The Department of Health and Human Services (HHS) and the Centers for Medicare & Medicaid Services (CMS) recently announced two major policy efforts directed at Medicare Advantage (MA) plans. As MA plans have become a significant share of the healthcare insurance market, healthcare providers are left wondering what impacts these attempts at MA reform will have on providers.
First, CMS has announced a significant expansion of its auditing efforts for Medicare Advantage (MA) plans. Beginning in May 2025, CMS began to audit all eligible MA contracts for each payment year and invest additional resources to expedite the completion of audits for payment years 2018 through 2024. These audits primarily involve Risk Adjustment Data Validation (RADV) audits to confirm that diagnoses used for payment are supported by medical records. CMS reported that it is several years behind in completing these audits, but that recent estimates suggest that MA plans may have been overpaid by several billion dollars.
If CMS demands that MA plans return significant overpayments, the MA plans may seek to pass this cost along to providers. Namely, where an MA plan experiences an unexpected expense in the form of an overpayment demand, it will likely seek to decrease its costs elsewhere. This may lead to increased scrutiny of claims billed to MA plans, meaning more audits and overpayment demands aimed at healthcare providers.
Second, HHS and CMS recently secured a pledge from several MA plans to make changes aimed at streamlining and improving the MA prior authorization process. These changes include standardization of prior authorization applications, a reduction in the services subject to prior authorization, and ensuring medical professional review clinical denials. Prior authorizations have become a significant thorn in the side of healthcare providers and these changes will not be unwelcome. However, these changes may simply lead MA plans to perform more audits and deny payment after-the-fact during post-submission, post-treatment, or post-payment reviews.
MA audits can be a complex affair. Where a provider is out-of-network, the process is generally similar to the 5-level appeals process under original Medicare, but with some differences. Where the provider is in-network, the provider may be bound by a plethora of contractual agreements and policy provisions, including internal appeals procedures, independent review organizations, and arbitration. The provider may also have the opportunity to negotiate a settlement with the MA plan, something generally not available under original Medicare. Experienced healthcare counsel can provide valuable advice for navigating a Medicare Advantage audit and appeal.
For over 40 years, Wachler & Associates has represented healthcare providers and suppliers nationwide in a variety of health law matters, and our attorneys can assist providers and suppliers in understanding new developments in healthcare law and regulation. If you or your healthcare entity has any questions pertaining to Medicare Advantage audits or healthcare compliance, please contact an experienced healthcare attorney at 248-544-0888 or wapc@wachler.com.