The Centers for Medicare & Medicaid Services (CMS) will expand its team of medical coders and increase the number of audits conducted against Medicare Advantage (MA) plans, the agency announced May 21.
All MA contracts will be audited to complete an unfinished backlog dating back to payment year 2018. The agency will increase its volume of audits per year to identify and collect federal overpayments.
“We are committed to crushing fraud, waste and abuse across all federal healthcare programs,” said CMS Administrator Mehmet Oz, M.D., in a news release. “While the administration values the work that [MA] 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.”
In response, the CMS said it is “deploying advanced systems” to better review medical records and flag suspicious diagnoses. The Department of Health and Human Services (HHS) Office of Inspector General will recover uncollected payments.
“By leveraging technology, CMS will be able to increase its audits from about 60 MA plans a year to all eligible MA plans each year in all newly initiated audits (approximately 550 MA plans),” the agency said. “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.”
The department will also bolster its team of 40 medical coders, growing it to 2,000 medical coders by Sept. 1. They will be tasked with verifying detections that are flagged.
The CMS has been less impacted than other HHS agencies, but Secretary Robert F. Kennedy Jr. has made clear his intention to bring staffing levels in-line with the pre-Biden administration. The CMS did not immediately respond to a request for comment asking how many workers are currently employed.
MA plans get risk-adjusted payments from the federal government for patient diagnoses. Claims are checked through Risk Adjustment Data Validation audits.
The agency said it is behind on completing audits and hasn’t “significantly” recovered overpayments since payment year 2007. The feds cited a report from the Medicare Payment Advisory Commission finding MA plans could be charging the CMS up to $43 billion per year more than they should.
"Today’s announcement is the right approach to enhance accountability and payment accuracy in Medicare Advantage, and we applaud Administrator Oz and CMS for taking this important step," said Better Medicare Alliance President and CEO Mary Beth Donahue. "Medicare Advantage already includes strong accountability mechanisms and consistently enforcing them will help the program work even better for seniors and taxpayers alike.”
Healthcare strategy firm Capstone said the announcement could spell trouble for the largest carriers, such as UnitedHealth Group, Humana, CVS Health and Elevance Health because clawbacks could be "quite large" during the time period CMS outlined.
In March, the CMS launched the Fraud War Room to find improper enrollment and false billing, among other violations in federal health programs. The agency said May 1 it had suspended $43 million in payments to 33 providers.
The Department of Justice (DOJ) is also criminally investigating UnitedHealth Group, focusing specifically on its MA business. UnitedHealth Group had already faced allegations of rampant upcoding from the DOJ.