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This may come as a shock: The federal government believes some health insurance companies may be exaggerating patient conditions in order to charge more for services. To find out how rampant this odious behavior may be, the Centers for Medicare and Medicaid Services is preparing to launch a beefed-up auditing program of Medicare Advantage patient billing records. 

In a lengthy request for information from interested contractors to help carry out the initiative, CMS outlines the problem: Patient diagnoses, it knows, are being intentionally miscoded by insurers to up the level of the patient’s medical problem. But it isn’t sure how widespread the situation  has become. 

CMS has a formula for assessing such practices: the Risk Adjustment Data Validation, which “measure[s] the extent to which inaccurate diagnosis codes impact HCC assignments and the associated payment for Medicare Advantage beneficiaries. The validation process involves the evaluation and analysis of the risk adjustment data via medical record review,” CMS says in its RFI. 

At this point, CMS is taking the first step toward an official overpayment recovery program: seeking out contractors that can take on the task of reviewing massive amounts of billing data and offer a more accurate assessment of how much fraud is taking place. 

In its request,  CMS is careful not to  promise anything. We’re just wanting to see who’s out that with the expertise we need, it says; we’re not committing to anything more than that. However, this request comes on the heels of an earlier announcement that CMS intended to expand its Medicare Advantage audit efforts in hopes of catching more fraud and recovering funds from those responsible.  

That initiative has not been popular with hospitals and physicians, who see it as yet another layer of paperwork and oversight. Opposition from the health care sector notwithstanding, this latest request demonstrates CMS’s commitment to the recovery program — it’s clearly going to follow through on the initiative by contracting the work out to the toughest audit team taxpayer dollars can buy.  

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Dan Cook

Dan Cook is a journalist and communications consultant based in Portland, OR. During his journalism career he has been a reporter and editor for a variety of media companies, including American Lawyer Media, BusinessWeek, Newhouse Newspapers, Knight-Ridder, Time Inc., and Reuters. He specializes in health care and insurance related coverage for BenefitsPRO.

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