Becker's Hospital Review

10 CFO / FINANCE CMS says it will recoup $1B in improper Medicare payments by 2020 By Morgan Haefner C MS said it is poised to claw back $1 billion from Medicare Advantage organizations by 2020 through widespread audits, ac- cording to a proposed rule. Here are five things to know: 1. The rule, which hit the federal reg- ister Nov. 1, concerns risk adjustment data validation audits for Medicare Advantage organizations. RADV audits occur after the final risk adjustment data submission deadline for each Medicare Advantage contract year. They confirm that Medicare Advantage organizations' self-reported risk adjust- ment data — or diagnosis codes used to depict how sick beneficiaries are — match medical record documentation. 2. Under the proposed rule, CMS wants to use extrapolation in RADV contract-level audits beginning with 2011 and subsequent audits. By doing so, CMS thinks it will recoup $1 billion in improper payments by 2020, and $381 million each subsequent year. 3. While CMS spent $150 million com- pleting RADV audits for the 2011-13 payment years, few recoveries have been sought by the agency. In fiscal year 2017, CMS found 8.31 percent of Medicare Advantage payments, or $14.4 billion worth, were erroneous. 4. For the RADV audits, CMS will sam- ple how Medicare Advantage organi- zations billed for some 200 enrollees for each contract and extrapolate that sample data to calculate an overall payment error for the plan. 5. "As we stated earlier, audits for payment years 2011, 2012, and 2013 have been conducted according to this methodology, but contract-level recoveries have not yet been sought," CMS said. "We are now providing ad- ditional notice and again welcoming public input on the agency's method- ology for calculating a contract-lev- el payment error in RADV audits, including the sample sizes used in these contract-level audits." n OIG: Paying physicians more to boost screenings doesn't violate kickback laws By Ayla Ellison A n insurer's plan to provide incentive payments to physicians in its net- work to boost preventive health screenings to Medicaid beneficiaries would not violate the federal Anti-Kickback Statute, according to an ad- visory opinion from HHS' Office of Inspector General. Under the proposed arrangement, the Medicaid managed care plan would pay network providers $1 per existing enrollee for increasing early and periodic screening, diagnostic, and treatment services by at least 10 percent year over year. Providers with a 20 percent increase in those services would receive a $2 boost per enrollee, and those with a 30 percent increase would receive $3 per enrollee. The proposed arrangement would not provide an incentive to providers to recruit new Medicaid beneficiaries because the incentive payment would be based only on the percentage change in the volume of EPSDT services pro- vided to existing enrollees. The insurer also noted that it would not shift the increased costs related to the increase in EPSDT services or the costs of the incentive to the Medicaid program. "Based on the facts certified in your request for an advisory opinion and sup- plemental submissions, we conclude that the Proposed Arrangement would not generate prohibited remuneration under the Anti-Kickback Statute," the OIG said in the advisory opinion. n Moody's top risks for providers, payers By Leo Vartorella T he unstable political climate and evolv- ing regulations are leaving many health- care leaders uncertain of the future. Moody's Healthcare Quarterly outlined the top risks facing hospitals and insurers: Hospitals Inpatient rates will increase but will be offset by quality factors and proposed outpatient changes. CMS Medicare inpatient payments rates for 2019 will increase by 3 percent, but hospital payments will also be affected by quality measures. ese will include penalties of up to 3 percent off diagnosis-related group rates in the case of excess readmissions. Medicaid is in flux as states seek to change their programs. CMS encourages states to take control of their own Medicaid programs, and some states are looking to expand their coverage, which would result in more insured patients and lower bad debt rates for hospitals. Other states have looked to introduce Medic- aid work requirements, which would lower the number of Medicaid recipients. Insurers ACA developments are generally credit-pos- itive. Rule changes allow states to adjust their essential health benefits, expand association health plans and offer short-term plans. ese changes allow insurers to price their plans more attractively, and while there is a chance these lower-cost options may draw people away from ACA exchanges, Moody's estimates the risk of this is low because most enrollees receive gov- ernment subsidies and have fewer incentives to leave their plans. Group capital enhancements could affect highly diversified insurers. Regulators are considering adopting a group capital standard to complement stand-alone-insurer risk-based capital standards. is would apply to the broader group of which the insurer is a part, including unregulated financial and nonfinan- cial entities, to better understand risks that would affect insurer's ability to fulfill their claims obliga- tions. is could adversely affect insurers housing a mix of entities that have consolidated debt levels above the average for insurance-only groups. n

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