OIG audits of Medicare Advantage reveal four eye-opening stats

Part 2 of an ongoing series

Before I delve into part 2 of this ongoing series on my review of Medicare Advantage audits, I want to say thank you for all of the support, and for the warm reception of part 1 of this ongoing series. Please continue to like, comment, or share. The dialogue that has been started has been great. Continue with the questions as we all learn together. I know I have learned a lot from the engagement.

Following are four key stats I have identified after reading the long list of 2022 and 2023 OIG reports of Medicare Advantage chart reviews.

Background: Since January 1, 2022 the OIG has released 17 reports on their findings from their reviews of Medicare Advantage beneficiaries. These reports consist of their findings from either randomly selected patient audits or from a targeted audit focused on high-risk diagnoses.

Currently, for audits prior to 2018 dates of service, the OIG is not allowed to extrapolate their findings to the broader population. However, the recently released CMS rule in Q1 will allow extrapolation, but I would expect significant litigation and pushback once it begins to occur, especially on extrapolation methodology.

That said, here are 4 key findings from reading the results reports:

1) Every single plan had findings that will ultimately force the MA plan to pay a recoupment. I personally expected this to occur. In part one of my series I showed the overall error rate was 71% for the cases reviewed. Like many organizations, the OIG leverages analytics and probabilities to heighten its chances of identifying opportunity. The good news is the OIG openly shares these target areas, and organizations themselves can use these findings in their retrospective and concurrent reviews to improve preparedness and risk score accuracy.

2) $690k: This has been the average penalty each MA plan has had to pay. To quantify this, each review averaged 253 patients. You can see this is a really small sample size. The impact per patient reviewed has been $1,984. Orwell fans may chuckle at that number.

3) $9.1M: If the above targeted review was extrapolated, the average annual impact for each plan was over nine million dollars. This would be a direct bottom line impact.

4) 0.28%: This is the average amount of total plan revenue that would be recouped, assuming extrapolation. This means for every $1,000 of revenue for a plan, $2.80 would be recouped. That $2.80 feels small, but when looking at billions of dollars of revenue those numbers jump significantly.

One additional, incredibly important item I need to share: In the targeted reviews the auditors are not looking for additional, missed but present, conditions. This is different from the randomly performed audits wherein every report shows conditions the organization could have captured, but didn’t.

So what can you as a provider, organization, or payer do with this data? Here’s a three-part strategy to get you started:

  1. Start by knowing your data. You should have it; if not find where it exists in your organization.
  2. Assess it and use analytics to replicate the targeted reviews.
  3. Build processes in place to stop claims from going out before you are sure they are accurate. Or, as sure as you have the resources to be.

Remember that this is what we do at Norwood, and can help you with revenue protection.

 

Jason Jobes, SVP, Solutions

Norwood

jason@norwood.com

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