Grassley Scrutinizes MA Plan Payments
This letter is a follow up to Senator Grassley’s May 19, 2015 inquiry to CMS regarding risk score gaming and the allegation that improper Medicare Advantage payments had resulted in approximately $70 billion in overpayments between 2008 and 2013. In his letter Senator Grassley requested that CMS disclose what actions have been undertaken to prevent fraudulent Medicare Advantage billing and to audit prior billing claims and, if appropriate, initiate recovery assessments.
According to the website, www.Medicare.gov, MA plans are a type of Medicare health plan offered by a private company that contracts with Medicare to provide an individual with Part A and Part B benefits. MA plans include Health Maintenance Organizations, Preferred Provider Organizations, Private Fee-for-Service Plans, Special Needs Plans and Medicare Medical Savings Account Plans. Medicare Advantage plans, commonly referred to as Part C, are offered by private companies who have been approved by Medicare. Approximately 18 million individuals, or one-third of those eligible for Medicare, are enrolled in MA plans. MA plans pay a fixed, or capitated amount, each month per beneficiary to provide health benefits to that individual. To make certain that capitated payments reflect the anticipated cost of providing care to each beneficiary these payments are risk adjusted to reflect the specific features of each enrolled beneficiary, including Medicaid eligibility, health status and demographics.
Senator Grassley is looking for CMS to closely scrutinize private MA plans amidst the ongoing concerns that these plans are overbilled annually by insurers. In the April 2017 letter Senator Grassley cited an article from The Center For Public Integrity (“TCFPI”) which focused on alleged overcharges “CMS officials initially thought that Medicare might have overpaid the five health plans by $128 million in 2017”. The letter goes on to note that this amount was not recovered and that a settlement was entered into for a fraction of the alleged overpayments, for $3.4 million. Senator Grassley further cites the TCFPI article “that Medicare paid the incorrect amount for almost two-thirds of patients reviewed and for 1 in 5 patients, the overcharges were $5,000 or more for the year”.
Senator Grassley acknowledges that for the unforeseen future risk score gaming is not going to be eliminated and therefore CMS must aggressively implement all of the tools available to ensure that fraud is identified and resolutions are implemented fairly and timely. In the letter, Senator Grassley requests that CMS provide answers to the following five questions:
1 – What steps will CMS take, or is currently taking, to ensure that insurance companies are not fraudulently altering risk scores? Please explain.
2 – Why did CMS not disclose to the Committee that it estimated Medicare overpaid five plans by $128 million in 2007?
3 – Why did the Obama Administration only recover $3.4 million from the CMS pilot audit rather than $128 million? Please explain.
4 – In the past two years, how many Medicare Advantage audits have been performed? How many audits are currently ongoing?
5 – Is it still CMS’ position that it obligates $30 million per year auditing Medicare Advantage?
With the aging population and the anticipated growth of participation in MA plans Senator Grassley is concerned that this may lead to further fraudulent billing. Senator Grassley notes “By all accounts, risk score gaming is not going to go away. Therefore, CMS must aggressively use the tools at its disposal to ensure that it is efficiently identifying fraud and subsequently implementing timely and fair remedies. The use of these tools is all the more important as Medicare Advantage adds more patients and billions of dollars of taxpayer money is at stake.”
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