Thursday, January 7, 2016

CMSs New MA RAC Strategy: Can It Make a Silk Purse Out of This SOW Document?


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.

No comments:

Post a Comment