Recently released findings from an HHS Office of Inspector General (OIG) audit of Humana Inc.’s Medicare Advantage risk adjustment data may put new pressure on CMS to start extrapolating the results of its contract-level Risk Adjustment Data Validation (RADV) audits. Using its own extrapolation methodology, OIG determined that Humana received nearly $200 million in net overpayments for a contract that served some 485,000 enrollees — a finding that is vigorously disputed by Humana and adds to the ongoing debate over the use of sampling to approximate a plan’s true payment error rate.
CMS for nearly two decades has been conducting contract-level RADV audits to verify the accuracy of payments made to MAOs and recover improper payments, but it has yet to finalize the use of an extrapolation methodology that insurers have argued will lead to inflated audit recoveries. The Trump administration in a November 2018 proposed rule (83 Fed. Reg. 54982, Nov. 1, 2018) said it planned to extrapolate audit results without the use of a “fee-for-service adjuster” (FFSA), then left that provision out of its late-term rulemaking blitz. The adjuster, included in a 2012 proposal, would have accounted for inaccurate diagnosis codes in FFS Medicare data used to calibrate the MA risk adjustment model.