With Final RADV Rule Out, MAOs Are Advised to Clean Up Risk Adjustment Practices

With Final RADV Rule Out, MAOs Are Advised to Clean Up Risk Adjustment Practices   by Lauren Flynn Kelly   Medicare Advantage organizations may not have gotten the outcome they were hoping for in CMS’s recently finalized Risk Adjustment Data Validation rule, but industry experts say they weren’t surprised by the position CMS ultimately took after years of pressure to close out RADV audits and recover identified overpayments. And while one aspect of the rule could expose it to litigation and further delay CMS’s attempts to collect overpayments from MAOs, experts say plans still would be wise to sharpen their risk adjustment practices in order to limit their audit exposure.   Health plans should ‘be diligent’ “At first blush, I think it’s a pretty straightforward rule from an agency position standpoint and gives people more clarity,” remarks Tricia Beckmann, director with Faegre Drinker Consulting. In general, the rule contained “no major shifts” in CMS’s philosophy around conducting RADV audits, “but I think not doing extrapolation from 2011 to 2018 is a pretty reasonable adjustment for those plans that were expecting maybe something more dramatic.” “The lesson for health plans is: Be diligent,” says Steve Arbaugh, Principal and CEO with ATTAC Consulting Group, a national consulting and auditing firm serving government health care programs. Best practices to employ include looking closely at prior CMS and OIG (Office of Inspector General) audit findings of high-risk areas where diagnoses were miscoded and assessing your own coding practices to see if similar patterns exist, he advises. Arbaugh points out that CMS was recently conducting 2015 RADV audits, while OIG has over the last year released multiple reports on findings from 2016 and 2017 and conducted audits in a targeted fashion by looking at certain high-risk groups of disease codes. To the extent that CMS has attempted to collect extrapolated overpayments stemming from the OIG audits, the final rule means CMS would only be able to seek amounts for the findings based on individual enrollee results. Who will be selected for audits? CMS explained in the rule that when it began conducting RADV audits, it chose “stratified random samples of enrollees,” including in the already completed 2011 to 2013 audits, which looked at 30 contracts per year. But based on suggestions from the Government Accountability Office, which released multiple reports over the last decade urging CMS to improve and speed up its RADV processes, the agency began “incorporating the potential risk of improper payments to MAOs, based on past audit findings and other factors, into selecting enrollee samples for audits,” CMS noted. It is important to note that CMS plans to use data analytics and its own insight to determine which contracts are selected for audits starting with payment year 2018, said risk adjustment consultant Richard Lieberman during a Jan. 31 webinar hosted by Evercore ISI. He suggested that CMS is likely to use information from its regional offices to “identify the bad actors, the contracts that they have concerns about,” and if a plan has rubbed a regional officer the wrong way, that could factor into the selection.  While Beckmann said she doesn’t anticipate a “huge cloud of litigation” that will make it difficult for CMS to move forward, courts could be sympathetic to any argument that CMS violated the Administrative Procedure Act by retrospectively applying extrapolation methodology to 2018 audits.   From Radar on Medicare Advantage   Subscribers may read the in-depth article online. Learn more about subscribing to AIS Health's publications.