Revisions to Medicare Advantage Audit Procedures Impacting Payer Accountability
The Centers for Medicare & Medicaid Services (CMS) has taken a pivotal step by issuing a memo detailing revisions to its Medicare Advantage (MA) audit procedures for risk adjustment data validation (RADV). This change follows a legal decision challenging CMS's initial attempts to expand audit recoveries, highlighting the intricate balance between regulatory compliance requirements and payer accountability.
In response to the federal court's ruling, CMS has modified its approach to MA plan audits, resuming assessments dating back to the 2019 reimbursement year and preparing to initiate audits for the 2020 period. Despite judicial setbacks, CMS remains committed to enhanced oversight and rigorous recoupment from MA plans, while implementing process modifications to align with regulatory mandates.
Implications of the Court Decision
The decision by the Northern District of Texas nullified CMS's 2023 RADV final rule, which aimed to extrapolate findings from sample audits to wide MA enrollee groups, potentially recovering billions in overpayments. Consequently, CMS is now adopting an alternative RADV methodology, ensuring compliance with the court’s mandate while continuing comprehensive audits of each eligible MA contract.
A CMS spokesperson highlighted the agency's dedication to securing accurate MA payments through a thorough audit strategy. The RADV audits aim to verify the accuracy of government payments by meticulously reviewing medical records to support the diagnosis codes reported by insurers, an essential task for upholding industry standards.
Future Audit Strategies and Technological Integration
Addressing the historical concern over significant MA overpayments, CMS originally proposed a regulatory framework to enhance audit capabilities and recover approximately $4.7 billion over the next decade. However, these initiatives faced legal opposition from major insurers like Humana, who contested the measures to ensure payment parity with original Medicare.
Despite these legal challenges, CMS forges ahead with audits, addressing insurers’ operational concerns by extending timelines for record submissions and easing documentary requirements. The agency is also working on more targeted sample sizes and developing a streamlined schedule for future audits. Moreover, CMS explores technological advancements, including artificial intelligence tools, to bolster coding activities, although overpayment decisions remain human-driven.
Looking forward, CMS remains focused on maintaining audit integrity and transparency, committing to regular updates as audits progress. This evolving regulatory landscape is crucial for industry stakeholders, impacting financial and compliance operations within the Medicare Advantage program, and ensuring risk management aligns with national healthcare objectives.