Radar on Medicare Advantage

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.

As select insurers in recent weeks posted first-quarter 2021 earnings, the positive impact of lower-than-normal utilization, rising COVID-19 vaccination rates and increased Medicaid, Medicare and/or exchange enrollment was slightly tempered by post-pandemic unknowns, especially for those with a heavy Medicaid presence. Some examples of lingering questions include: What will utilization look like when it returns to normal? When will states’ Medicaid eligibility redetermination efforts resume? How will financially strapped states adjust Medicaid rates?

For Centene Corp., those uncertainties dominated the company’s first-quarter earnings conference call and were reflected in a conservative earnings outlook for full-year 2021. Centene on April 27 posted adjusted earnings per share (EPS) of $1.63, up from 86 cents per share in the first quarter of 2020, and revenue of $30 billion, compared with $26 billion a year ago. That 15% increase was due in part to the acquisition of WellCare, which was completed on Jan. 23, 2020, and the ongoing suspension of states’ eligibility redeterminations, which Centene does not expect to resume until at least Aug. 1. Revenue growth, however, was partly offset by an overall drop in exchange membership, state rate and risk-sharing actions, and the repeal of the health insurer fee (HIF) for 2021, explained Executive Vice President and Chief Financial Officer Jeff Schwaneke during an April 27 call to discuss quarterly earnings.

✦ First-quarter 2021 revenues for UnitedHealth Group increased 9% from the year-ago quarter to $70.2 billion, driven in part by growth in its UnitedHealthcare business, which recorded quarterly revenue of $55.1 billion, up from $51.1 billion a year ago. The insurer on April 15 said that growth was partly due to strong performance during the 2021 Medicare Annual Election Period and reported overall Medicare Advantage enrollment of 6.3 million, up from 5.7 million as of Dec. 31, 2020. UnitedHealth raised its full-year 2021 adjusted earnings outlook to $18.10 to $18.60 per share. Visit https://bit.ly/3x0T4av.

✦ Nearly half of Medicare Advantage organizations in a recent survey did not include National Provider Identifiers (NPIs) for ordering providers on at least some MA encounter records, observes a new report from the HHS Office of Inspector General (OIG). CMS does not currently require MAOs to submit the ordering NPI on encounter records for any high-risk services (e.g., durable medical equipment, home health services), although it has previously said it would look into implementing such a requirement. In an online survey conducted by OIG, 81 out of 179 MAO respondents said they lacked ordering NPIs on more than 10% of their encounter records; 36 MAOs in that group stated that this limits their data analyses for program integrity, according to the report. OIG asked that CMS encourage MAOs to conduct oversight activities using ordering NPIs to safeguard the MA program from fraud and abuse; CMS neither concurred nor disagreed. Visit https://bit.ly/2RobaTw.