Dive Brief:
- Aetna received an estimated $25.5 million in Medicare Advantage overpayments for 2015 and 2016, according to an audit by the HHS’ Office of the Inspector General.
- The audit analyzed seven groups of diagnosis codes that were at a high risk of being miscoded and determined medical records didn’t support the codes for 155 of the 210 sampled enrollee-years, resulting in $632,070 in overpayments. Based on the sample results, the OIG extrapolated that Aetna received at least $25.5 million in overpayments for 2015 and 2016.
- The payer pushed back on the results, with Patrick Jeswald, vice president and chief compliance officer for Medicare at CVS Health, writing in a response to the draft report that there were “numerous flaws” with the OIG’s methodology and its approach to the medical record review.
Dive Insight:
Medicare Advantage plans, which are administered by private insurers and paid for by the federal government, have grown increasingly popular over the past decade. More than half of eligible seniors are now enrolled in an MA plan, which typically offer additional benefits like dental coverage or vision and hearing care.
Under the MA program, the CMS makes monthly payments to plans based on a risk adjustment system that pays more when enrollees are sicker and could require additional healthcare resources.
But researchers and regulators have raised red flags about government overpayments to MA plans, arguing associated costs could jeopardize the entire Medicare program.
A report by the USC Schaeffer Center for Health Policy and Economics in June found overpayments could reach more than $75 billion this year as a result of favorable selection of healthier beneficiaries, coding intensity and quality bonuses.
Earlier this year, federal regulators began to crack down on overpayments. They announced plans to claw back billions and phase in changes to the risk adjustment system over three years.
Payers have fought back against the audit process. Humana, one of the largest MA insurers, sued the HHS last month over its plans to audit plans’ payments, calling the finalized rule “arbitrary and capricious.”
The audit report found most of the selected codes that CVS Health-owned Aetna submitted to the CMS for its risk adjustment program did not comply with federal standards and recommended that Aetna refund the $632,070 in overpayments.
In addition, the OIG recommended that Aetna identify similar instances of noncompliance outside of the report’s time frame and improve its compliance procedures.
Aetna disagreed with the audit approach and its recommendations, according to a statement from the insurer. In a response letter to the OIG, CVS’ Jeswald wrote the “most problematic” of the OIG’s methodology flaws was an “apparent expectation for perfect coding in the MA program.”
“The methodology’s flaw conflicts with a fundamental assumption of the risk adjustment system: The overreporting of some diagnosis codes offsets the underreporting of others, which achieves overall payment accuracy,” he wrote.
The letter also argued that the OIG’s approach relied on decisions by enrollees and conclusions drawn by subsequent providers, even though the initial physician made the diagnosis based on available information at the time.
