For years, the federal government has been overpaying Medicare Advantage plans tens of millions of dollars for wrongful or fraudulent diagnosis codes without trying to recoup almost any of that money. A new government rule designed to “improve program integrity and payment accuracy” in Medicare Advantage allows these corporate health plans to keep all but a tiny fraction of that money. What’s worse is that the rule continues a defective payment system that allows hundreds of billions in overpayments resulting from “upcoding”–a practice that allows Medicare Advantage plans to add diagnoses codes to patient records regardless of whether they provide services to treat the conditions associated with the codes–to grow.
As a result of the rule, CMS plans to recoup just $4.7 billion in overpayments from fraudulent or erroneous Medicare Advantage billing beginning in 2018. Publicly, the Medicare Advantage plans are balking, but I bet that they are laughing all the way to the bank. CMS has opted not to collect these improper overpayments from the seven years prior to 2018, is still completing audits to calculate overpayments from 2014 and 2015, and will not try to collect any overpayments until after it completes its 2018 audit some time down the road. Almost certainly, CMS will need to fight the insurers in court to claw back the overpayments. Moreover, CMS has done nothing to address the estimated $124 billion in additional Medicare Advantage overpayments from what is likely permissible upcoding.
Fred Schulte reports for Kaiser Health News that the Medicare Advantage plans are not likely to feel the effect of this new government rule. That’s an understatement. Here’s a priceless quote from Dara Corrigan, director of the CMS’s Center for Program Integrity. “The recoveries that we’ll make are less than one-fifth of 1% of the amounts paid to Medicare Advantage plans,”
Officially, Medicare Advantage plans can keep virtually all overpayments based on wrongful diagnosis codes between 2011 and 2017. Unofficially, they can keep all overpayments of this nature for the foreseeable future. CMS has not even completed audits of Medicare Advantage plans from 2011.
Plain and simple, CMS does not have resources to conduct timely audits of Medicare Advantage plans or the tools to ensure that tens of millions of dollars in overpayments are returned to Medicare coffers expeditiously. If you ask me, that’s reason enough to terminate Medicare Advantage. Even if CMS eventually attempts to collect the overpayments Medicare Advantage plans have received as of 2018, the insurers have said they will contest this clawback in court.
A CMS Deputy Administrator says the rule is a “commonsense approach to oversight,” without claiming to know the amount of excess payments the Medicare Advantage plans will keep. If this is commonsense oversight, Congress should protect the integrity of the Medicare Trust Fund and end Medicare Advantage. Health and Human Services Secretary Becerra appears to recognize that this is not meaningful accountability, saying merely that it is a “move” in that direction.
It is beyond comprehension that an additional hundreds of billions in Medicare Advantage overpayments appear to be baked into the Medicare Advantage program, as MedPAC has reported. And, CMS does not appear to be doing anything about it.
It could not be clearer that the government’s capitated payment system for Medicare Advantage leads to billions of dollars in overpayments and no ability to recoup the money. Congress must change the way Medicare Advantage plans are paid or end the program entirely. Medicare’s sustainability is on the line.
Here’s more from Just Care:
- Government overpayments to Medicare Advantage plans grow, while concerns remain about quality of care
- Case study: Medicare Advantage delays, denials and consequences
- Traditional Medicare v. Medicare Advantage? Different as night and day
- Government rules won’t curtail Medicare Advantage bad acts without stiff penalties
- Traditional Medicare at risk with ACO REACH
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