Radar on Medicare Advantage

Notably missing from the Trump administration’s late-term rulemaking blitz was a longstanding proposal regarding Risk Adjustment Data Validation (RADV) audits, but industry observers say it will likely be revisited by the Biden administration.

CMS has for the last decade been conducting contract-level RADV audits to verify the accuracy of payments made to MA organizations and recover improper payments, and in 2012 said it planned to adopt a “fee-for-service adjuster” to account for any impact from inaccurate diagnosis codes in FFS data that are used to calibrate the MA risk adjustment model. But the agency in a November 2018 proposed rule (83 Fed. Reg. 54982, Nov. 1, 2018) said its plans to recoup improper payments starting with payment year 2020 would not involve an FFS adjuster and that it may apply this extrapolation methodology when finalizing audits dating back to payment year 2011 (RMA 11/1/18, p. 1).

The Trump years were noticeably light on Medicare Parts C and D program enforcement — and 2020 in general was a departure from normal operations — but as CMS resumes program audits and other oversight activities this year, Medicare compliance experts are advising plans to review key business functions. At the same time, industry observers say plans can expect increased enforcement and more aggressive use of civil monetary penalties (CMPs) in Parts C and D under the new Biden administration.

CMS last March suspended scheduled program audits of Medicare Advantage organizations, Part D sponsors, Medicare-Medicaid Plans and Programs of All-Inclusive Care for the Elderly to shift its oversight focus more directly on assuring the delivery of care during the COVID-19 pandemic (RMA 4/2/20, p. 1). The agency in July restarted program audits on a condensed basis and in a Dec. 23, 2020, memo said it expects to “conduct routine audit activities” for Parts C and D sponsors in 2021, sending audit engagement letters to selected organizations no earlier than mid-March and continuing to send them on a rolling basis through September.

In a series of steps that were largely expected, the Biden administration in its early days moved to revisit policies approved by the prior administration that it views as weakening Medicaid and Affordable Care Act (ACA) coverage. At the same time, the administration delayed the implementation of an HHS final rule to eliminate rebates in Medicare Part D, giving it more time to consider the rule’s full impact and potentially amend or rescind it after a comment period.

“When it comes to health policy, the Biden administration is taking a really hard look at policies in the Medicaid and Medicare space that they view [as] significant and that they want to make sure are in line with their view…[including] looking at the larger rules that impact a space like the rebate rule,” observes Stephanie Kennan, a member of McGuireWoods Consulting’s federal public affairs group and former senior health policy adviser to Sen. Ron Wyden (D-Ore.).

✦ Anthem, Inc. stands to acquire more than 267,000 Medicare Advantage members and over 305,000 Medicaid members in Puerto Rico through the planned purchase of MMM Healthcare, LLC from InnovaCare Health. The deal, unveiled Feb. 2, will expand Anthem’s presence in the duals market. Financial terms of the transaction were not disclosed. The acquisition is expected to close by the second quarter of 2021, subject to regulatory approvals and other closing conditions. Visit https://bit.ly/2LgUfzL.

✦ A bipartisan bill reintroduced in the Senate seeks to require CMS to consider diagnoses from audio-only telehealth visits for risk adjustment payments to Medicare Advantage plans. Trade associations America’s Physician Groups and America’s Health Insurance Plans applauded the bill, which would improve MA enrollees’ access to telehealth and ensure that such visits are reimbursed as if they were in-person visits during the COVID-19 public health emergency. The bill is sponsored by Sens. Catherine Cortez Masto (D-Nev.) and Tim Scott (R-S.C.) and was first introduced in July 2020. Visit https://bit.ly/2Ms8gej.

✦ UnitedHealth Group’s fourth-quarter 2020 adjusted earnings per share (EPS) fell 35% from the prior year to $2.52, as “care patterns normalized, while COVID-19 costs rose, and further rebates were recognized,” according to a Jan. 20 press release. Revenues for full-year 2020 increased 6.2% from the prior year to $257.1 billion, reflecting growth across the firm’s businesses, including UnitedHealthcare’s Medicare & Retirement segment, which grew revenues by 7.5% to nearly $22.2 billion. The insurer’s full-year medical loss ratio was 79.1%, down from 82.5% in 2019, largely stemming from the return of the Affordable Care Act health insurer fee and disrupted care patterns earlier in the year, but offset by COVID-19 assistance measures and testing and treatment costs, explained UnitedHealth. The company affirmed its 2021 full-year earnings outlook, including $17.75 to $18.25 adjusted EPS. Visit https://bit.ly/360Ff06.

✦ The Pharmaceutical Care Management Association (PCMA) on Jan. 12 filed a lawsuit challenging the HHS rebate rule that was finalized in late November. The lawsuit, filed in the U.S. District Court for the District of Columbia, argued that HHS’s “herky-jerky, last-minute rulemaking process” violated the Administrative Procedure Act and should be invalidated. PCMA, the lobbying trade group for pharmacy benefit managers, asked the court to declare that federal law protects rebates issued to Medicare Part D sponsors under safe harbor regulations. View the suit at https://bit.ly/2KtlNl2.