money in bills

The Centers for Medicare & Medicaid Services issued a final rule late Monday that aims to stop overpayments to Medicare Advantage (MA) plans and recoup money from the program.

The Risk Adjustment Data Validation (RADV) program rule addresses instances when a beneficiary’s medical record does not support medical diagnoses submitted for risk-adjusted payments to Medicare Advantage Organizations (MAOs). As part of the rule, CMS will extrapolate RADV overpayments beginning with the payment year 2018 audit.

The Social Security Act requires CMS to risk-adjust payments to MAOs. CMS pays MA plans a monthly amount for each beneficiary enrolled in a plan, which is adjusted to account for differences in health status among enrollees. Risk-adjusted payments are based on medical diagnoses submitted by MAOs and must be supported by enrollees’ medical records to ensure payments are accurate. The Office of Inspector General has found that that medical records do not always support the diagnoses reported by MAOs, which leads to billions of dollars in overpayments and increased costs to the Medicare program.

As part of the final rule issued Monday, CMS will only collect the non-extrapolated overpayments identified in the CMS RADV audits and OIG audits between PY 2011 and PY 2017.  

“CMS has a responsibility to recover overpayments across all of its programs, and improper payments made to Medicare Advantage plans are no exception,” HHS Secretary Xavier Becerra said in a statement. “For years, federal watchdogs and outside experts have identified the Medicare Advantage program as one of the top management and performance challenges facing HHS, and today we are taking long overdue steps to conduct audits and recoup funds. These steps will make Medicare and the Medicare Advantage program stronger.”

MA plans have been coming under increased scrutiny by government watchdogs. Last year, the Government Accountability Office accused MA plans of denying and delaying services and care to beneficiaries that are covered under Medicare. During a congressional hearing last summer, the executive director of the Medicare Payment Advisory Commission told lawmakers MA is not “meeting the potential” of lowering costs and improving care to seniors.

MA plans have been growing in popularity and are expected to comprise more than half of all eligible Medicare beneficiaries within the next couple of years.

This is a developing story. Please check back for updates.

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