OIG Audits Add to Debate Over Extrapolation in Recovering MA Overpayments

by Lauren Flynn Kelly

 

As the Medicare Advantage industry draws attention for millions of net overpayments identified in a recent Kaiser Health News report on audits conducted by CMS, the HHS Office of Inspector General in two new reports seeks to recover estimated MA overpayments for inaccurate diagnosis codes. Separate from the contract-level Risk Adjustment Data Validation (RADV) audits used by CMS to verify the accuracy of MA organizations’ risk adjusted payments, the OIG audits may further support the notion that MA plans are overpaid. They also exemplify insurers’ fierce opposition to the use of sampling to approximate a plan’s true payment error rate.  BSBSRI’s medical records largely didn’t support sampled codes  In two reports released last month by the OIG’s Office of Audit Services, auditors found that most of the selected high-risk diagnosis codes submitted by the two MA sponsors did not comply with federal requirements. The reports determined that the government overpaid Blue Cross & Blue Shield of Rhode Island (BCBSRI) and California Physicians’ Service, Inc. (CPS) by roughly $4.9 million and $2 million, respectively, and recommended that they return the estimated overpayments.  In an audit of one BCBSRI contract serving some 53,000 MA beneficiaries, the OIG focused on nine groups of high-risk diagnosis codes for payment years 2016 and 2017. For that period, CMS paid the insurer approximately $1.1 billion to provide coverage to MA enrollees, including at least $4.8 million in net overpayments, estimated OIG. The review found that most of the selected diagnosis codes submitted by BCBSRI for risk adjustment purposes could not be supported by medical record documentation.  In response, BCBSRI asserted that the OIG audit did not follow CMS’s RADV methodology because its coders did not validate all diagnosis codes from “acceptable face-to-face visits, allowable providers, and according to ICD Guidelines.”  CPS: What about a fee-for-service adjuster?   Similarly, CPS in its comments on the OIG audit report disagreed with the agency’s calculations of net overpayments and said its sampling and review methodologies “improperly skewed towards identifying overpayments.”   CPS criticized the OIG approach for not including, identifying or acknowledging potential unrelated diagnoses that were not previously submitted to CMS. OIG, however, said it was beyond the scope of its audit to identify all possible diagnosis codes that the insurer could have submitted on behalf of the sampled enrollee-years and enrollees for whom CPS did not submit any risk-adjusted codes.  CPS then raised the issue of actuarial equivalence and OIG’s failure to apply an "FFS adjuster" to account for errors in the data used to create the risk adjustment model.  In its response to CPS, OIG wrote: “CMS has not issued any requirements that compel us to reduce our net overpayment calculations. If CMS deems it appropriate to apply an FFS Adjuster, it will adjust our overpayment finding by whatever amount it determines necessary.”

 

From Radar on Medicare Advantage

 

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