Medicare Advantage Plans Under Expanded Scrutiny
Medicare Advantage Plans are one alternative for Medicare beneficiaries in place of Medicare Part B (traditional Medicare). Most Medicare Advantage (MA) plans offer additional benefits such as Medicare drug coverage, dental coverage, and other types of services to Medicare patients beyond the usual coverage under the Medicare Fee for Service program. CMS contracts with private companies that offer these services to Medicare beneficiaries. Section 1853(a) (1) (C) of the Social Security Act requires CMS to risk-adjust payments made to the Medicare Advantage plan. These payments are adjusted to account for differences in health status and demographic characteristics of the Medicare beneficiary. CMS pays the Medicaid Advantage Plan a monthly amount for each Medicare beneficiary enrolled in the MA plan. The risk-adjusted payments are based on the diagnoses, meaning higher payments are paid to the MA plan for patients with serious or chronic conditions.
CMS conducts Risk Adjustment Data Validation (RADV) audits to confirm that the diagnosis codes submitted for payment support the medical record. CMS recently announced that they are aggressively expanding the auditing efforts of MA plans and will invest additional resources to expedite completion of these audits by early 2026. Included in the expansion of these audits, CMS will
Engage in advanced technology to review medical records and flag unsupported diagnoses.
Increase audit volume from auditing 60 plans a year to approximately 550 plans
Increase the volume of 35 records per health plan per year to between 35 and 200 records per health plan per year.
Expand the workforce by increasing the team of 40 medical coders to approximately 2,000 medical coders by September 1, 2025. The medical coders will manually review and verify flagged diagnoses to ensure they are accurately reported.
CMS is collaborating with the Department of Health and Human Services (HHS) and the Office of the Inspector General (OIG) to recover overpayments and ensure that the MA plans comply.
Diagnosis coding validates medical necessity and the conditions managed by practitioners. Practitioners should be prepared for a significant rise in Medicare Advantage plans' requests for medical records. It is critically important that the medical record documentation supports the ICD-10-CM code reported on each claim to ensure accuracy. In addition, make certain the diagnosis code is reported at the highest level of specificity.
If your practice needs assistance with medical record reviews, please get in touch with us at 312-642-5616 or info@kzanow.com.