Medicare Advantage plans are required to submit complete and accurate data on the services their enrollees receive–patient “encounter data”–but, according to the Medicare Payment Advisory Commission, they have never done so. To the extent Medicare Advantage plans submit data, the Office of the Inspector General (OIG) reports that they fail to disclose when they deny payment for services their enrollees receive. Consequently, OIG can’t oversee them adequately and combat fraud.
Th OIG finds that without the Medicare Advantage information concerning specifics about the services for which they are denying payment, the OIG cannot effectively understand, identify and address waste, fraud and abuse. As we know, in some significant fraction of instances, hospitals and other providers deliver services to MA enrollees for which the Medicare Advantage plans do not pay. When Medicare Advantage plans don’t pay for the services their enrollees receive, they threaten the viability of hospitals, particularly rural hospitals and hospitals serving low-income populations.
The OIG said that detailed encounter data, showing which claims are denied, is critical to fighting fraud and abuse. It allows the OIG to identify billing patterns that are suspect. The Centers for Medicare and Medicaid Services (CMS), which oversees Medicare, inexplicably does not require that information of the Medicare Advantage plans, even though CMS requires that information in traditional Medicare and for Medicaid health plans.
CMS simply requires that Medicare Advantage plans submit “claim adjustment reason codes” when they do not pay the amount a provider bills. Adjustment codes do not reflect with certainty whether a claim was denied. For example, a code might indicate: “The procedure or service is inconsistent with the patient’s history.” In these cases, sometimes the Medicare Advantage plan reports it paid, even though it would seem it had not.
Of note, in 2019 most MA encounter data contained at least 1 adjustment code, including 55 million that suggest the MA plan did not pay for the service.
If OIG and others knew which Medicare Advantage claims were denied, they could check for fraud and understand the full scope of fraud in a Medicare Advantage plan. However, CMS’s group that focuses on Medicare Advantage payments sees requiring this data as a burden on the Medicare Advantage plans.
The OIG explains why it does not see this requirement as a burden. First, the insurers offering Medicare Advantage plans enter information about denied claims for their Medicaid enrollees, so could easily do so for their Medicare enrollees. Second, it would make it easier for the Medicare Advantage plans to comply with OIG requests for information on denied claims. Third, if CMS moves to a system of using encounter data to determine Medicare Advantage costs and payments, as it has said it plans to do, CMS will need this information.
The OIG’s final recommendation is that CMS require the Medicare Advantage plans to show on their encounter data whether they paid the claim or not. Curiously, CMS took no position, even though OIG says it would enhance its ability to oversee Medicare Advantage and fight fraud.
Here’s more from Just Care:
- OIG finds widespread inappropriate care denials in Medicare Advantage
- OIG finds Medicare Advantage continues to overcharge government
- The choice between traditional Medicare and Medicare Advantage: It’s a sham
- Comment to CMS on its proposed changes to the way it calculates Medicare Advantage payments in 2024
- Rural hospitals need government help to survive
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