Lawsuit by KHN urges government to release Medicare Advantage audit

Federal health officials have agreed to audit 90 private Medicare Advantage health plans for seniors that are expected to reveal tens of millions of dollars in overcharges to the government.

The Centers for Medicare and Medicaid Services agreed to release the records in September 2019 to settle a lawsuit filed by Kaiser Health News against the agency under the Freedom of Information Act.

“It’s incredibly frustrating to have a lawsuit and years of pressure to make this important information public,” said Thomas Burke, a San Francisco attorney who represented KHN pro bono.

“Transparency — on a real-time basis — should be the norm for the public to oversee this multibillion-dollar, taxpayer-funded program,” said Burke, a partner at Davis Wright Tremaine.

Under the settlement, CMS agreed to pay the law firm $63,000 in legal fees and to “make best efforts” to provide the documents within six weeks. At the time of payment, the agency did not admit to improperly withholding records.

CMS had no comment.

KHN filed suit in US District Court in San Francisco to obtain the audits it conducted for 2011, 2012 and 2013. CMS officials said they expect to collect more than $600 million in overpayments from the audit. The company has released the names of the health plans under scrutiny but nothing else.

The cache of federal audits and other documents should provide the most comprehensive look yet at a secretive government auditing program known as Risk Adjustment Data Validation, or RADV. The audit program has struggled to prevent Medicare Advantage health plans from overcharging the government.

RADV audits examine medical records to confirm that patients have the diseases that health plans are paying to treat. Past RADV audits have shown that Medicare Advantage plans often fail to document these claims.

Under the settlement, CMS will release audit spreadsheets that show which medical diagnoses could not be confirmed but revise the overpayment amounts. Audits from 2011 to 2013 are the most recent completed

CMS is expected to decide how to calculate the final overpayment amount later this year. The industry has long opposed RADV audits, arguing the sampling methods are flawed, even though they are widely used in other types of Medicare audits.

Enrollment in the privately managed alternative to original Medicare has more than doubled in the past decade, surpassing 28 million in 2022 at a cost of $427 billion.

Many seniors choose Medicare Advantage plans because they pay less for them than for original Medicare. But critics argue that the plan costs taxpayers billions of dollars more than original Medicare.

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