Medicare Advantage plans must proactively ready themselves for RADV audits by intensifying internal reviews, enhancing compliance programs, and closely overseeing coding vendors. Melissa James from Wolters Kluwer suggests that conducting mock audits, expanding chart reviews, and investing in compliance are vital steps. The RADV final rule’s alterations, such as removing the FFS adjuster and implementing extrapolation, emphasize the need for meticulous preparation. James underscores the importance of addressing coding challenges, advocating for technology investment, and maintaining compliance with various regulatory audits.
In anticipation of RADV audits, Medicare Advantage plans must undertake several proactive measures, including internal chart reviews, investment in compliance programs, and vigilant monitoring of coding vendors.
According to Melissa James, a senior consultant at Wolters Kluwer, the implementation of more rigorous internal audits and enhanced coding oversight can provide significant advantages to Medicare Advantage organizations as they navigate the evolving auditing regulations. James shared her insights with HealthPayerIntelligence, emphasizing the need for meticulous preparation to successfully navigate the altered landscape of the Medicare Advantage Risk Adjustment Data Validation (RADV) final rule.
The primary objective of the RADV process is to curtail overpayments in Medicare Advantage by meticulously scrutinizing plans to confirm the accurate representation of beneficiaries’ health conditions through coding activities. Notably, the RADV final rule introduced substantial changes related to the fee-for-service (FFS) adjuster and extrapolation, which raised concerns within the payer community.
One pivotal modification in the final rule involved the elimination of the FFS adjuster from the RADV process. This adjuster had established a margin for errors in FFS payments, creating a baseline for payment errors applicable to Medicare Advantage organizations, and serving as a protective buffer.
Furthermore, the final rule endorsed the adoption of extrapolation to estimate error rates starting from the diagnostics of 2018. Unlike the prior practice of determining repayment amounts at the individual member level, CMS now calculates the error rate across the entire health plan. This shift has led to significantly larger repayment amounts, as clarified by James.
However, the final rule introduces ambiguity in coding regulations and lacks transparency in audit methodologies, making compliance challenging for health plans, James pointed out.
While James doesn’t anticipate intentional upcoding or manipulation of the system by most health plans, she acknowledges the prevalence of human coding errors. Although the final rule presents hurdles for Medicare Advantage plans, it could stimulate investments in technology to effectively address these coding challenges.
To effectively prepare for impending RADV audits, Medicare Advantage plans can prioritize specific actions:
1. Conduct mock RADV audits and increase the frequency of internal audits performed on coding vendors.
2. Extend chart reviews, acknowledging the health plan’s responsibility for submitting diagnosis codes to CMS.
3. Leverage insights from Office of Inspector General (OIG) reports to identify avoidable coding errors.
4. Invest in comprehensive compliance programs to ensure appropriate staffing, policies, and procedures for regulatory success.
Considering the limited timeframe once the audit begins, health plans should proactively fulfill these requirements before the audit notification, as highlighted by James.
Moreover, James emphasized a quote from the final rule indicating that the use of extrapolation should motivate Medicare Advantage organizations to take meaningful steps to rectify improper risk adjustment payments in the future. She encouraged health plans to remember this incentive and proactively mitigate potential repayments through the identification and return of non-validated HCCs.
In the larger context, Medicare Advantage organizations should recognize the significance of all regulatory audits, beyond RADV audits. Compliance with OIG audits and improper payment measure (IPM) audits is crucial in avoiding the scrutiny of high-risk health plans by regulatory bodies.
By diligently adhering to these guidelines, Medicare Advantage organizations can bolster their preparedness for RADV audits and foster a culture of regulatory diligence across various audit scenarios.