Introduction
The U.S. healthcare system’s complexity has long drawn scrutiny, especially when it comes to Medicare Advantage (MA) programs. Recently, the Department of Health and Human Services (HHS) Office of Inspector General (OIG) conducted audits of Humana and Aetna, two major Medicare Advantage providers. These audits highlighted significant overpayments that these companies received from the Centers for Medicare and Medicaid Services (CMS). This blog will delve into the details of the OIG’s findings, their implications, and the responses from both Humana and Aetna.
Overview of OIG Audits on Humana and Aetna
The Role of OIG in Medicare Advantage Audits
The HHS Office of Inspector General is tasked with safeguarding the integrity of federal healthcare programs. As part of their oversight, the OIG frequently audits Medicare Advantage plans to ensure that payments made to insurers are in line with federal regulations. One of the most critical aspects of these audits is to verify the accuracy of diagnosis codes submitted to CMS by Medicare Advantage plans. These codes directly influence the amount of reimbursement the insurers receive from the federal government.
Why Are Overpayments a Concern?
Overpayments occur when MA plans submit inaccurate diagnosis codes, which result in higher reimbursements from CMS. These payments distort the costs of Medicare, placing an unnecessary financial burden on taxpayers. To combat this issue, OIG audits help identify overpayments, enabling CMS to recover funds and ensure that future payments align with actual patient care needs.
Breakdown of Humana and Aetna Medicare Advantage Overpayments
OIG’s Findings for Humana
In an audit released on September 25, 2024, the OIG estimated that Humana had received $13.1 million in Medicare Advantage overpayments between 2017 and 2018. The audit focused on a specific MA contract that covered approximately 250,000 enrollees in 2018. While the OIG recommended Humana repay $6.8 million of the identified overpayments, it stopped short of demanding the full amount due to legal restrictions preventing the agency from reclaiming overpayments from contracts predating 2018.
OIG’s Findings for Aetna
Similarly, the OIG conducted an audit of HealthAssurance Pennsylvania, a subsidiary of Aetna, covering the years 2017 and 2018. The audit revealed that Aetna received $4.2 million in overpayments during this period. As in the Humana audit, the OIG’s recommendations included the repayment of these funds. However, both Humana and Aetna have voiced their disagreement with the OIG’s findings, contesting the audit methodology used.
Implications of Overpayments for Medicare Advantage Plans
Understanding the Impact of Diagnosis Codes and Reimbursements
Diagnosis codes are central to how MA plans are reimbursed by CMS. These codes reflect the health status of beneficiaries and are used to calculate risk-adjusted payments. The more severe a patient’s condition appears on paper, the higher the reimbursement an MA plan receives. This creates an opportunity for some insurers to submit exaggerated diagnosis codes, a practice known as “upcoding,” which has led to widespread concerns about overpayments.
The Prevalence of Upcoding in Medicare Advantage
Nearly every major Medicare Advantage insurer has faced allegations of upcoding. Upcoding not only inflates reimbursement rates but also undermines the integrity of the Medicare Advantage program. The OIG’s audits, including the recent ones involving Humana and Aetna, are part of a broader effort to crack down on these practices.
The Future of Medicare Advantage Audits and Overpayments
Stricter Audit Standards Introduced in 2023
In response to growing concerns about overpayments, CMS finalized tougher audit standards in 2023. These new rules apply to contracts from 2018 onward and allow the agency to more aggressively pursue repayments from MA insurers. The introduction of these stricter guidelines has the potential to recover billions in federal funds that were previously misallocated.
Legal Challenges to CMS’ New Rules
As expected, the imposition of tougher audit standards has not gone unchallenged. Humana, for example, has taken legal action against CMS in an attempt to overturn these new rules. The outcome of this legal battle could have a significant impact on the future of Medicare Advantage audits and the enforcement of repayment requirements.
Reactions from Humana and Aetna
Humana’s Response
Humana has voiced strong objections to the OIG’s findings. A spokesperson for the company expressed concerns about the audit’s methodology, stating that CMS should be auditing all Medicare Advantage plans consistently using a fair and transparent process. Humana also disputed the recommendation to refund overpayments, arguing that the audit did not accurately reflect the underlying principles of the Medicare Advantage model.
Aetna’s Defense
Aetna has also contested the OIG’s findings. In a statement, a spokesperson for Aetna argued that the OIG audit employed a targeted sample rather than a comprehensive review of the company’s compliance with federal regulations. Aetna maintains that its compliance programs are robust, and it disagrees with the conclusions drawn by the audit.
Conclusion
The recent OIG audits of Humana and Aetna underscore the ongoing challenges associated with Medicare Advantage overpayments. As CMS continues to tighten its auditing standards, insurers are facing increased scrutiny over their billing practices. While Humana and Aetna dispute the findings, the broader effort to ensure the accuracy of Medicare Advantage payments will likely continue to intensify in the coming years. For now, these audits highlight the critical role of oversight in protecting the integrity of the Medicare Advantage program and ensuring that taxpayer funds are spent appropriately.
Discover the latest payers’ news updates with a single click. Follow DistilINFO HealthPlan and stay ahead with updates. Join our community today!
FAQs
1. What is the role of the OIG in auditing Medicare Advantage plans?
A. The OIG audits Medicare Advantage plans to ensure that diagnosis codes and reimbursement requests align with federal regulations, preventing overpayments to insurers.
2. What are Medicare Advantage overpayments?
A. Overpayments occur when insurers receive more money from CMS than they are entitled to due to inaccurate or exaggerated diagnosis codes.
3. How much did Humana and Aetna allegedly receive in overpayments?
A. The OIG estimated that Humana received $13.1 million in overpayments, while Aetna’s subsidiary received $4.2 million between 2017 and 2018.
4. What are the new audit standards introduced by CMS?
A. CMS finalized tougher audit standards in 2023 that apply to contracts from 2018 onward, allowing for more aggressive recovery of overpayments from insurers.
