CMS last audited Medicare Advantage plans nine years ago, in 2013, and found millions of overpayments in just a small sampling of Medicare Advantage plans. But, instead of continuing and expanding its audits, it ended them and hid information about the audits it had performed. Kaiser Health News obtained the audit data three years after filing a Freedom of Information Act request and found that CMS had failed to hold Medicare Advantage plans accountable for millions in overcharges and to recoup the overpayments.
Over the three-year period between 2011 and 2013, CMS conducted 90 audits of Medicare Advantage plans. It audited 30 of the 1,000 or so Medicare Advantage plans each year. In analyzing the data, Kaiser Health News found that some Medicare Advantage plans overcharged taxpayers $1,000 more than they should have for each enrollee in one year!
CMS audits found around $12 million in overpayments for the 18,090 Medicare Advantage plan enrollees it sampled. But, overpayments across all enrollees are very likely a lot higher. More than ten years after conducting some of its audits, CMS now says it will assess payment error rates for the whole enrollee population of the Medicare Advantage plans it audited. But, Medicare Advantage plans understandably do not like the idea of CMS extrapolating overpayment rates, and CMS has never done so.
If CMS were to try to recoup the overpayments, it says it would recover $650 million. But, after ten years, CMS says it hasn’t calculated how much it would recover from the audited MA plans. It has not conducted an audit of these plans since 2013 notwithstanding its findings of significant overpayments back then.
Moreover, CMS has not yet issued a rule for extrapolating recoupment amounts from Medicare Advantage plans. One former employee who oversaw fraud and abuse put the issue succinctly: “I think CMS fell down on the job on this.” CMS seems to be “carrying water” for Medicare Advantage plans.
Ten of 11 audit results showed that overpayments to Humana were above $1,000 per enrollee on average. Touchstone Health HMO, based in New York, had overpayments averaging $5,888 for each enrollee. CMS canceled its Medicare Advantage plan contract with Touchstone but not with Humana.
CMS also found that it had underpaid some Medicare Advantage plans.
Of course, Medicare Advantage plans do not like these audits. They appear to have done a great job of making the audits go away these last nine years.
The upshot: Medicare Advantage plans know that they can overcharge taxpayers with near impunity, and many clearly continue to do so. The HHS Office of the Inspector recently conducted an audit of Humana Medicare Advantage in Florida for 2015 and found almost $200 million in overpayments.
Here’s more from Just Care:
- Four things to think about when choosing between traditional Medicare and Medicare Advantage plans
- Ten ways to improve Medicare Advantage
- Well-kept secrets of Medicare Advantage plans
- OIG finds widespread inappropriate care denials in Medicare Advantage
- Medicare Advantage plans are an “Insatiable Cash Monster”