CMS will audit every Medicare Advantage plan for potential overpayments annually, in what the agency called an “aggressive” plan to step up oversight.
According to a May 21 news release, the agency plans to audit each of the more than 500 MA plans each year. Currently, the agency audits around 60 plans each year.
“While the administration values the work that Medicare Advantage plans do, it is time CMS faithfully executes its duty to audit these plans and ensure they are billing the government accurately for the coverage they provide to Medicare patients,” CMS Administrator Mehmet Oz, MD said.
MA plans are paid for by the federal government based on enrollees’ health status. Sicker enrolees receive higher reimbursement.
CMS conducts risk-adjustment data validation audits to confirm the diagnoses MA plans bill the federal government for are backed by health records. The Medicare Payment and Advisory Commission estimates MA plans could receive up to $43 billion in overpayments from diagnoses not backed by medical records each year.
The agency plans to expand its team of medical coders from 40 to around 2,000 by Sept. 1 to support the new audit effort, according to the news release. The agency will also use “enhanced technology” to review medical records.
UnitedHealth Group, the largest MA insurer, said it supports CMS auditing each MA plan annually, a policy it has “long publicly advocated for.”
“We look forward to working with CMS to develop an accurate methodology and appropriately use advanced technology to greatly enhance the auditing process,” the company wrote on LinkedIn May 21.
CMS will also step up efforts to recover uncollected payments from past audits and complete remaining audits from 2018 to 2024. The last significant recovery of overpayments was audits of plan year 2007, according to the agency.
The Better Medicare Alliance, a pro-MA group backed by insurers, also supports the new policy.
“Medicare Advantage already includes strong accountability mechanisms and consistently enforcing them will help the program work even better for seniors and taxpayers alike,” President and CEO Mary Beth Donahue said in a statement shared with Becker’s.
