A CMS proposal to change Medicare Advantage risk adjustment data validation audits would be disruptive and could affect premiums and benefits for beneficiaries, industry stakeholders say.
The agency has fielded criticism for retroactive rulemaking and for failing to account for errors in fee-for-service Medicare data.1
The Medicare Advantage Risk Adjustment Data Validation is used as a corrective action to reduce the Part C improper payment rate. The rule, issued in 2018, proposed that:2
- CMS would use extrapolation in RADV contract-level audits and that the extrapolation authority would apply to the payment year 2011 contract-level audits and all subsequent audits
- CMS would not apply a fee-for-service (FFS) adjuster to audit findings.
Rule may mean fewer benefits, MA plans
The proposed rule would apply RADV without requiring adjustment from CMS for discrepancies found in MA plan documentation to reflect the rate of errors in FFS data from Medicare providers. AHIP notes that CMS has found significant errors in FFS data, and in 2012 it agreed that an “FFS adjuster” was needed.3
The Better Medicare Alliance and Avalere point out that without the FFS adjuster, plans’ recoveries could differ greatly from the amounts they expected.4 As a result, “MA plans may either project decreased revenue or increase their bids (adding a ‘risk premium’),” the group says. “These potential changes in plan bidding behavior could reduce funding available to lower enrollee out-of-pocket costs or premiums or to provide supplemental benefits.”
The rule also “undermines confidence in CMS’ willingness to be a fair partner with the private sector,” AHIP says. BMA and Avalere agree that plans may be hesitant to participate in the MA program knowing that CMS may make retroactive changes to rules. “As a result, if the rule is finalized as proposed, some beneficiaries could face higher costs, fewer MA plan choices, or reduced supplemental benefits under the MA program.”
Industry urges withdrawal of rule
To address these concerns, AHIP is urging CMS to:
- withdraw the proposed rule
- close out prior audits
- develop an appropriate FFS adjuster with input from health plans
- apply any changes to the RADV audit methods prospectively so MA plans can incorporate them into bids.
Additionally, “the contract-level RADV audit process must be completed more swiftly, and notifications and appeals processes should occur in a more timely manner,” said AHIP.
The group also urged CMS to “exercise significant caution” when considering changes to the MA program, as its enrollment numbers and other metrics show the program is working well. Stability for enrollees should be a high priority for the agency, and changes should “be supported by clear evidence justifying a change.”
CMS must either release the final RADV rule by November or request an extension, and the final rule is expected to shed light on how the agency will address stakeholder concerns about applying FFS audit methodologies to MA.
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- Lagasse, J. Insurers criticize risk adjustment overhauls for MA plans. Healthcare Finance. Sept. 6, 2022. https://www.healthcarefinancenews.com/news/insurers-criticize-risk-adjustment-overhauls-ma-plans
- Medicare and Medicaid Programs; Policy and Technical Changes to the Medicare Advantage, Medicare Prescription Drug Benefit, Program of All-Inclusive Care for the Elderly (PACE), Medicaid Fee-for-Service, and Medicaid Managed Care Programs for Years 2020 and 2021. Federal Register. Nov. 1, 2018. https://www.federalregister.gov/documents/2018/11/01/2018-23599/medicare-and-medicaid-programs-policy-and-technical-changes-to-the-medicare-advantage-medicare
- Request for Information on Medicare (CMS-4203-NC). AHIP. Aug 31, 2022. https://www.ahip.org/documents/AHIP-MA-RFI-Comments-8.31.2022.pdf Overview and Implications of CMS’s
- Proposed Changes to MA RADV. Avalere. Aug. 23, 2022. https://bettermedicarealliance.org/publication/avalere-insight-overview-and-implications-of-cmss-proposed-changes-to-ma-radv/