Delays in Medicare Advantage Health Plans Amidst Coronavirus

Federal health officials have temporarily halted some efforts to recover hundreds of millions of dollars in overpayments made to Medicare Advantage health plans.

The Centers for Medicare & Medicaid Services (CMS) says the decision will allow insurers and the agency to “focus on patient care,” and will last “until after the public health emergency has ended.”

But critics aren’t convinced this is a wise decision.

“Some loosening of regulations during a crisis is necessary. But is this an abdication of oversight?” asked David Lipschutz, associate director and a senior policy attorney with the Center for Medicare Advocacy. “This is a serious concern we will have to grapple with at some point.”

COVID-19 vs. Medicare Advantage plans 

The coronavirus emergency is putting a unique strain on Medicare Advantage plans. Unlike standard Medicare, which pays medical providers for each service it renders, Medicare Advantage plans are paid based on the health of members. This means they receive higher rates for sicker patients and less for those in robust health.

Medicare Advantage plans are offered by private health insurers under contracts with Medicare. More than 24 million Americans are Medicare Advantage plan beneficiaries; most of them are seniors at a relatively high risk of serious health complications from the pandemic.

The added costs these health plans will shoulder as a result remains unclear, but several plans have announced they will waive copayments for COVID-19 testing and care. 

The insurers assess the health status of each member through face-to-face medical visits, which have been sharply curtailed by the crisis. The industry also argues that during the COVID-19 emergency, health plans and their doctors have little time to process paperwork.

“There’s a recognition that providers need to be focused on treating the epidemic,” said Thomas Kornfield, a senior consultant with the healthcare consulting firm Avalere Health and a former CMS official. Asking doctors and insurers to prepare medical records for review “when they face an unprecedented situation is not a good idea,” he said.

Whistleblower cases 

A large number of whistleblower cases have been emerging as a primary tool for holding health plans accountable. In result, the CMS audit program has suffered from the fierce protests. The industry argues the audits, called risk adjustment data validation (RADV), are flawed and the results unreliable.

The March 26 Justice Department civil case accuses Anthem, whose holdings include several large Blue Cross Blue Shield plans, of illegally billing Medicare for diseases that were not supported by medical records. Anthem received more than $112 million in improper payments for 2015, according to the government.

Anthem denied any wrongdoing, stating, “We are confident that our health plans and associates have complied with Medicare Advantage regulations.”

Still, concerns that some plans overcharge Medicare have been going on for years. In December 2019, the Human Services inspector general linked alleged schemes to $6.7 billion in questionable payments during 2017.

On Monday, April 2, CMS announced a 1.66% rate increase for the plans in 2021.

In response, on Tuesday, April 3, advocacy group, Better Medicare Alliance (BMA), wrote to CMS Administrator, Seema Verma, and asked CMS to “monitor the unanticipated costs incurred as a result of the COVID-19 crisis, and work with Congress to put in place appropriate financial protections, such as excess loss protection for Medicare Advantage.

The BMA applauded CMS’s decision to relax auditing and other paperwork requirements. The CMS audits are designed to curb overcharging by Medicare Advantage plans, to which the government pays more than $200 billion a year. 

These controversies have resulted in long audits and the collection recouping overpayments delays. CMS is years behind schedule– officials say they have yet to complete audits for 2011, 2012 and 2013.

CMS action plan

CMS has stated that they will continue to review some audit materials, but suspend the collection of records for reviews of 2015 payments and beyond until “the public health emergency has ended.” This also temporarily waives the collection of some data the government uses to rate the quality of health plans and patient satisfaction with their Medicare plans.

They are “reprioritizing” their enforcement of regulations to focus on problems that could negatively affect Medicare patients during this COVID-19 pandemic and reduce the “lack of access to critically needed health services or prescription drugs and complaints alleging infection control concerns, including COVID-19 or other respiratory illnesses.”

As CMS has stated, they are, “committed to allowing health plans, providers, and physician offices to focus on caring for Medicare beneficiaries during this public health emergency and not put staff at health plans at risk by requiring travel or collection of data in offices that are overwhelmed by patients needing care.”


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