Dive Temporary:
- A Medicare Benefit plan run by CVS inflated diagnoses for its members between 2018 and 2019, leading to virtually $7 million in estimated overpayments, based on a brand new audit by the HHS Workplace of the Inspector Normal.
- Final week, the HHS OIG revealed an audit of Coventry Well being and Life Insurance coverage Firm that discovered the massive majority of diagnoses that Coventry submitted to the CMS to justify its members’ well being wants have been unsupported by medical data from precise suppliers.
- Regulators beneficial that Coventry seek for different situations of noncompliance following the audit interval and refund the $7 million, together with any extra overpayments it’s in a position to establish. Coventry, which largely disagreed with the audit’s findings, refused.
Dive Perception:
A majority of Medicare beneficiaries are actually enrolled in Medicare Benefit plans, by which non-public payers obtain a month-to-month lump sum from the CMS for managing their care. That reimbursement is adjusted primarily based on enrollees’ well being wants, so insurers receives a commission extra for sicker members. The federal government tracks enrollees’ well being by analysis codes collected by their MA insurer.
The purpose of this association was to incentivize insurers to regulate healthcare prices for Medicare seniors, saving the federal government cash whereas enhancing upstream major care. It’s additionally inadvertently resulted in a apply known as upcoding, by which insurers exaggerate the well being dangers of their members to artificially inflate their reimbursement.
Upcoding is a critical difficulty. MA plans are anticipated to see a cost enhance of 10% this yr in comparison with conventional Medicare as a result of upcoding alone, based on congressional advisory group MedPAC. Over the subsequent decade, upcoding may result in Medicare overpaying MA plans by $600 billion, per a Committee for a Accountable Federal Price range evaluation of MedPAC’s findings.
The HHS OIG’s audit of Coventry is the most recent in a sequence of critiques checking the accuracy of analysis codes that MA organizations undergo the CMS. The audit, which ran from July 2022 by this previous October, recognized diagnoses at the next danger for being miscoded and grouped them into particular classes, like acute stroke, sepsis or prostate most cancers.
It discovered that almost all medical data supplied by Coventry didn’t help the analysis codes, and that in lots of instances Coventry couldn’t discover any verifying affected person documentation in any respect.
“Coventry’s insurance policies and procedures to stop, detect, and proper noncompliance with CMS’s program necessities, as mandated by Federal rules, may very well be improved,” HHS OIG wrote in its report. “On the idea of our pattern outcomes, we estimated that Coventry acquired at the least $6,995,522 in web overpayments for 2018 and 2019” — roughly 0.2% of the $3.5 billion in whole reimbursement that Coventry acquired from the federal government throughout that interval.
In response, St. Louis-based Coventry mentioned the federal government’s audit methodology was biased as a result of it targeted on analysis codes that have been at excessive danger of leading to overpayments as a substitute of coding for its whole inhabitants, by which situations may very well be exaggerated for some sufferers however underexaggerated for others.
“We imagine OIG’s Draft Report departs from clear and opposite Medicare steerage — together with from OIG itself — and contributes to the misunderstanding that MA plans are gaming the system,” Patrick Jeswald, CVS’ chief compliance officer for Medicare, wrote in a letter to the company.
“We now have regarded critically at our danger adjustment applications and supplier contracts and can proceed to take action. But regardless of all of this work, it is going to by no means be attainable to make sure the hundreds of suppliers servicing MA members will code the tens of millions of submissions precisely each time,” Jeswald added.
CVS didn’t conform to pay again the estimated overpayments, saying the HHS OIG’s $7 million estimate was flawed and that OIG has no statutory authority to ask for a refund.
Coventry covers virtually 200,000 MA enrollees.
Upcoding just isn’t distinctive to CVS. The HHS OIG has carried out greater than twenty such audits, with most of them discovering nearly all of analysis codes submitted by MA organizations aren’t supported by proof — together with for plans run by Humana, Cigna, Centene and different insurance coverage corporations.
Although President Donald Trump’s election was seen as a web optimistic for the large MA trade, high healthcare regulators in his administration has been extra open to cracking down on practices like upcoding than many anticipated.
CMS Administrator Mehmet Oz, who has supported MA plans previously, mentioned throughout his affirmation hearings that he deliberate to closely scrutinize the privatized Medicare plans — a promise Oz adopted by on final month when the CMS introduced it deliberate to ramp up MA overpayment audits.
Republicans in Congress have additionally mentioned they’re contemplating concentrating on fraud, waste and abuse in Medicare of their huge reconciliation invoice at the moment being reviewed by the Senate. Although, some members of management have walked again their earlier feedback, involved in regards to the political blowback from touching the large federal insurance coverage program after influential payer lobbies argued any reform of coding practices would quantity to an assault on Medicare seniors.
