Medicare Advantage Audits Are “the New Black”

Young man businessman sitting at his working table in office

MA plans have grown to now cover more than 40 percent of all Medicare beneficiaries, and with that has come more fraud and abuse.

In case you didn’t know, instead of orange, Medicare Advantage (MA) is “the new black.” Since MA plans are paid more for sicker patients, there are huge incentives to fabricate co-morbidities that may or may not exist.

Medicare Advantage appears primed to become the most-audited arena in healthcare. Home health, behavioral health, and the two-midnight rule had held the gold medal for highest number of audits, but MA may soon prevail.

As an example, last week, a New York health insurance plan for seniors, along with DxID, the medical analytics company with which the insurer is affiliated, was accused by the U.S. Department of Justice (DOJ) of committing healthcare fraud to the tune of tens of millions of dollars. These alleged sums are exceedingly high, which also attracts auditors – especially the auditors that are paid on contingency fee, which is almost all of them.

The Centers for Medicare & Medicaid Services (CMS) pays Medicare Advantage plans using a complex formula called a “risk score,” which is intended to render higher rates for sicker patients and less for those in good health. The aforementioned data-mining company combed through electronic medical records to identify missed diagnoses, pocketing up to 20 percent of new revenue it generated for the health plan. But the DOJ alleges that DxID’s reviews triggered “tens of millions” of dollars in overcharges when those missing diagnoses were filled in with exaggerations of how sick patients were, or with charges for medical conditions the patients did not have.

MA plans have grown to now cover more than 40 percent of all Medicare beneficiaries, and with this have come more fraud and abuse. A 2020 report by the U.S. Department of Health and Human Services (HHS) Office of Inspector General (OIG) found that MA paid $2.6 billion a year for diagnoses unrelated to any clinical services.

Diagnosis fraud is the main issue upon which auditors are focusing. Juxtapose the other alphabet-soup auditors – MACs, SMRCs, UPICs, ZPICs, MCOs, TPEs, RACs – and it becomes clear that they concentrate on documentation nitpicking. I once had a client accused of fraud, waste, and abuse (FWA) for using purple ink. Other examples include purported failure to write the times “in or out” when the CPT® code definition includes the amount of time.

Audits will be ramping up, especially since HHS has reduced the Medicare appeals backlog at the administrative law judge (ALJ) level by 79 percent, which puts the department on track to clear the backlog by the end of the 2022 fiscal year.

As of June 30, 2021, HHS had 86,063 pending appeals remaining at the Office of Medicare Hearings and Appeals (OMHA), according to the latest status report, acquired by the American Hospital Association (AHA). The department started with 426,594 appeals. This is progress!

Programming Note: Listen to healthcare attorney Knicole Emanuel’s RAC Report every Monday on Monitor Mondays, 10 a.m. EST.

Facebook
Twitter
LinkedIn
Email
Print

Knicole C. Emanuel Esq.

For more than 20 years, Knicole has maintained a health care litigation practice, concentrating on Medicare and Medicaid litigation, health care regulatory compliance, administrative law and regulatory law. Knicole has tried over 2,000 administrative cases in over 30 states and has appeared before multiple states’ medical boards. She has successfully obtained federal injunctions in numerous states, which allowed health care providers to remain in business despite the state or federal laws allegations of health care fraud, abhorrent billings, and data mining. Across the country, Knicole frequently lectures on health care law, the impact of the Affordable Care Act and regulatory compliance for providers, including physicians, home health and hospice, dentists, chiropractors, hospitals and durable medical equipment providers. Knicole is partner at Nelson Mullins and a member of the RACmonitor editorial board and a popular panelist on Monitor Monday.

Related Stories

What Everyone Knows About You

What Everyone Knows About You

It’s all in the data: and it’s available. A few years ago, I was giving a presentation to a group of cardiologists. I provided to

Read More

New Workflow Manages DRG Mismatches

Workflow increases productivity, while proving itself to be successful in reconciling DRG mismatches. When asking many clinical documentation improvement specialists (CDISs) what they dislike most

Read More

Leave a Reply

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

Featured Webcasts

Mastering Good Faith Estimates Under the No Surprises Act: Compliance and Best Practices

Mastering Good Faith Estimates Under the No Surprises Act: Compliance and Best Practices

The No Surprises Act (NSA) presents a challenge for hospitals and providers who must provide Good Faith Estimates (GFEs) for all schedulable services for self-pay and uninsured patients. Compliance is necessary, but few hospitals have been able to fully comply with the requirements despite being a year into the NSA. This webcast provides an overview of the NSA/GFE policy, its impact, and a step-by-step process to adhere to the requirements and avoid non-compliance penalties.

Mastering E&M Guidelines: Empowering Providers for Accurate Service Documentation and Scenario Understanding in 2023

Mastering E&M Guidelines: Empowering Providers for Accurate Service Documentation and Scenario Understanding in 2023

This expert-guided webcast will showcase tips for providers to ensure appropriate capture of the work performed for a visit. Comprehensive examples will be given that demonstrate documentation gaps and how to educate providers on the documentation necessary to appropriately assign a level of service. You will gain clarification on answers regarding emergency department and urgent care coding circumstances as well as a review of how/when it is appropriate to code for E&M in radiology and more.

June 21, 2023
Breaking Down the Proposed IPPS Rule for FY 2024: Top Impacts You Need to Know

Breaking Down the Proposed IPPS Rule for FY 2024: Top Impacts You Need to Know

Set yourself up for financial and compliance success with expert guidance that breaks down the impactful changes including MS-DRG methodology, surgical hierarchy updates, and many new technology add-on payments (NTAPs). Identify areas of potential challenge ahead of time and master solutions for all 2024 Proposed IPPS changes.

May 24, 2023

Trending News