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MA RADV Final Rule on overpayments made to MAOs

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Know about the MA RADV Final Rule on overpayments made to MAOs

As required by law, Centers for Medicare and Medical Services (CMS’) payments to Medicare Advantage Organizations (MAOs) are adjusted based on the health status of enrollees, as determined through medical diagnoses reported by MAOs, CMS said in a press release.

The US Department of Health and Human Services (HHS), through the Centers for Medicare & Medicaid Services (CMS), has finalized the policies for the Medicare Advantage (MA) Risk Adjustment Data Validation (RADV) program, which is CMS’s primary audit and oversight tool of MA program payments.

Under MA RADV final rule, CMS identifies inaccurate risk adjustment payments made to Medicare Advantage Organizations (MAOs) in instances where medical diagnoses submitted for payment were not supported in the beneficiary’s medical record. 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’s oversight of the Traditional Medicare and MA programs, CMS said.

Studies and audits done separately by CMS and the HHS Office of Inspector General (OIG) have shown that Medicare Advantage enrollees’ medical records do not always support the diagnoses reported by MAOs, which leads to billions of dollars in overpayments to plans and increased costs to the Medicare program as well as taxpayers.

However, no risk adjustment overpayments have been collected from MAOs since Payment Year (PY) 2007, the press mentioned.

“CMS is committed to protecting people with Medicare and being a responsible steward of taxpayer dollars.” By establishing our approach to RADV audits through this regulation, we 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,” CMS administrator Chiquita Brooks-LaSure, said in the press.

Through RADV audits, a sample of beneficiary medical records is provided by MAOs, and CMS reviews those records to verify that diagnoses reported for risk-adjusted payments are accurate and supported in the medical record. Risk adjustment discrepancies can be aggregated to determine an overall level of payment error, which can then be extrapolated. 

The HHS-OIG also undertakes audits of MAOs, similar to RADV audits, as part of its oversight functions. CMS can collect the improper payments identified during those HHS-OIG audits, including the extrapolated amounts calculated by the HHS-OIG, the release mentioned.

What are the MA RADV final rule policies?

Under the finalized rule, CMS will only collect the non-extrapolated overpayments identified in the CMS RADV and OIG audits between PY 2011-PY 2017. Extrapolation will begin with the PY 2018 RADV audit through statistical modeling and/or data analytics centered on high-risk MAOs.

The rule also finalizes a proposed policy that CMS will not apply an adjustment factor (known as an FFS Adjuster) in RADV audits. 

As risk-adjusted payments are based on Hierarchical Condition Categories (HCCs), submitted by the MAOs, they must be supported in the Medicare enrollees’ medical records to ensure correct payment.

The Risk Adjustment Data Validation final rule holds insurers accountable, CMS said in the press.

RAAPID is offering Natural Language Processing HCC Capture (Chart review) and HCC Compass (Chart audit) solutions to enhance the efficiency of the HCC coder’s performance and ensure claiming of accurate value-based reimbursements.

Are you looking for an NLP-powered ICD-10-CM coding review and audit solution? Get started to ensure accurate HCC coding documentation in your risk adjustment space.

Click to know about the Centers for Medicare & Medicaid Services Risk Adjustment Data Validation (RADV) Medical Record Checklist and Guidance.


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Disclaimer: All the information, views, and opinions expressed in this blog are inspired by Healthcare IT industry trends, guidelines, and their respective web sources and are aligned with the technology innovation, products, and solutions that RAAPID offers to the Risk adjustment market space in the US.