AHIP voiced its opposition to CMS’s
proposed rule which permits extrapolation during audits of Medicare Advantage plans
and lacks a fee-for-service adjuster.
August 30,
2019 - America’s Health Insurance Plans (AHIP) discouraged CMS from finalizing the
risk adjustment data validation (RADV) changes suggested in the agency’s Notice
of Proposed Rulemaking (NPRM) 2020 Medicare Advantage (MA)/Part D.
“The risk adjustment
data validation (RADV) changes in the proposed rule violate numerous statutory
requirements and are fundamentally unfair and ill-conceived,” Matt Eyles,
president and chief executive officer of AHIP, said in a written statement.
“Finalizing these provisions would undermine private sector confidence in the
agency’s willingness to comply with the law and to act as a fair business
partner – which could lead to higher costs, reduced benefits, and fewer MA plan
options for seniors.”
AHIP opposed the
proposed rule’s use of extrapolation for auditing of Medicare Advantage plans’
risk adjustment data validation and believed that the retroactive use of data from
previous years in audits violated the Social Security Act (SSA). The payer
organization also noted that the rule was missing a fee-for-service adjuster,
which AHIP said is necessary for distributing accurate payments.
The rule, proposed in November 2018 with the
Center for Program Integrity (CPI) which is the CMS program in charge of MA
plan RADV audits, would change the way CMS audits RADV in Medicare Advantage
contracts.
Risk adjustment data
validation seeks to ensure that CMS distributes proper payments to Medicare
Advantage health plans. Under the proposed rule, the CPI auditor would be
permitted to extrapolate, or to project a past or current trend onto a plan’s
whole population, a practice regularly used in Medicare audits.
To AHIP, however,
this is no routine auditing practice but a breach of the MA plan’s objective
and operations.
In its 104-page
comment letter, AHIP noted that Congress mandated
that MA plans maintain actuarial equivalence, or the same cash
value, with Original Medicare.
There is no
fee-for-service adjuster in the proposed rule, which is necessary to assess the equivalency between MA
plan payments and Original Medicare payments, the payer organization pointed
out.
Without a
fee-for-service adjuster, Medicare might make payments without documentation,
resulting in lower payments to plans, CMS believes. However, some studies have found Medicare Advantage
receives payments that are too high.
CPI would be
overstepping the bounds of its role by using extrapolation in its
analysis, AHIP said.
Extrapolation is a
power that the SSA gave only to Medicare contractors conducting an audit on
Medicare Parts A or B providers and their power to do so is not absolute.
AHIP not only
disagrees with CPI’s authority to extrapolate, but also with the efficacy of
extrapolation itself.
“Based on the
findings of a study by Wakely that identified several significant areas of
concern, we believe the extrapolation methodology CMS published in 2012 raises
serious policy concerns because it will produce arbitrary results,” the letter
states.
Furthermore, the rule
would be retroactive in that it enables CMS to extrapolate audits from as far
back as eight years ago. AHIP sees this in violation of SSA’s retroactivity
rules. Retroactivity causes problems for plans, which may have challenges
retrieving old paperwork or reconnecting with providers from several years ago.
Through retroactivity
and extrapolation, the rule imposes on the confidence between public and
private sector, AHIP argued. Private payers would not be able to trust the
agency when it intervenes, which AHIP said would undercut the free market and
the MA program and could lead to a drop in MA benefits, an increase in
spending, and the slimming down of MA plan choices.
AHIP also disputed
the fact that CPI began using the new method on 2014 audits without having
received public comments. The organization also noted that under the proposed
rule CPI would have the power to make alterations without a proper public
comment period, relying on Health Plan Management System notices.
“There is a better
way. We ask that CMS withdraw these provisions and work with us on real
solutions that are fair, accurate, and legally permissible,” AHIP said.
AHIP suggested that
RADV withdraw the proposal, stand against retroactivity, recognize the need for
an FFS adjuster, and discuss potential changes with MA health plans.
The remaining 99
pages of the AHIP letter included a summary of the proposal, expert opinions,
supportive studies by Milliman and Wakely, and arguments in support of an FFS
adjuster and against extrapolation and retroactivity.
“The RADV proposal
violates numerous statutory requirements and is fundamentally unfair and
ill-conceived,” AHIP concluded. “We urge CMS in the strongest possible terms to
withdraw it and establish a collaborative process with stakeholders to create a
workable alternative. We look forward to providing any additional information
you may need and to continuing to work together to improve the health of the
millions of Medicare beneficiaries our members serve.”
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