MA plans to CMS: Controversial audit rule could wreck popular program if finalized

The Biden administration needs to back off a massive overhaul to risk adjustment audits for Medicare Advantage (MA) plans, according to insurers that say the proposal unfairly targets prior audits dating back a decade. 

Insurer advocacy groups and providers submitted comments to a request for information on how to improve the MA program. Insurers turned their ire on changes to Risk Adjustment Data Validation (RADV) audits, while providers sought to alleviate prior authorization burdens. 

“The RADV proposal undermines confidence in CMS’ willingness to be a fair partner with the private sector,” insurance industry group AHIP wrote in comments (PDF), which were due Wednesday. “It injects uncertainty and risk into the system.”

The Centers for Medicare & Medicaid Services (CMS) proposed a rule in 2018 that changed how RADV audits are conducted. Plans are audited to ensure the diagnosis data match what was submitted by the plan, and any discrepancy could result in the plan repaying Medicare. 

Currently, CMS examines a sample of enrollees and extrapolates from the results to the entire plan. The agency, however, includes a “fee-for-service adjuster” that sets a permissible level of payment errors based on a similar rate in fee-for-service. This adjuster limits the amount that CMS can recoup for overpayments, according to consulting firm Avalere.

However, the 2018 rule would get rid of this “fee-for-service” adjuster, arguing that errors in fee-for-service claims data don’t necessarily have any systemic effect on MA payments, Avalere added.

CMS has so far declined to finalize the rule but has said it aims to release a final RADV audit rule later this fall. AHIP and other groups said that any final rule needs to stay as far away from the 2018 proposal as possible. 

“Stakeholders have raised significant concerns that the rule as proposed has potential to create disruption for plans and providers, which may, in turn, affect premiums and benefits for beneficiaries,” said the MA advocacy group Better Medicare Alliance in comments

AHIP was also concerned that the rule would apply retroactively to “hundreds of RADV audits, some that date back to plan year 2011 and have data more than a decade old,” it said. “Retroactive rulemaking is unfair, inappropriate and legally impermissible.”

Tackling coding concerns

The MA program has received scrutiny from lawmakers and critics in recent months over the impact of coding practices on government spending. 

An analysis from the Medicare Payment Advisory Commission, for example, charges that plans have relied on chart reviews and health risk assessments to increase diagnosis codes to inflate risk scores and get higher quality bonuses.

AHIP said it is wrong to compare the appropriateness of MA coding to traditional Medicare because “the MA payment system promotes more accurate coding to support coordinated and integrated care. While diagnosis codes submitted by MA plans for their enrollees’ medical conditions are used by CMS to determine enrollee risk scores, and comprehensive coding of enrollee health conditions is important for quality of care in MA, coding is often considered less important by providers in the original Medicare program.”

Fixing prior authorization

An area that had some agreement between payers and providers is to improve on prior authorization in a way that eases physician burden. 

“Requiring electronic prior authorization will simplify the process and reduce patient and provider burden,” the Better Medicare Alliance wrote. “Moreover, increasing transparency around prior authorization processes can help policymakers and stakeholders better understand the process.”

The Medical Group Management Association (MGMA) also wrote in comments that CMS needs to expand a previous rule that required electronic prior authorization for some plans but not for MA. 

“By limiting the application of the previous rule to a small subset of health plans, MGMA believed it would do little to alleviate prior authorization burden,” the group’s comments said. “Preferably, the rule should cover MA plans and modify the original timeframe for which plans must respond.”

CMS had proposed health plans must respond to groups within 72 hours of making an urgent prior authorization request and seven days for a standard request. 

Both of those time frames are “entirely too long,” MGMA said.