Medicare Advantage Overpayments May Top $3B
He emphasizes that the GAO is not accusing health plans of upcoding, as some reports in the media implied. Part of the problem is that in Medicare Advantage populations, providers may be doing a better job of recording specific diagnostic codes for their enrollees, perhaps because they have more of an incentive, he said.
Fee-for-service providers, on the other hand, will file a claim for "a mid-level office visit," and neglect to put in a specific diagnosis, Cosgrove explains. In coming up with its risk adjustment formula to determine capitation rates for the plans, Medicare looked at spending for large populations based on what limited fee-for-service diagnostic information it had.
CMS officials did adjust risk scores to reduce some of the overpayment, which would have been $3.89 billion to $5.8 billion more before the correction, the report says.
But the adjustments were not enough in 2010 and beyond. "By continuing to implement the same 3.4% adjustment for coding differences in 2011 and 2012, CMS likely underestimated the impact of coding differences in 2011 and 2012, resulting in excess payments to MA (Medicare Advantage) plans," the report says.
Robert Zirkelbach, spokesman for America's Health Insurance Plans, says the coding differences are the result of more diligence by Medicare Advantage plans.
- CEO Exchange: Preparing for Population Health
- Advocate, NorthShore Deal Would Create 16-Hospital System
- Better HCAHPS Scores Protect Revenue
- Narrow Networks Cut Costs, Not Quality, Economists Say
- 3 Strategies for Retaining Millennial Employees
- Power of price: In South FL and the nation, healthcare costs often are shrouded in secrecy
- Two NY hospitals to offer free hip and knee replacement surgeries for qualifying patients in December
- Hospital mergers may lead to higher prices
- Healthcare data of 1 million NJ patients compromised since 2009
- 'Early Offer' Malpractice Programs May Spur Reform