Complying with tougher Medicare Advantage audits: 5 things payers and providers should know

As CMS prepares to implement tougher risk adjustment data validation audits in Medicare Advantage, payers and providers can take steps to boost their compliance efforts. 

In a final rule issued Jan. 30, the agency said it will strike the fee-for-service adjuster from risk adjustment data validation audits, a tool that would have calculated a permissible level of payment errors and limited audit recoveries to payment errors above that level.

John Kelly, healthcare department and industry practice chair at law firm Barnes & Thornburg, sat down with Becker's to explain the effects of the ruling and what payers and providers should know about compliance. 

Some payers have signaled they intend to challenge the final rule. 

Matt Eyles, president and CEO of health insurance trade group AHIP, told Becker's ahead of the ruling the association believes the rule is "unlawful in terms of its construction." 

Mr. Kelly said any legal challenges to the rule will likely center on the lack of a fee-for-service adjuster, which insurers could argue unfairly impacts MA beneficiaries. 

Here are five things payers and providers should know about tougher auditing standards, according to Mr. Kelly: 

  1. Plans should continue to invest in compliance programs.

    "If the government is taking certain steps to assess how diagnosis codes are being used, and how payments are being made, you need to be doing the same thing," Mr. Kelly said. "You need to understand HOW they're assessing the data, because it helps you in terms of your compliance program." 

  1. It's OK to use risk adjustment codes — but they have to be accurate.

    "That's the mantra you have to have from a compliance and legal perspective. Whether you're a Medicare Advantage organization, whether you're a managed services organization, whether you're the actual provider, you really have to make sure people understand that it has to be accurate coding," he said. 

  1. Not only should records be accurate, they need to be as complete as possible.

    "Let's say you've got a patient that has cancer. Obviously, in theory, that patient is very sick and it should, in theory, increase your risk adjustments. But if the record doesn't show not just the cancer diagnosis, but there should be specialists, there should be oncology reports, certain therapeutic medicines or treatments that are being provided to that patient," he said. "If you're not seeing those kinds of things in the record, that's a problem."

  1. Providers who are coding patients accurately should not need to make any change to comply with the new rules.

    "The providers that have to be concerned are the ones that are not coding as accurately as they need to or are not including information in the record," he said. 

  1. As Medicare Advantage enrollment continues to grow, Medicare Advantage organizations should expect more scrutiny from regulators.

    "The more beneficiaries there are, the more dollars there are at play. The more dollars at play, the more risk for fraud, waste and abuse. It all goes hand-in-hand, and you're going to see a tremendous amount of activity in this space," Mr. Kelly said. 

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