The Government Accountability Office says CMS overpaid private Medicare Advantage plans by at least $3.2 billion from 2010 through 2012, according to its new report.
CMS pays MA plans a predetermined amount per beneficiary, and that amount is adjusted for the enrollee's health status. To make that adjustment, CMS calculates a risk score, which is a relative measure of the expected healthcare required for that beneficiary.
Private MA plans are an alternative to fee-for-service reimbursement, and the GAO says that differences in diagnostic coding previously resulted in inappropriately high MA risk scores and MA plan payments. CMS adjusted for those differences in 2010.
But in January 2012, the GAO reported that CMS' risk score adjustments did not sufficiently correct the coding differences, and overpayments to MA plans persisted. In this latest report, the GAO analyzed data for MA plans in 2010, 2011 and 2012.
The GAO updated its analysis from the January 2012 report, estimating that cumulative MA risk scores in 2010 were 4.2 percent higher than they likely would have been if the same beneficiaries had been enrolled continuously in Medicare fee-for-service. CMS' risk score adjustment was too low, the GAO says, and this resulted in overpayments of at least $3.2 billion to MA plans.
The GAO urged CMS to use more information, such as additional beneficiary characteristics, when establishing risk-score adjustments. The report comes on the heels of another recent study on MA health plans and private insurers. A study in the International Journal of Health Services found private MA insurers have been overpaid $282.6 billion since 1985.
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CMS pays MA plans a predetermined amount per beneficiary, and that amount is adjusted for the enrollee's health status. To make that adjustment, CMS calculates a risk score, which is a relative measure of the expected healthcare required for that beneficiary.
Private MA plans are an alternative to fee-for-service reimbursement, and the GAO says that differences in diagnostic coding previously resulted in inappropriately high MA risk scores and MA plan payments. CMS adjusted for those differences in 2010.
But in January 2012, the GAO reported that CMS' risk score adjustments did not sufficiently correct the coding differences, and overpayments to MA plans persisted. In this latest report, the GAO analyzed data for MA plans in 2010, 2011 and 2012.
The GAO updated its analysis from the January 2012 report, estimating that cumulative MA risk scores in 2010 were 4.2 percent higher than they likely would have been if the same beneficiaries had been enrolled continuously in Medicare fee-for-service. CMS' risk score adjustment was too low, the GAO says, and this resulted in overpayments of at least $3.2 billion to MA plans.
The GAO urged CMS to use more information, such as additional beneficiary characteristics, when establishing risk-score adjustments. The report comes on the heels of another recent study on MA health plans and private insurers. A study in the International Journal of Health Services found private MA insurers have been overpaid $282.6 billion since 1985.
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