HHS flags more than $9 billion in Medicare Advantage plan overpayments
A relatively small number of companies accounted for a big percentage of the overpayments.
A new investigation by the Department of Health and Human services (HHS) has ended with a recommendation for tighter oversight of some Medicare Advantage (MA) plans—which HHS said have submitted claims resulting in $9.2 billion in overpayments, using 2016 data.
The investigation by the HHS’ Office of the Inspector General (OIG) focused on MA plans, which are private plans used by 40% of Medicare beneficiaries (25 million enrollees) in the U.S. The study looked at risk-adjusted payments, which is a way that HHS provides additional payments for patients who may have more expensive conditions.
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“We undertook this evaluation because of concerns that companies with contracts under [MA] may leverage both chart reviews and health risk assessments (HRAs) to maximize risk-adjusted payments, without beneficiaries receiving care for those diagnoses. Unsupported risk-adjusted payments have been a major driver of improper payments in the MA program,” the OIG’s report said.
Small number of companies drive overpayments
One red flag for the OIG: a relatively small number of companies accounted for a big percentage of the overpayments.
“We found that 20 of the 162 MA companies drove a disproportionate share of the $9.2 billion in payments from diagnoses that were reported only on chart reviews and HRAs, and on no other service records,” the report said. “These companies’ higher share of payments could not be explained by the size of their beneficiary enrollment. Each company generated a share of payments from these chart reviews and HRAs that was more than 25 percent higher than its share of enrolled MA beneficiaries.”
In addition, one company was responsible for 40% of risk-adjusted payments ($3.7 billion), yet that company accounted for only 22% of MA beneficiaries. The company, which HHS did not name, reported a high number of at-home assessments for a small group of conditions, which the report called, “unusual.”
“Since in-home HRAs are often conducted by vendors hired by MA companies (and not likely conducted by beneficiaries’ primary care providers), this raises particular concerns about the quality of care coordination for these beneficiaries and the validity of diagnoses that were reported on the HRAs,” the report said.
OIG calls for a closer look at companies with questionable numbers
The report concluded by saying that the Centers for Medicare and Medicaid Services (CMS) should provide further oversight on the 20 companies with high rates of HRAs. The report said CMS should look at both the accuracy of the claims and the quality of care being provided by these companies. In addition, the report called for looking at the appropriateness and care in claims submitted by the one company that had a high share of payments.
The report also calls for periodic monitoring of companies submitting the kinds of claims that raised questions in this report. “CMS should use this information to provide targeted oversight of companies that consistently generate a share of payments that cannot be explained by their enrollment size,” the OIG report said.
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