CMS Seeking to Claw Back Improper Medicare Advantage Payments

WASHINGTON — The federal government will begin auditing Medicare Advantage insurers under a new rule finalized Monday, the heightened scrutiny expected to return as much as $4.7 billion to Medicare’s trust fund over the next 10 years.

Watchdog groups had long complained about questionable charges to the government’s private version of the Medicare program, pushing for tougher penalties for deliberate overcharges.

The policy that went into effect this week appears to largely respond to those complaints.

Insurers had been hoping for a bit more leniency for diagnostic and other simple human errors.

“The commonsense policies finalized in the RADV final rule (CMS-4185-F) will help CMS ensure that people with Medicare are able to access the benefits and services they need, including in Medicare Advantage, while responsibly protecting the fiscal sustainability of Medicare and aligning CMS’ oversight of the Traditional Medicare and MA programs,” according to a press release on the Centers for Medicare & Medicaid Services website.

As required by law, CMS’ payments to Medicare Advantage organizations are adjusted based on the health status of enrollees, as determined through medical diagnoses reported by MAOs. 

Studies and audits done separately by CMS and the Department of Health and Human Services Office of Inspector General have shown that Medicare Advantage enrollees’ medical records do not always support the diagnoses reported by Medicare Advantage organizations, the press release said.

This leads to billions of dollars in overpayments to plans and increased costs to the Medicare program as well as taxpayers, the agencies said.

“Protecting Medicare is one of my highest responsibilities as secretary, and this commonsense rule is a critical accountability measure that strengthens the Medicare Advantage program,” said HHS Secretary Xavier Becerra in a written statement.

“CMS has a responsibility to recover overpayments across all of its programs, and improper payments made to Medicare Advantage plans are no exception,” he continued. “For years, federal watchdogs and outside experts have identified the Medicare Advantage program as one of the top management and performance challenges facing HHS, and today we are taking long overdue steps to conduct audits and recoup funds. 

“These steps will make Medicare and the Medicare Advantage program stronger,” he added.

CMS Administrator Chiquita Brooks-LaSure said that in establishing a new approach to audits through this regulation, the agencies are protecting access to Medicare both now and for future generations. 

“We have considered significant stakeholder feedback and developed a balanced approach to ensure appropriate oversight of the Medicare Advantage program that aligns with our oversight of traditional Medicare,” Brooks-LaSure said in a statement.

Dan can be reached at [email protected] and @DanMcCue