GAO recommends changes in CMS auditing process

The U.S. Government Accountability Office (GAO) released its report and recommendations on the Centers for Medicare & Medicaid Services (CMS) audits for Medicare Advantage (MA) organizations this week.

CMS estimates that $14.1 billion was overpaid to MA organizations in 2013. A large part of this overpayment was due to unsupported diagnoses.

MA organizations are paid a specific monthly amount for each enrolled Medicare beneficiary. The amount is determined by the beneficiary's health status and the estimated cost of Medicare-covered services. The MA organizations had submitted payment adjustments for the unsupported beneficiary diagnoses.

The GAO reviewed how CMS is addressing the estimated 9.5 percent of improper payments to MA organizations. With total payments of approximately $160 billion to MA organizations in 2014, the overpayments add up to more than $15 billion.

The study determined that delays in the risk adjustment data validation (RADV) audits conducted by CMS have resulted in problems identifying and recovering the improper payments. The 2007 and 2011 RADV audits have not been completed. The delays are due to technical difficulties in transferring medical records from the MA organizations, a lack of specific time requirements and a failure to establish timeframes for appeals.

In addition, the recovery audit program has not been expanded to MA organizations. The Patient Protection and Affordable Care Act required that the program be expanded by the end of 2010. Using recovery audit contractors (RAC) would increase the number of RADV audits.

The GAO recommended that these processes be improved. The contracts included in the RADV audits, timeliness of audits and incorporating RACs were specifically cited as problem areas to be addressed.

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