdue steps to conduct audits and refunds.”

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