Senator Charles Grassley (R-IA), the co-author of the Physician Payments Sunshine Act, sent letters last week to the Centers for Medicare and Medicaid Services (CMS) and the Department of Justice (DOJ) concerning alleged Medicare Advantage fraud.
Update: Senator Claire McCaskill, the top ranking Democrat on the Senate Special Commission on Aging, also sent a letter to CMS asking what steps the government is taking to combat alleged Medicare Advantage fraud and abuse.
Medicare Advantage plans are run through approved private insurance companies, and offer an alternative to traditional Medicare for seniors. CMS pays Aetna, Cigna, United HealthCare, etc., a fee per month, per patient, based on a formula known as a “risk score,” which attempts to reflect patient health. The government provides more funds to Medicare Advantage plans for patients with higher risk scores.
Recently, however, there has been a lot of scrutiny into how plans land on a given risk score. There have been reports that a number of whistleblower lawsuits have been cropping up against plans, alleging that they have been fraudulently inflating their risk scores. See Modern Healthcare’s breakdown of two recent whistleblower cases filed under the False Claims Act.
“With fraudulently inflated risk scores potentially costing taxpayers billions of dollars every year and resulting in less money in the Medicare Trust Funds for our seniors, this is an issue that must be investigated further,” McCaskill wrote regarding these suits.
The Center for Public Integrity has been spotlighting Medicare Advantage for a while now, and has even developed a tool to show how much more money plans get based on different diagnoses. For example, if a doctor documents that a patient is drug or alcohol dependent, the government pays the plan $2,400 extra for the added risk and associated anticipated expense.
A Public Integrity article entitled “Home is where the money is for Medicare Advantage plans,” states: “Health plans can profit because Medicare pays them higher rates for sicker patients using a billing formula known as a ‘risk score.’ So when a home visit unearths a medical condition, as it often does, health plans may be able to raise a person’s risk score and collect thousands of dollars in added Medicare revenue over a year — even if they don’t incur any added expenses caring for that person.” The article notes that “Medicare made nearly $70 billion in “improper” payments to Medicare Advantage plans from 2008 through 2013, mostly overbillings based on inflated risk scores, according to government estimates.”
In light of a number of these reports, Sen. Grassley penned a letter to DOJ and CMS asking about their approach to fighting Medicare Advantage fraud.
According to news reports, there is an increasing number of lawsuits against insurance companies for potential Medicare Advantage fraud. Some insurance companies that offer Medicare Advantage are allegedly engaging in billing abuse by altering patient records in order to claim patients are sicker than they actually are. Medicare Advantage uses risk scores to determine how much insurance companies are reimbursed with higher rates for sicker patients. News reports indicate that some insurance companies are wrongfully claiming sicker patients, leading to inflated risk scores and reimbursements. Reportedly, the Department of Justice (DOJ) is investigating this issue.
Senator Grassley requested that CMS provide answers to the following four questions:
- What steps has CMS taken, and is currently taking, to ensure that insurance companies are not fraudulently altering risk scores? Please provide a detailed explanation.
- Is CMS working in conjunction with DOJ to investigate risk score fraud? Please explain the relationship. If not, why not?
- Since the inception of Medicare Advantage, how many risk score audits has CMS conducted each year? For each year and each audit, what was the value of the overcharge? How much was recovered via settlement or other measures?
- How much money per year is allocated by CMS for auditing Medicare Advantage fraud, waste and abuse?
Senator Grassley also requested that the DOJ provide answers to the following three questions:
- What steps has DOJ taken, and is currently taking, to ensure that insurance companies are not fraudulently altering risk scores? Please provide a detailed explanation.
- Is DOJ working in conjunction with CMS to investigate risk score fraud? Please explain the relationship. If not, why not?
- In the past 5 years, how many Medicare Advantage risk score fraud investigations has DOJ conducted? Of the investigations, how many resulted in criminal and/or civil sanction?
Grassley’s office requested responses from CMS and DOJ by June 3, 2015.