Grassley Drops Gloves on Alleged Medicare Advantage System Gaming

A powerful U.S. Senator is demanding answers regarding the perceived ineffectiveness of Centers for Medicare & Medicaid Services (CMS) efforts to address apparently sizeable overpayments to Medicare Advantage plans.

U.S. Sen. Chuck Grassley (R-Iowa) earlier this week sent a letter to newly confirmed CMS Administrator Seema Verma asking pointed questions about enormous disparities in anticipated and actual recoveries made in relation to such overpayments. Specifically, Grassley, the chairman of the Senate Judiciary Committee, cited a Center for Public Integrity estimate that $70 billion in risk score overpayments were made between 2008 and 2013 – a figure that, broken down by year, dwarfs CMS’s 2007 overpayment estimate of $128 million, which was followed by a settlement of just $3.4 million. 

“The difference in the assessment and the actual reovery is striking and demands an explanation,” Grassley wrote. “Further … (the $128 million estimate) appears low and could very well be just the tip of the iceberg.”

“By all accounts, risk score gaming is not going to go away,” Grassley added. “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.”

Grassley concluded the letter by asking Verma five specific questions, listed here verbatim:

  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 that 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’s position that it obligates $30 million per year auditing Medicare Advantage?

Medicare Advantage is an increasingly popular alternative to traditional Medicare; a report published online by Kaiser Health News this week noted that its privately run health plans have enrolled more than 18 million elderly and disabled people — about a third of those eligible for Medicare — at a cost to taxpayers approaching $200 billion a year.

“The plans also enjoy strong support in Congress,” the report read. “Medicare is supposed to pay the health plans higher rates for sicker patients and less for people in good health using a formula called a risk score.”

However, the Kaiser report noted that CMS records have revealed that billions of tax dollars are wasted annually in the program, partly because some health plans exaggerate how sick their patients are by inflating risk scores and boosting their payments improperly.

“The U.S. Government Accountability Office (GAO), the watchdog arm of Congress, has sharply criticized CMS for its failure to ferret out overcharges and in April 2016 called for ‘fundamental improvements’ in audits of Medicare Advantage plans. GAO also found that CMS has spent about $117 million on Medicare Advantage audits, but recouped just under $14 million in total,” the report read. “Medicare Advantage plans have (also) been the target of at least a half-dozen whistleblower lawsuits alleging patterns of overbilling and fraud.”

The Kaiser report further noted that details of the audits disclosing the $128 million in overpayments to health plans were part of a cache of confidential CMS documents released through a Freedom of Information Act lawsuit filed by the Center for Public Integrity. The documents reportedly identified the companies chosen for the initial Medicare Advantage audits as plans located in Florida, New Jersey, New Mexico, Pennsylvania, and Washington State.

 “In the audits, CMS repeatedly found that the health plans couldn’t document their patients were as sick as the insurer had claimed,” Kaiser’s report read. “For example, auditors couldn’t confirm that one-third of the diseases the health plans had been paid to treat actually existed, mostly because patient records lacked ‘sufficient documentation of a diagnosis.’”

Overall, Kaiser reported, Medicare paid the wrong amount for nearly two-thirds of patients whose records were examined; all five plans were far more likely to charge too much than too little. For 1 in 5 patients, the overcharges were $5,000 or more for the year, according to the audits.

EDITOR’S NOTE:

RACmonitor will be conducting a two-part educational webcast on Managed Care Organizations with Duane Abbey on May 25 and June 15, 2017 at 1:30 p.m. ET. 

Grasley 042017    U.S. Sen. Chuck Grassley (R-Iowa)

Print Friendly, PDF & Email
Facebook
Twitter
LinkedIn

Mark Spivey

Mark Spivey is a national correspondent for RACmonitor.com, ICD10monitor.com, and Auditor Monitor who has been writing and editing material about the federal oversight of American healthcare for more than a decade.

Related Stories

Leave a Reply

Please log in to your account to comment on this article.

Featured Webcasts

Leveraging the CERT: A New Coding and Billing Risk Assessment Plan

Leveraging the CERT: A New Coding and Billing Risk Assessment Plan

Frank Cohen shows you how to leverage the Comprehensive Error Rate Testing Program (CERT) to create your own internal coding and billing risk assessment plan, including granular identification of risk areas and prioritizing audit tasks and functions resulting in decreased claim submission errors, reduced risk of audit-related damages, and a smoother, more efficient reimbursement process from Medicare.

April 9, 2024
2024 Observation Services Billing: How to Get It Right

2024 Observation Services Billing: How to Get It Right

Dr. Ronald Hirsch presents an essential “A to Z” review of Observation, including proper use for Medicare, Medicare Advantage, and commercial payers. He addresses the correct use of Observation in medical patients and surgical patients, and how to deal with the billing of unnecessary Observation services, professional fee billing, and more.

March 21, 2024
Top-10 Compliance Risk Areas for Hospitals & Physicians in 2024: Get Ahead of Federal Audit Targets

Top-10 Compliance Risk Areas for Hospitals & Physicians in 2024: Get Ahead of Federal Audit Targets

Explore the top-10 federal audit targets for 2024 in our webcast, “Top-10 Compliance Risk Areas for Hospitals & Physicians in 2024: Get Ahead of Federal Audit Targets,” featuring Certified Compliance Officer Michael G. Calahan, PA, MBA. Gain insights and best practices to proactively address risks, enhance compliance, and ensure financial well-being for your healthcare facility or practice. Join us for a comprehensive guide to successfully navigating the federal audit landscape.

February 22, 2024
Mastering Healthcare Refunds: Navigating Compliance with Confidence

Mastering Healthcare Refunds: Navigating Compliance with Confidence

Join healthcare attorney David Glaser, as he debunks refund myths, clarifies compliance essentials, and empowers healthcare professionals to safeguard facility finances. Uncover the secrets behind when to refund and why it matters. Don’t miss this crucial insight into strategic refund management.

February 29, 2024
2024 ICD-10-CM/PCS Coding Clinic Update Webcast Series

2024 ICD-10-CM/PCS Coding Clinic Update Webcast Series

HIM coding expert, Kay Piper, RHIA, CDIP, CCS, reviews the guidance and updates coders and CDIs on important information in each of the AHA’s 2024 ICD-10-CM/PCS Quarterly Coding Clinics in easy-to-access on-demand webcasts, available shortly after each official publication.

April 15, 2024

Trending News

SPRING INTO SAVINGS! Get 21% OFF during our exclusive two-day sale starting 3/21/2024. Use SPRING24 at checkout to claim this offer. Click here to learn more →