Radar on Medicare Advantage

Due to the unique constraints of the COVID-19 pandemic, CMS in the newly released 2020 audit report revealed that it audited only six plan sponsors, representing just 1.4% of all Medicare Parts C and D enrollment. Given the small sample size and the flexibilities that CMS granted plan sponsors during the public health emergency (PHE), the latest annual report does not provide many useful takeaways. However, increasing fines related to so-called “one-third financial audits” — which are separate from program audits — do offer some lessons learned for Medicare Advantage organizations, says one industry expert.

In the 2020 Part C and Part D Program Audit and Enforcement Report issued May 14, CMS reminded readers that it adjusted its 2020 audit strategy due to the PHE and cautioned “against drawing conclusions about the overall performance of audited sponsors in 2020 compared to those that were audited in previous years.” CMS last March put scheduled program audits on hold so that the agency and plan sponsors could focus more directly on the pandemic, but it picked them back up again in the fall.

✦ Oklahoma lawmakers at press time were attempting to replace Republican Gov. Kevin Stitt’s plan to transition fee-for-service Medicaid beneficiaries to a managed care model later this year, which will include the expanded adult group enrolling next month. Senate Bill 131 would require the Oklahoma Health Care Authority (OHCA) to develop a program that “controls costs and improves health outcomes for Medicaid beneficiaries” as an alternative to the managed care system that will address the voter-approved Medicaid expansion. The bill passed the House late last month and has returned to the Senate for final consideration, although it is likely to be vetoed by the governor, according to news reports. In a statement posted to the governor’s website, Stitt chided House Republicans for their “disappointing” vote and said he would “continue to advocate for this needed change.” Oklahoma will begin enrolling newly eligible adults into the SoonerCare program on June 1 for coverage effective July 1. On Oct. 1, OHCA will transition nonexempt beneficiaries to the SoonerSelect managed care model, which will be served by four MCOs (RMA 2/4/21, p. 8). View https://bit.ly/3vHuutT.

✦ Humana Inc. plans to fully acquire home health provider Kindred at Home from private equity firm Welsh, Carson, Anderson & Stowe (WCAS) and TPG Capital, the insurer said on April 27. (WCAS owns a controlling stake in MMIT, AIS Health’s parent company.) The insurer also reported strong financial results, with first-quarter adjusted earnings per share of $7.67 beating Wall Street’s consensus estimate of $7.07, or $1.04 billion in pretax income. Visit https://humana.gcs-web.com.

Recently released findings from an HHS Office of Inspector General (OIG) audit of Humana Inc.’s Medicare Advantage risk adjustment data may put new pressure on CMS to start extrapolating the results of its contract-level Risk Adjustment Data Validation (RADV) audits. Using its own extrapolation methodology, OIG determined that Humana received nearly $200 million in net overpayments for a contract that served some 485,000 enrollees — a finding that is vigorously disputed by Humana and adds to the ongoing debate over the use of sampling to approximate a plan’s true payment error rate.

CMS for nearly two decades has been conducting contract-level RADV audits to verify the accuracy of payments made to MAOs and recover improper payments, but it has yet to finalize the use of an extrapolation methodology that insurers have argued will lead to inflated audit recoveries. The Trump administration in a November 2018 proposed rule (83 Fed. Reg. 54982, Nov. 1, 2018) said it planned to extrapolate audit results without the use of a “fee-for-service adjuster” (FFSA), then left that provision out of its late-term rulemaking blitz. The adjuster, included in a 2012 proposal, would have accounted for inaccurate diagnosis codes in FFS Medicare data used to calibrate the MA risk adjustment model.

An earlier version of this story incorrectly stated that SCAN Health Plan’s VillageHealth Medicare Advantage Special Needs Plan is not affiliated with DaVita. The VillageHealth product is actually in partnership with DaVita.

As newly eligible patients with end-stage renal disease (ESRD) enter the Medicare Advantage market, insurers are partnering with kidney care providers to strengthen their kidney disease management capabilities across the spectrum of disease stages. Their efforts range from slowing disease progression to exploring appropriate care options for those with ESRD outside of dialysis.