As 2018 RADV Audits Get Underway, MA Overpayment Rule Gets Modest Makeover
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Jan 16, 2025
Using an extrapolation methodology that will allow the federal government to recoup billions of dollars in estimated overpayments to Medicare Advantage insurers, CMS this year intends to conduct Risk Adjustment Data Validation (RADV) audits of 60 MA organizations for payments issued in 2018. Per CMS’s final rule issued in 2023, that is the first year the agency will apply the extrapolation methodology, which is the subject of an ongoing lawsuit filed by Humana Inc. At the same time, CMS expects MA organizations to return overpayments for Part C services that they identify, albeit with a slightly different interpretation of what leads to that identification.
At the center of Humana’s argument in Humana Inc. et al v. Becerra et al (No. 4:23-cv-909-O), which was filed in the U.S. District Court for the Northern District of Texas in September 2023, is CMS’s choice not to apply a fee-for-service adjuster when estimating overpayment recoveries. The FFS adjuster was intended to account for any impact from unaudited diagnosis codes in FFS Medicare data that are used to calibrate the MA risk adjustment model. Although CMS in 2012 informed plans that it would use the FFS adjuster, it ultimately deemed it unnecessary without offering “any empirical or actuarial justification for its new audit methodology,” Humana argued.
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