Recent reports by the Office of the Inspector General (OIG) have sounded the alarm on billions of potentially improper payments to Medicare Advantage organizations (MAOs) primarily due to unsubstantiated or non-compliant diagnoses. The Centers for Medicare & Medicaid Services (CMS) estimates that such practices could account for nearly 10 percent of payments made to these organizations. This comes at a time when Medicare is facing growing solvency and affordability challenges, as the number of enrollees, and spending, continues to rise.
These factors combined have prompted a major crack down on inaccurate or fraudulent risk-adjustment scores. In addition to CMS increasing the number of RADV audits it performs each year, OIG has begun its own targeted audits aimed at diagnoses that fail to comply with federal regulations. Preparing for and undergoing an audit is an enormous task with significant consequences. Health plans may see a reduction in monthly CMS payments up to 3X the government’s damages caused by the violator, and a civil monetary penalty from $5,500 to $11,000 for each false claim. Lawsuits and negative media attention can also damage an organization’s reputation and brand and hurt their ability to attract and retain members.
With this increased level of scrutiny, using analytics for the proactive review of and oversight into coding and submission processes has become more critical than ever. But instead of only looking for undercoding or gaps, health care organizations need to look for overcoding as well. In this landscape, even plans that did not think they were on the radar for RADV may now be at risk—and all plans should prepare for some kind of audit each year.
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