Medicare Claims at Risk

Medicare Claims at RiskPosted by Kelly Sauders, Partner, Deloitte & Touche LLP

The Centers for Medicare and Medicaid Services (CMS) have now started to implement their long-anticipated Risk Adjustment Data Validation (RADV) audits. These audits could pose a serious financial risk for health plans, since CMS will be extrapolating the audit findings from a small sample of 201 plan members and then using the results to statistically value and recoup overpayments across the plan’s entire member base. The initial audits will cover the 2011 payment year with diagnosis codes submitted with 2010 dates of service.

A number of plans have already been selected for the first wave of audits, and once a plan is notified which 201 members are being analyzed, it will have just 16 weeks to work with hospitals and physicians to provide medical records and other documentation to support its Medicare Advantage Hierarchical Condition Categories (HCCs).

Given the potential impact and risks, if a plan has not been selected for a RADV audit, it should consider performing mock RADV audits in advance to pro-actively test current risk exposure related to the new audit process. Every plan will eventually be audited, and once selected a plan may not have enough time to identify and address any problems. A mock audit can provide an organization with advance insight into its preparedness and help uncover areas that may pose risk. Organizations can then make necessary corrective actions and help mitigate the impact of a future RADV audit.

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