Billions are Bleeding Out – Is Your Plan Part of the Problem or the Solution?
In a recent congressional hearing, Inspector General Christi A. Grimm laid it out starkly: improper payments are costing taxpayers billions and undermining the integrity of Medicare Advantage (MA) and Medicaid. The message is clear and unforgiving: if your risk adjustment strategy relies on diagnoses captured solely from health risk assessments (HRAs) or chart reviews without evidence of care, your plan is standing on a financial precipice.
This isn’t a theoretical problem. The HHS Office of Inspector General (OIG) has drawn a line in the sand. Diagnoses that aren’t backed by meaningful healthcare services are under the microscope. Extrapolated audits are coming for those who fall short, and the fallout could be catastrophic.
The era of loose risk adjustment practices is over. Compliance isn’t a box to check; it’s a survival strategy.
The Scope of the Problem: Billions in Improper Payments
Improper payments are not small anomalies — they’re a systemic issue that threatens the financial stability of Medicare Advantage plans. In 2022 alone, $15 billion in improper payments were identified. These aren’t just errors; they’re signals of deeper issues in risk adjustment processes, documentation, and compliance.
Here’s what’s fueling the crisis:
● Overreliance on HRAs and Chart Reviews:
Many plans rely heavily on diagnoses captured during HRAs or retrospective chart reviews. But when these diagnoses don’t correlate with actual treatment or documented healthcare services, they become red flags for auditors.
● Extrapolated Audits:
The Risk Adjustment Data Validation (RADV) final rule now allows CMS to extrapolate audit findings. A small sample of errors can be projected across years of payments, turning minor discrepancies into massive financial liabilities.
● Lack of Supporting Evidence:
Diagnoses must be backed by documented clinical services. If the data shows a diagnosis but no corresponding treatment or care, it’s not just an error — it’s a compliance risk that could lead to substantial recoupments.
In this climate, the cost of non-compliance is too high to ignore. The question isn’t if your plan will be audited, but when — and whether you’ll survive the scrutiny.
What This Means for Medicare Advantage Plans
The implications for Medicare Advantage plans are profound. The combination of stricter oversight, extrapolated audits, and reduced leniency means your risk adjustment processes must be airtight. Here’s what’s at stake:
Financial Exposure:
Extrapolated audits can turn a few errors into multi-million-dollar recoupments. Plans that don’t have robust, defensible documentation are sitting ducks for financial clawbacks.Reputation and Trust:
Compliance failures don’t just cost money — they erode trust. Regulators, partners, and members expect transparency and integrity. A publicized audit failure can damage your reputation irreparably.Operational Disruption:
Preparing for and responding to audits is resource-intensive. Plans with inadequate risk adjustment practices will find themselves diverting time, talent, and technology away from strategic goals just to play defense.
In short, improper payments are a multi-dimensional threat. Financial, operational, and reputational risks are converging. Only those who prioritize compliance and precision will emerge unscathed.
How to Fortify Your Plan Against Improper Payments
Surviving the scrutiny of RADV audits and OIG oversight requires a proactive, strategic approach. Here’s how to stay ahead:
1. Evidence-Based Coding Practices
Ensure every diagnosis is tied to documented clinical services. HRAs and chart reviews are valuable tools, but they can’t stand alone. Each diagnosis must have a clear link to patient care — a treatment, a test, or a documented intervention.
2. Real-Time Validation
Implement systems that validate diagnoses at the point of care. Waiting until the end of the year to correct errors is too late. Real-time validation ensures that only accurate, defensible diagnoses enter your risk adjustment calculations.
3. Audit Readiness
Treat every year as if an audit is inevitable — because it is. Invest in processes and technologies that ensure your data submissions are clean, compliant, and defensible. Regular internal audits can identify vulnerabilities before CMS does.
4. Provider Engagement and Education
Your providers are the gatekeepers of accurate coding. Engage them with ongoing education, real-time feedback, and intuitive tools that support precise documentation. When providers understand the importance of compliance, your entire plan benefits.
How Allymar Health Protects You from the Billion-Dollar Drain
In a world where compliance is the new currency, Allymar Health is your fortress against improper payments. The Medicare Advantage Suite delivers the precision, transparency, and validation you need to stay ahead of auditors and regulators.
● Real-Time Diagnosis Validation:
Capture accurate diagnoses at the point of care and validate them immediately. No more retrospective guesswork — just defensible data.
● Integrated Documentation:
Ensure diagnoses are backed by detailed, accessible clinical documentation. Allymar Health’s platform connects diagnoses with corresponding treatments and services, closing the loop on compliance.
● Audit-Ready Processes:
Be prepared for audits before they happen. The Suite’s comprehensive reporting and validation tools enhance your risk adjustment data in preparation for audits.
● Provider Support and Education:
Equip providers with tools and training that make compliance intuitive. Real-time feedback and education enhance documentation and coding practices so that they are aligned with regulatory expectations.
The Time for Compliance is Now – Allymar Health is Your Strategic Shield
Improper payments are a threat you can’t afford to ignore. The consequences are measured in billions of dollars, trust, and operational stability. Plans that take a proactive stance on compliance and precision will survive and thrive. Those that don’t will find themselves in a costly, uphill battle.
With Allymar Health, you’re not just surviving audits — you’re mastering compliance.
The billion-dollar drain is real. Will you be part of the problem or the solution?
