Experts call for CMS to go further on RADV audits despite latest final rule

A new overhaul to Medicare Advantage (MA) risk adjustment audits will still leave billions on the table if the Biden administration doesn’t go further, a group of experts contend. 

Several experts wrote a new article in Health Affairs Monday that called for changes to the final rule that overhauled risk adjustment data validation (RADV) audits of MA plans. One of the key changes is for the Centers for Medicare & Medicaid Services (CMS) to speed up a cumbersome and lengthy appeals process. 

“CMS has taken a tentative but meaningful step forward,” according to the article. “It should be emboldened to do more to expand RADV audits and safeguard the fiscal sustainability of Medicare.”

Under a RADV audit, CMS takes a sample of an MA plan’s patient population and compares claims to a patient’s medical record to ensure the plan did not receive an overpayment. 

The final rule released in late January included several key changes to RADV audits, chief among them to extrapolate the results from the sample to apply to the entire plan. CMS will also apply extrapolation to audits completed from 2018 onward.

The agency shied away from a proposal to apply it to plans dating back to 2011. This decision will ensure that MA insurers can keep an estimated $2 billion in improper or overpayments they got from 2011 through 2017. 

The agency said in the proposed rule the reason in part was to help ensure the appeals process isn’t suddenly overburdened. But researchers claim there is another reason. 

“The agency’s half measure seems at least partially motivated by a desire to dissuade legal challenges, an effort that seems poised to fail,” according to the article, the authors of which included researchers and professors from Georgia State University’s law school and the Brown University School of Public Health.

To be sure, some insurers such as Humana have weighed legal action before the rule was published. A legal challenge, though, may focus on another part of the rule: the elimination of a fee-for-service adjuster that would factor in fee-for-service errors when calculating risk adjustment.

Insurers argued the adjuster is needed to ensure risk adjustment is equivalent between MA and traditional Medicare.

However, CMS said in the final rule that even if there is a systemic error rate in fee-for-service it doesn’t impact the requirement for plans to submit accurate diagnoses.

But while CMS dropped the adjuster, it also didn’t do more to strengthen documentation standards, the article said. The rule said that extrapolation won’t affect the existing process for an MA plan to submit medical record documents as part of the RADV audit. 

“Despite strenuous lobbying by insurance carriers, the final rule’s stance on the fee-for-service adjuster roughly preserves the status quo,” the article said. 


Streamlining RADV appeals
 

The authors said CMS could expand its efforts to get more MA overpayments by overhauling the appeals process for RADV audit amounts. 

“To effectively scale the RADV program, CMS must improve the unwieldy and protracted appeals process,” the article said.

CMS could request more funding from Congress to process and streamline the settlement of appeals. The agency has previously asked for $41 million for its RADV program for 2023. 

“Considering the billions of dollars the agency is leaving on the table, even doubling or tripling funding for the program would produce an excellent return on investment,” the authors said. 

CMS should also end the currently unlimited period for resolving a RADV appeal, calling for a time limit, according to the report.

CMS was not able to comment as of publication time on the additional reforms.

The final rule is the latest in the feud that has emerged over the past month between CMS and insurers. 

The agency also released a proposed advance notice Feb. 1 that estimated a 1% hike to MA and Part D plan payments for 2024. Insurers claim, though, that the proposed rule will actually result in a 2.27% cut to plan payments after factoring in changes to star ratings and risk adjustment, an assertion the Biden administration has pushed back against as “categorically false.”