Radar on Medicare Advantage

In a development that has some actuaries scratching their heads, the U.S. Attorney’s Office for the Eastern District of Pennsylvania on Sept. 3 unveiled a settlement with two Medicare Advantage plan subsidiaries of Independence Blue Cross (IBC) involving “inflated” MA plan bids. But the case did not have to do with allegations of exaggerated risk scores, which have been central to many recent MA false claims cases and attracted the attention of the Dept. of Justice (DOJ), and instead centers on standard bid miscalculations that might have been ignored — had it perhaps not been for the insurer’s complicated history with the whistleblower.

The two subsidiaries of the Philadelphia-based insurer — Keystone Health Plan East, Inc. (KHPE) and QCC Insurance Company, Inc. — will pay $2.25 million plus interest to resolve False Claims Act allegations of “incorrectly calculating anticipated plan costs, resulting in inflated Medicare Advantage plan bids” to CMS, according to the press release from the U.S. Attorney’s Office. The settlement resolves a lawsuit initially filed by IBC employee Eric Johnson, in which the federal government intervened. The case, United States ex rel. Eric Johnson v. Independence Blue Cross (No. 10-CV-1520), at press time remained under seal. Johnson’s share of the recovery is approximately $500,000.

Anthem Blue Cross and Blue Shield and Centene Corp.’s Managed Health Services (MHS) secured new four-year contracts to serve the Indiana state Medicaid program, Hoosier Care Connect. The new pacts, which start in April 2021, include the option for two one-year renewals, according to a press release from Centene. Anthem currently serves more than 500,000 Medicaid members across the state, while MHS serves more than 330,000 enrollees. View the releases at https://bwnews.pr/32hnW84 and https://prn.to/2YxNbSS.

After successful ballot initiatives in Missouri and Oklahoma, South Dakota voters may decide the fate of Medicaid expansion in that state. South Dakota Attorney General Jason Ravnsborg (R) posted explanations for two petitions that will circulate in an effort to gain enough signatures for a ballot initiative in 2022. One of the measures would create a constitutional amendment (similar to Oklahoma’s approach) and the other would direct the state legislature to expand Medicaid. Expansion advocates have until November 2021 to collect enough signatures. Visit https://bit.ly/2EXnd42.

Carrying out another directive from President Trump’s Medicare-focused executive order issued last fall (RMA 10/17/19, p. 3), CMS on Aug. 31 released a proposed rule that aims to fast-track Medicare coverage of certain innovative FDA therapies once they are approved. Although the rule applies to Medicare fee for service, it has implications for Medicare Advantage organizations that are required to cover Medicare Parts A and B approved services.

According to a CMS fact sheet on the rule, CMS is proposing a new Medicare coverage pathway, Medicare Coverage of Innovative Technology (MCIT), for medical devices that are granted breakthrough designation by the FDA. The MCIT proposal would allow for national Medicare coverage on the same day as a breakthrough device receives FDA approval. CMS proposes a coverage duration of four years, which it suggests will “encourage manufacturers to voluntarily develop evidence to show these treatments improve the health of Medicare patients.”

In its latest review of the Encounter Data System (EDS) that is used largely to determine Medicare Advantage plan payments, the HHS Office of Inspector General (OIG) urged CMS for the second time to incorporate National Provider Identifiers (NPIs) into its collection of data from MA organizations. Despite their potential to improve program integrity in certain fraud-prone areas, NPIs for ordering providers are still not required in encounter data submissions and continue to be “largely missing” from records submitted by MAOs, observed the new OIG report.

CMS in 2012 began collecting encounter data from MAOs and, with the goal of eventually replacing the legacy Risk Adjustment Payment System, in 2016 began using it to determine risk-adjusted payments to MAOs. But the agency has always maintained that it could be used for program integrity and research purposes and in 2018 began making MA encounter data available to researchers. Last year, the Medicare Payment Advisory Commission suggested that encounter data also be used to determine star quality ratings at a local level (RMA 3/21/19, p. 3).