GAO States CMS Overpaid Medicare Advantage Plans During the Years of 2010 to 1012–Flawed Risk Assessment Calculation Error
Posted Mar 07 2013 1:16pm
Here we go again with math and audits and to be fair this is very complex today and we go back to swapping spit again in a matter of words. There are so many stories as such that come out with audits. One might think that some of the coding here could be synchronized in transaction values but I guess not as I didn’t see a mention of any insurers telling CMS their calculations were wrong either, but payments were not disputed. Who is ever going to really get risk assessment correct enough to where it works through a complex system of aggregated data? In the financial world as I wrote below altering risk on purpose is a real issue with quantitative analytics used for sales and marketing. The video (Quants) at the left explains a little bit on how risk is sometimes calculated in the financial areas and basically is a good demonstration if you have never seen a formula explanation before.
It is interesting to read here how the managed care patients had a higher risk assessment coding and it says they should be the same as traditional Medicare, just talking risk here, but the managed care folks for some reason and error were rated as higher. The insurers already are campaigning for no cuts in 2014 as we see coming from CMS to the tune of 2.3 percent. Again CMS can’t negotiate drug prices directly and in the Medicare Advantage plans it relies on the insurance companies to do that. So in summary, is this a wash or are the over payments going to be pursued? It gets down to how much time and money one wants to spend I guess, but in the meantime the wheels keep turning with other complexities of healthcare. BD
WASHINGTON – A report issued this week by the Government Accountability Office reports that the Centers for Medicare & Medicaid Services overpaid the Medicare Advantage program run by private health insurers by between $3.2 billion and $5.1 billion for the years 2010-2012.
The overpayments, according to GAO, were the result of CMS inadequately adjusting based on health status for members enrolled in Medicare Advantage.
Insurers who run MA plans are paid a set amount per beneficiary, adjusted by a risk score that calculates the expected consumption of health services in the coming year for each beneficiary.
In practice, the risk scores for beneficiaries with the same health conditions and with the same demographic profile should be the same. However, the GAO discovered in its analysis that coding differences between Medicare Advantage enrollees and those enrolled in the traditional fee-for-service Medicare plan led to “inappropriately high MA risk scores and payments to MA plans.”