Since we opened our doors 19 years ago, we’ve preached to health insurers to think of the government as your business partner. This week, we got several reminders that insurers’ biggest customers — Medicare, Medicaid, and ObamaCare — are still the regulator. As business conditions improve for health plans across these business lines, government expectations are rising, and scores are about to get settled, as they always are in the second term of a Democratic administration.
We see it in enforcement activity from the Centers for Medicare & Medicaid Services (CMS). We see it in a steadily-rising bar of Star Ratings and other performance measures for health plans for all three programs, the basis of looming contract terminations. And now the White House jumps in with an aggressive schedule of risk adjustment data audits, openly seeking repayments and dropping “f” bombs: fraud, that is.
They named a great film after a moment like this: “There Will Be Blood.”
You can’t argue with the numbers: 2015 remains the most punitive year in Medicare Advantage history. Look at the trend:
CMS is also being much more aggressive this year with data-driven oversight and enforcement. Communications to health plans who are “outliers” in various performance measures, especially in member communications and consumer protections, began recently. A pattern we are seeing play out is CMS chasing down all clients of noncompliant pharmacy benefit managers; where poor Part D performance is seen in one plan, the agency then begins auditing that vendor’s other customers, assuming they’ll get the same findings.
We know that Star Ratings and expanding reporting requirements in Medicare Advantage and Part D mean the bar is rising and establishes data-driven thresholds against which health plans can be penalized and terminated beginning in 2016. CMS announced sweeping new reporting requirements for both programs this week, which inevitably get picked up in Medicaid and ObamaCare rules in following years.
And now the White House is piling on. In Washington, we talk a lot about “setting the terms of debate.” Our industry has lost the debate on risk adjustment coding and has allowed anti-managed care advocates to define payers’ inaccurate diagnostic coding as fraud. A just-disclosed February 2015 letter from President Obama’s Budget Director to Health Secretary Sylvia Matthews Burwell stated, “While some progress has been made on this front, we believe a more aggressive strategy can be implemented to reduce the level of improper payments we are currently seeing…we must continue to explore new and innovative ways to address the problem and attack this challenge with every tool at our disposal…the government estimate of $12.2 billion in these mistakes for fiscal year 2014 remains a concern.” He extended his mandate beyond Medicare Advantage to over $3 billion in questionable payments from Medicaid. This means a spike in data validation audits for payers across both programs with the threat of improper payment clawbacks and even prosecution under the False Claims Act.
There has never been a more Golden Age of opportunity for health insurers in government programs. But the threats are escalating as well, and as my politics professor told me, “99% of political wounds are self-inflicted.” Plans caught up in this dragnet will have gotten plenty of warnings.
The Part C and Part D Reporting Requirements and Supporting Regulations were posted in the PRA Listing on August 24th for review and 30-day comment. Since we are still in this window, this is a great opportunity for Compliance and Operations to review these together. Click here to review the Part C highlights that merit your attention in a blog posted by Regan Pennypacker, Senior Vice President of Compliance Solutions at Gorman Health Group (GHG).
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