Master the upcoming ICD-10 code and IPPS changes! Prepare your team for the upcoming changes taking effect on October 1. Discover the benefits of IPPSPalooza and how it can drive your success. Click here >

What’s the Difference: Managed Care Organizations and Medicare Advantage

Asian accountant and woman at computer thinking while checking budget on work screen in office. Str

How many of you know that Medicare Advantage (MA) plans is a synonym of Managed Care Organizations (MCOs)? I’m talking about an analogy between Medicare and Medicaid.

I’m sure many of you made the connection right away, but it took me a minute. What is important to note is that MA plans and MCOs can act as Recovery Audit Contractors (RACs), Unified Program Integrity Contractors (UPICs), Targeted Probe-and-Educate (TPE), or whatever acronym you want to create, like the federal government so often does.

More people are choosing MA plans as a private insurance alternative to traditional Medicare. Similarly, on the state Medicaid front, Medicaid recipients are being forced to accept MCOs instead of traditional Medicaid. In the public sector, it would be like the government telling me that because I live in Wake County, North Carolina, if I am enrolled in MA, my plan must be with Blue Cross Blue Shield (BCBS), but if I am enrolled in Medicaid, my MCO must be Alliance.

These MA plans and MCOs are private companies, not nonprofits. Obviously, a company’s purpose is to create profit. This must be a key goal for any company; otherwise, they would not be in business.

Why am I writing about business 101?

Because every contract that the Centers for Medicare & Medicaid Services (CMS) signs is reviewed by the President. Well, maybe not Biden, but maybe Chiquita Brooks-LaSure (the Administrator of CMS). These contracts, like RAC contracts, incentivize finding fraud. We all know that the RAC contracts used to read, for example, if you accuse a provider of owing $12 million, the RAC will be paid 13.5 percent. Quite a payday for accusing a provider of committing a “credible allegation of fraud.” Congress, thankfully, changed the contingency fee to only be paid after appeals are litigated.

The government also audited MA plans.

These 90 federal audits revealed widespread overcharges and other errors in payments to MA plans, with some plans overbilling the government more than $1,000 per patient a year, on average. Why are we putting MA and MCOs in charge of managing our Medicare and Medicaid tax dollars? They are usurping a fire hose of tax dollars. They choose whether to contract with providers, whether to pay providers, what rate they should pay providers, whether the providers are following regulations, whether the providers owe recoupments, and much more. In my opinion we are giving these private insurance companies, like Aetna or Optum or BCBS, winning Powerball lottery tickets.

When the government audited MA plans a couple of years ago, the audits uncovered about $12 million in net overpayments for the care of 18,090 patients sampled, though the actual overall losses to taxpayers are likely much higher.

Officials at CMS said they intended to extrapolate the payment error rates from those samples across the total membership of each plan — and recoup an estimated $650 million from MA plans.

But years have passed, and that has yet to happen. CMS was set to unveil a final extrapolation rule on Nov. 1, 2022, but recently put that decision off until February 2023, which also did not happen.

The 90 audits are the only ones CMS has completed over the past decade, a time when Medicare Advantage has grown explosively. Enrollment in the plans more than doubled during that period, passing 28 million in 2022, at a cost to the government of $427 billion.

Some have claimed that CMS and the federal government in general have fallen short on their jobs to supervise these MA plans. So too have the state Medicaid departments fallen short.

Whether it’s the U.S. Department of Health and Human Services (HHS) Office of Inspector General (OIG), CMS, RACs, UPICs, or some other entity, someone should monitor or supervise the MA plans and MCOs as they reign over our tax dollars.

Maybe it should be us at RACmonitor.

Print Friendly, PDF & Email

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

Leave a Reply

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

Featured Webcasts

Mastering the Two-Midnight Rule: Keys to Navigating Short-Stay Admissions with Confidence

Mastering the Two-Midnight Rule: Keys to Navigating Short-Stay Admissions with Confidence

The CMS Two-Midnight Rule and short-stay audits are here to stay, impacting inpatient and outpatient admissions, ASC procedures, and Medicare Parts C & D. New for 2024, the Two-Midnight Rule applies to Medicare Advantage patients, requiring differentiation between Medicare plans affecting Case Managers, Utilization Review, and operational processes and knowledge of a vital distinction between these patients that influences post-discharge medical reviews and compliance risk. Join Michael G. Calahan for a comprehensive webcast covering federal laws for all admission processes. Gain the knowledge needed to navigate audits effectively and optimize patient access points, personnel, and compliance strategies. Learn Two-Midnight Rule essentials, Medicare Advantage implications, and compliance best practices. Discover operational insights for short-stay admissions, outpatient observation, and the ever-changing Inpatient-Only Listing.

Print Friendly, PDF & Email
September 19, 2023
Secondary Diagnosis Coding: A Deep Dive into Guidelines and Best Practices

Secondary Diagnosis Coding: A Deep Dive into Guidelines and Best Practices

Explore comprehensive guidelines and best practices for secondary diagnosis coding in our illuminating webcast. Delve into the intricacies of accurately assigning secondary diagnosis codes to ensure precise medical documentation. Learn how to navigate complex scenarios and adhere to coding regulations while enhancing coding proficiency. Our expert-led webcast covers essential insights, including documentation requirements, sequencing strategies, and industry updates. Elevate your coding skills and stay current with the latest coding advancements so you can determine the correct DRG assignment to optimize reimbursement, support medical decision-making, and maintain compliance.

Print Friendly, PDF & Email
September 20, 2023
Principal Diagnosis Coding: Mastering Selection and Sequencing

Principal Diagnosis Coding: Mastering Selection and Sequencing

Enhance your inpatient coding precision and revenue with Principal Diagnosis Coding: Mastering Selection and Sequencing. Join our expert-led webcast to conquer the challenges of principal diagnosis selection and sequencing. We’ll decode the intricacies of ICD-10-CM guidelines, equipping you with a clear grasp of the rules and the official UHDDS principal diagnosis definition. Uncover the crucial role of coding conventions, master the sequencing of related conditions, and confidently tackle cases with equally valid principal diagnoses.

Print Friendly, PDF & Email
September 14, 2023
2024 IPPS Summit: Final Rule Update with Expert Insights and Analysis

2024 IPPS Summit: Final Rule Update with Expert Insights and Analysis

Only ICD10monitor delivers what you need: updates on must-know changes associated with the FY24 Inpatient Prospective Payment System (IPPS) Final Rule, including new ICD-10-CM/PCS codes, plus insights, analysis and answers to questions from the country’s most respected subject matter experts.

Print Friendly, PDF & Email
2024 IPPS Summit Day 3: MS-DRG Shifts and NTAPs

2024 IPPS Summit Day 3: MS-DRG Shifts and NTAPs

This third session in our 2024 IPPS Summit will feature a review of FY24 changes to the MS-DRG methodology and new technology add-on payments (NTAPs), presented by senior healthcare consultant Laurie Johnson, with bonus insights and analysis from two acclaimed subject matter experts

Print Friendly, PDF & Email
August 17, 2023

Trending News