More scrutiny is expected for providers who serve patients covered by Medicare Advantage.
On Jan. 30, CMS said it will implement stricter auditing practices around MA plans, a move that could leave commercial payers collectively on the hook for up to $4.7 billion in repayments to the federal government over the next decade. The final rule will only apply to contracts dated from payment year 2018 and up.
Nearly every major insurance company has been accused of or settled allegations of MA fraud, which the industry disputes. Payers are accused of exploiting the program through "upcoding" schemes that make patients appear sicker on medical records than they actually are — thereby leading to higher payments from CMS. Some diagnoses are at a higher risk for being miscoded, which can also result in overpayments.
The new risk adjustment audit rule means that physicians and providers who serve Medicare Advantage enrollees are more likely to see increased oversight of how they document a patient's medical conditions.
"The level of effort for providers could easily change under this new policy," said Michael Stearns, MD, specialized consulting director of medical informatics at Wolters Kluwer.
"Then you look at the additional costs to avoid denials or queries from payers. [Organizations] might want to hire internal staff on the provider side to do reviews before they send the documentation off," he said. "This is all theoretical, but it's likely to happen."
MA experts had expected increased scrutiny around the public-private program this year, which recently hit a milestone of 30 million enrollees.
"To 'thrive' rather than simply 'survive,' plans need to embrace digital transformation," said Maggie Brown, regulatory compliance manager at HealthEdge, a firm that sells software to payers that modernizes plan designs and the payment integrity process. "Underneath these bothersome regulations, the intent is to improve transparency, improve population health, and remove barriers in care by supporting each other with clear and accurate information."
Though new regulations can be burdensome for both payers and providers, Ms. Brown noted that the recent increase in rulemaking around the MA program supports CMS' strategy toward more value-based care models.
"CMS is most definitely looking to share the risk, which is evidenced by the continued 'push' for value-based care and accountable care organizations," she said. "[MA] plans need to adjust their methodologies for creating their risk adjustment data valuation (RADV) to include, or further, include the care management (medical records) in the process to ensure that the claim diagnosis codes match to the medical records."
At an independent physician practice with a high volume of MA patients, Dr. Stearns says payers could start denying more claims because of a lack of evidence to support a diagnosis. With integrated health systems, he expects physicians to begin documenting conditions they didn't always document in the past. There will also likely be a need for more clinical documentation integrity specialists and healthcare coders with risk adjustment experience to meet increased demand.
"Integrated healthcare networks are going to hold the bar very high for their providers to document fully," he said.
And while Dr. Stearns believes the new risk adjustment rule is a move in the right direction for the healthcare system overall, it does introduce more documentation burden for providers.
"Provider education will play a key role, and they'll also have a lot more guidance," he said.
Becker's reached out to the American Medical Association for comment, which said it was still reviewing the final audit rule.