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Miami Herald
28-05-2025
- Health
- Miami Herald
Medicare Advantage plans come under fire from DOGE
Health insurers are on alert after the Centers for Medicare & Medicaid Services announced May 22 that it is immediately expanding audits of all Medicare Advantage (MA) contracts and adding resources to complete overdue 2018-2024 audits. Many older Americans flock to Medicare Advantage programs because of cheaper premiums and, in some states, more over-the-counter (OTC) benefits like vision, dental, prescriptions and even food. Related: Fed official sends strong message about interest-rate cuts However, repeated studies have shown that MA coverage costs the federal government more than traditional Medicare, despite significant concerns that private insurers may deny justifiable care. Of the 67.3 million Americans enrolled in Medicare, approximately 35 million are in Medicare Advantage plans. Total federal Medicare spending is approximately $1 trillion annually but an estimated $84 billion goes to MA plans. Because of the way Medicare Advantage payments are structured, payouts are often adjusted upwards, in part for the additional OTC benefits not found in traditional Medicare. Some MA plans may use more aggressive diagnosis findings than what the patient actually has, a practice known as upcoding that raises reimbursements. Medicare Advantage plans receive risk-adjusted payments based on the diagnoses they submit for enrollees, meaning higher payments for patients with more serious or chronic conditions. To verify the accuracy of these claims, CMS conducts Risk Adjustment Data Validation (RADV) audits to confirm that medical records support diagnoses used for payment. Related: UnitedHealth Group stock tumbles; Andrew Witty steps down as group CEO Currently, CMS is several years behind in completing these audits. The last significant recovery of MA overpayments occurred following the audit of payment year (PY) 2007, despite federal estimates suggesting MA plans may overbill the government by approximately $17 billion annually. The Medicare Payment Advisory Commission (MedPAC) estimates this figure could be as high as $43 billion per year. CMS's completed audits for PYs 2011–2013 found between 5 and 8 percent in overpayments. To address this backlog, the Trump Administration has introduced a plan to complete all remaining RADV audits by early 2026. Key elements of the plan include: Enhanced Technology: CMS will deploy advanced systems to efficiently review medical records and flag unsupported Expansion: CMS will increase its team of medical coders from 40 to approximately 2,000 by Sept. 1, 2025. These coders will manually verify flagged diagnoses to ensure Audit Volume: By leveraging technology, CMS will be able to increase its audits from ~60 MA plans a year to all eligible MA plans each year in all newly initiated audits (approximately 550 MA plans). CMS will also be able to increase from auditing 35 records per health plan per year to between 35 and 200 records per health plan per year in all newly initiated audits based on the size of the health plan. This will help ensure CMS's audit findings are more reliable and can be appropriately extrapolated as allowed under the RADV final rule. These and other financial issues are fueling the CMS audits of the four Medicare Advantage insurers, all ignited by President Trump and the Department of Government Efficiency, or DOGE, commitments to eliminate federal spending waste, fraud and overpayments. Related: Bankrupt retail chain closing hundreds of store locations UnitedHealthGroup (UNH) , rocked by months of personal and professional trauma, Elevance Health (ELV) , CVS Health's Aetna (CVS) and Humana (HUM) are the four healthcare insurers undergoing the CMS MA audits. CMS will collaborate with the Department of Health and Human Services Office of Inspector General (HHS-OIG) to recover uncollected overpayments identified in past audits to ensure all MA plans comply with federal requirements and accurately report patient diagnoses Dozens and dozens of MA plans are pulling coverage out of mostly rural, poor areas because their parent companies are losing money there. As a result, many hospitals and healthcare providers closed, leaving patients without nearby healthcare options. Also, the transition from an Medicare Advantage plan to a traditional Medicare plan is not easy in some states, especially for patients with serious existing medical conditions. These and other financial issues are fueling the CMS audits of the four MA insurers, all ignited by President Trump and the DOGE commitments to eliminate federal spending waste, fraud and overpayments. Related: Medicare recipients face a growing problem The Arena Media Brands, LLC THESTREET is a registered trademark of TheStreet, Inc.
Yahoo
23-05-2025
- Business
- Yahoo
CMS expands audits to crack down on Medicare Advantage overpayments
This story was originally published on Healthcare Dive. To receive daily news and insights, subscribe to our free daily Healthcare Dive newsletter. The CMS will crack down on overpayments to Medicare Advantage plans, moving to significantly expand its capacity to audit whether insurers are inflating their enrollees' illnesses, the agency said Wednesday. Beginning immediately, the CMS will review all eligible MA contracts each payment year in newly initiated audits. The agency will also invest more resources to speed audits from payment years 2018 to 2024, planning to complete these older reviews by early 2026. To tackle a backlog of reviews from earlier payment years, the agency plans to use 'enhanced technology' to quickly review medical records and significantly increase its workforce of medical coders, the CMS said in a press release. The MA program, where private insurers contract with the federal government to manage beneficiaries' care, has become increasingly popular among seniors, now enrolling more than half of the eligible Medicare population. However, MA has been dogged by accusations from researchers and lawmakers that the program is increasing costs for the federal government by exaggerating the sickness of its members for increased reimbursement. MA plans are paid a fixed amount each month per member, adjusted for enrollees' health risks. Beneficiaries in the privatized plans tend to rack up more diagnosis codes than those in traditional Medicare, driving up their health risks and thus payments to insurers, according to a report by congressional advisory MedPAC published in March. Medicare will spend $84 billion more on MA enrollees this year than it would if those beneficiaries were in the traditional fee-for-service program, mostly due to favorable selection of healthier beneficiaries and coding intensity, according to the MedPAC report. The CMS conducts Risk Adjustment Data Validation audits to ensure that diagnoses used for payment are supported by medical records. But the agency said Wednesday it's several years behind in completing these reviews, noting the last significant recovery of MA overpayments took place following an audit of payment year 2007. To manage the backlog, the CMS said it will deploy 'advanced systems' to efficiently review medical records and flag potentially inflated diagnoses, according to a press release. Using technology will help the agency increase the number of audits from around 60 MA plans per year to about 550 plans, the CMS said. The agency also expected it can increase the records reviewed per plan each year from 35 to up to 200 records, based on the size of the health plan, according to the press release. The agency didn't respond to a request for comment by press time on what kind of technology it will use. Additionally, the CMS said it will increase its team of medical coders, who will manually verify flagged diagnoses, from 40 to about 2,000 by Sept. 1. The agency will also work with the HHS' Office of Inspector General to recover overpayments identified in past audits. 'We are committed to crushing fraud, waste and abuse across all federal healthcare programs,' CMS Administrator Dr. Mehmet Oz said in a statement. 'While the Administration values the work that Medicare Advantage plans do, it is time CMS faithfully executes its duty to audit these plans and ensure they are billing the government accurately for the coverage they provide to Medicare patients.' The Better Medicare Alliance, a lobbying group for the MA industry, said the move is the 'right approach' to ensure payment accuracy in the program. 'Medicare Advantage already includes strong accountability mechanisms and consistently enforcing them will help the program work even better for seniors and taxpayers alike,' Mary Beth Donahue, BMA's president and CEO, said in a statement. 'We look forward to working with CMS to ensure the methodology is accurate and appropriate.' Though its 'difficult to size' the potential challenges for insurers from the expanded audit plans, it could be an 'incremental headwind' for managed care organizations, especially insurers like Humana, CVS and UnitedHealth, J.P. Morgan analysts wrote in a Wednesday note. Oz, who was sworn in as head of the CMS last month, pledged to scrutinize MA insurers during his confirmation hearing earlier this year. Democrats had raised concerns about Oz's previous advocacy for the privatized Medicare plans, as well as his financial ties to major MA insurer UnitedHealth. His plans to expand the CMS' medical coding workforce also follows large-scale layoffs at the HHS. This spring, the department said it would reorganize and lay off 10,000 full-time employees, including cutting around 300 jobs at the CMS. Recommended Reading Dr. Oz vows to scrutinize Medicare Advantage as CMS head
