BMA calls for yearly Medicare Advantage plan audits to improve program integrity

Federal regulators should audit all Medicare Advantage (MA) plans yearly to boost oversight of the program, which has come under criticism from Congress for overpayments, a key advocacy group said. 

The Better Medicare Alliance (BMA), which lobbies Congress on key MA issues, released a report outlining a series of recommendations for the MA program that was provided first to Fierce Healthcare. The recommendations also target social risk factors and how to improve marketing oversight.

MA has surged in popularity in recent years and is expected to outpace traditional Medicare in total enrollment in 2023.

“With these recommendations, we are offering new solutions to inform an even more transparent, accountable Medicare Advantage that continues to provide exceptional value for beneficiaries and taxpayers alike,” said BMA President and CEO Mary Beth Donahue in a statement. 

The group said that currently, the Centers for Medicare & Medicaid Services (CMS) already monitors MA alongside fee-for-service Medicare and 11 other programs deemed high risk for fraud. To find any overpayments, CMS conducts a risk adjustment data validation (RADV) audit of medical records across MA plans. 

The agency will get a subset of plans to audit and then explore a small, random sample of enrollees, the report said. But BMA reported that CMS does not share the criteria it uses to select the plans and that some “contracts are more exposed to more audit risk than others,” according to the report. Instead, CMS should perform a RADV audit for every MA plan annually to boost oversight and ensure some plans aren’t affected more than others, BMA said.  

In addition, changes made to the RADV audit methodology shouldn’t be applied to prior years. This is a reference to a previous CMS proposal to retroactively apply a new RADV methodology to audits conducted from 2011 through 2013. 

CMS should also keep the fee-for-service adjuster, which a 2018 proposed rule decided to not use. The adjuster has been in place since 2012 and is used to account for coding errors that could impact MA payments. 

CMS needs to require best practices on how to conduct in-home health risk assessments, which are used by plans to identify potential gaps in care and social determinants of health. The Department of Health and Human Services' Office of Inspector General has reported some plans are relying on HRAs and chart reviews to inflate diagnoses of MA patients to make them appear sicker. The goal is to inflate risk scores and get a higher bonus payment from Medicare. 

A 2021 report from the Kaiser Family Foundation showed that Medicare spending for MA enrollees was $321 higher per person in 2019 compared to traditional Medicare. This contributed to an estimated $7 billion surge in additional spending that year.

A report in Kaiser Health News found in a review of 90 government audits that MA plan issuers repeatedly tried to sidestep government requirements for medical documents needed for audits.  

Some progressive lawmakers have called on CMS to crack down on MA, although the program still enjoys widespread and deep bipartisan support overall. 

CMS Administrator Chiquita Brooks-LaSure said she wants to make sure Medicare dollars are being used well. The agency is expected to issue its rules and regulations for the 2024 coverage year in the coming weeks. 

BMA has pushed back on the criticisms by noting that MA has a high 94% satisfaction rate among seniors. It also pointed to a 2021 report it commissioned from the consulting firm Milliman that showed MA beneficiaries spend $123 a month less in out-of-pocket costs for Medicare services and get benefits not available under traditional Medicare. 

BMA’s recommendations report also noted that the MA overpayment rate of 4.93% is below the rate for traditional Medicare at 7.27%. 

Addressing social risk factors, marketing

In addition to the recommendations surrounding risk adjustment, the report also calls for enhanced regulation and oversight of marketing materials for MA plans as well as heightened oversight of third-party organizations. 

The recommendation comes after a probe from Sen. Ron Wyden, D-Oregon, into MA marketing. The senator issued a report earlier this year that found MA marketing complaints rose in nine states from 2020 through 2021. CMS also issued guidance in October that it will start preapproving all MA television spots starting next year.

BMA called for the creation of best practices for creating new supplemental benefits, a key difference that MA plans have over traditional Medicare. Nearly all plans offer supplemental benefits not available in traditional Medicare such as dental or vision, but plans in recent years have also started to craft benefits that address social determinants of health. 

BMA is recommending plans and policymakers work on coordinated supplemental benefits “rather than cash benefits to ensure beneficiaries are accessing services that will meet their health needs,” the report said. 

CMS has made closing health equity gaps a major priority across the agency and has previously explored adding equity measures to MA star ratings that help consumers choose between plans.