By James
Gutman - January 6, 2016
About a year before the end of a
presidential administration of either party, it seems, top regulatory officials
in that administration realize they’re almost out of time to implement
longstanding policy goals. So what follows is frequently an acceleration of
pace in pursuing items that may have been put on the back burner, since the
burner may not be lit at all much longer. Consider this when you ponder the
draft Statement of Work (SOW) CMS quietly issued in late December for the
Medicare Advantage (MA) Recovery Audit Contractor (RAC) program.
Yes, that is the same program required
to be created by the 2010 Affordable Care Act but not started yet. And, yes,
it’s a close relative of the controversial Medicare fee-for-service (FFS) RAC
program that has raised lots of money — for both the government and the RACs —
and lots of hackles during its years of existence. The RACs, of course, are
modern-day bounty hunters whose fees are a percentage of their recoveries. It
thus is in their interest to find overpayments, and apparently that hasn’t been
particularly difficult in Medicare FFS.
Getting a sense of how difficult this
is in MA — and thereby getting a feel for how much interest there may be in
serving as MA RACs — could be behind the somewhat unusual SOW (no pun intended)
that was CMS’s holiday offering last month. The 27-page draft was light on such
details as the implementation timetable and the percentage fees that would be
paid to the RACs. But it was heavy with interesting concepts such as auditing
each of the approximately 600 MA contracts every year with the aid of
techniques like “Condition Specific RADV Audits,” with the acronym standing for
Risk Adjustment Data Validation. This is the same acronym that caused the
financial community to quake in 2009 and 2010 when CMS began exploring the
concept of extrapolating the violations found in RADV audits to entire MA
contracts, thereby raising the prospect of penalties for MA sponsors in the
tens or hundreds of millions of dollars.
The draft SOW does not shed any new
light on the extrapolation issue other than saying the “Lead Analytic
Contractor” will develop the extrapolation methodology and CMS must approve it.
There still is no mention of what will be the FFS adjuster that the agency in
February 2012 pledged to develop as a way of taking into account the error rate
in FFS when it calculates the errors in MA risk adjustment. CMS does now have
an appeals process for RAC audit findings, something not in place when it first
discussed extrapolation, but the rules governing appeals still aren’t clear,
according to Tom Hutchinson, a strategic adviser at the Epstein, Becker &
Green health care law firm and the former head of CMS’s Plan Payment Group.
Hutchinson acknowledges that, as one
industry observer suggested, CMS perhaps could get the RAC audit processes
started this year if it adds the MA responsibility to an existing RAC FFS
contract, but says any significant recoveries — and thus payments to RACs —
would be further down the road.
What do you make of the new MA RAC
developments? Has CMS in effect concluded that it’s now or never to get this
program started, and, if so, how much of that is due to pressure from advisory
and good-government organizations as well as some members of Congress? What do
you think of the idea of condition-specific MA RADV audits conducted by RACs?
And is all this primarily intended to scare MA plans’ diagnosis coding straight
by raising for the insurers the specter of bounty hunters who otherwise will
bring the plans in “dead or alive”?
To request a free sample copy of Jim’s
newsletter, Medicare Advantage News, send an email to bjtaylor@aishealth.com.
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