Nothing hurts worse than a hit on your wallet.
Back in September, Kaiser Health News (KHN) issued a statement on newly released federal medicare audits that revealed universal overcharges and other errors in payment to Medicare Advantage Health. These overcharges are set to affect senior patients, with some being overbilled $1,000 per year. Ninety audits examining billing from 2011 through 2013 were obtained strictly by the KHN through the three-year Freedom of Information Act lawsuit enacted last September. The audits are currently the most recent financial reviews available but are poised to change as enrollment in these health plans has skyrocketed over the previous decade, with over 30 million individual plans with more expected to grow further.
Just last November, KHN estimated that the audits uncovered over $12 million in net overpayments, affecting the care of the 18,090 patients sampled. More than over 70 audits discovered net overpayments, topping $1,000 per patient on average in 23 audits. These overpayments occurred due to the CMS paying the plans too little on average, from $8 to $773 for each patient. This will result in many Medicare plans being overcharged by the government, plans such as Humana Inc, CIGNA, and many more.
With so much money at stake, many are wondering what these audits mean for their PALTC practices and how their patients will be affected. In this article, we’ll take a comprehensive look at the audits themselves, the losses they discovered, and how they will impact your practice.
Shall we begin?
Medicare Audits: How They Work
With the high number of Medicare plans and patients out there, conducting these 90 audits was no easy feat. These governmental audits sampled over 18,000 patients to discover a net overpayment of 12 million dollars. In addition to this shocking number, the losses to taxpayers are predicted to be much higher. To determine this figure, the Centers for Medicare and Medicaid (CMS) have announced that they intend to deduce the payment error rates from the samples across the membership of each individual plan.
But, even after over a decade, this has yet to happen, casting doubt on whether it will ever occur. Though the center initially planned to release a final extrapolation rule last November, it was pushed back to February of this year. To cause further concern, the former deputy director of CMS’ Center for Program Integrity, Ted Doolittle, claimed the agency has failed to hold specific plans accountable. Doolittle, now the health advocate for the state of Connecticut (our home state!), went on to say, “I think CMS fell down on the job on this,” claiming that the department was “carrying water.” for certain insurances.
With February inching closer and closer, many PALTC practices are wondering what the final tally will look like and what plans will be affected.
Medicare Audits to Affect Numerous Plans
As we said above, the KHN audits uncovered multiple losses in an assortment of Medicare Advantage health plans.
Auditors examined a broad sample of medical records to prove that the patients sampled had medical conditions treated under Medicare plans.
Above is a chart that covers the ten programs with the most overcharges.
It’s important to note that this chart is not all-inclusive and that some plans were undercharged for services provided while others were overcharged. To gather information for this chart, audit spreadsheets that the KHN released were analyzed to identify each health plan and how much they were overcharged or undercharged. But ever since 2018, the CMS has claimed that they would recoup a staggering estimate of $650 million in overpayments from the 90 audits conducted, meaning that the final concrete amount is still up in the air.
In fact, Spencer Perlman, an experienced analyst for Veda Partners in Bethesda, Maryland, has cast concern that the figure could be as high as $3 billion based on the data released by KHN. Perlman went on to disclose that he couldn’t picture the government forgoing an amount that high. This has caused many practices in the field to grow weary about the future and the status of different Medicare plans.
Impact on PALTC Practices
Now that we’ve discussed the audits and the Medicare plans that are bound to be affected, it’s time to dive into how these audits will change in the future and how they will affect your practice. As mentioned above, the CMS plans to release the final Risk Adjustment Data Validation (RADV) rule on February 1st. This will dictate how the CMS audits for coding errors in the future and how much has already been over or undercharged. Some theorize that some plans will utilize a fee-for-service (FFS) adjuster to ensure that audits are included, resulting in lower limit error rates for Medicare plans everywhere.
While waiting for February, many predict that the CMS’ new plans will consist of an annual auditing process. This has produced mixed reactions from the industry, as some believe this is unachievable, even though it would significantly improve the auditing process. Analysts such as Spencer Perlman believe that the intimidating size of the program will make annual audits “completely impractical.” But even with this pessimism, most support the idea of yearly audits, believing that it could greatly improve Medicare programs for long-term care patients nationwide.
Medicare Audits Wrapped-Up
Many predict the CMS to make tumultuous waves with their final ruling in February. But with the shocking projected amounts revealed in past audits, it’s more important now than ever for the CMS to calculate a reliable and concrete amount for each program. While this process will be extensive and drawn out, it will significantly benefit long-term care patients with appropriate rates and compensation.
Here’s to a new future. May it bring clarity to all. Though, a little reimbursement wouldn’t hurt either.
Source: KHN analysis of Centers for Medicare & Medicaid Services data