OIG Audits Add to Debate Over Extrapolation in Recovering MA Overpayments

As the Medicare Advantage industry draws attention for millions of net overpayments identified in a recent Kaiser Health News report on audits conducted by CMS, the HHS Office of Inspector General in two new reports seeks to recover estimated MA overpayments for inaccurate diagnosis codes. Separate from the contract-level Risk Adjustment Data Validation (RADV) audits used by CMS to verify the accuracy of MA organizations’ risk adjusted payments, the OIG audits may further support the notion that MA plans are overpaid. They also exemplify insurers’ fierce opposition to the use of sampling to approximate a plan’s true payment error rate.

In two reports released last month by the OIG’s Office of Audit Services, auditors found that most of the selected high-risk diagnosis codes submitted by the two MA sponsors did not comply with federal requirements. The reports determined that, based a sample of enrollee records, the government overpaid Blue Cross & Blue Shield of Rhode Island (BCBSRI) and California Physicians’ Service, Inc. (CPS) by roughly $4.9 million and $2 million, respectively, and recommended that they return the estimated overpayments. Additionally, OIG advised that the insurers should identify similar instances of noncompliance and submit associated overpayments, and that they should examine and improve their respective compliance procedures.

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Lauren Flynn Kelly

Lauren Flynn Kelly Managing Editor, Radar on Medicare Advantage

Lauren has been covering health business issues since the early 2000s and specializes in in-depth reporting on Medicare Advantage, managed Medicaid and Medicare Part D. She also possesses a deep understanding of the complex world of pharmacy benefit management, having written AIS Health’s Radar on Drug Benefits from 2004 to 2005 and again from 2011 to 2016. In addition to her role as managing editor of Radar on Medicare Advantage, she oversees AIS Health’s publications and manages the health editorial staff. She graduated from Vassar College with a B.A. in English.

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