The Centers for Medicare & Medicaid Services (CMS) announced that it is ramping up audits of all Medicare Advantage (MA) plans – which could possibly lead to decreased rates for home health providers.

CMS’s plan to audit all eligible MA contracts each payment year and expedite audits for payment years 2018 to 2024, announced last week, is not directed at providers but could lead to further reimbursement rate reductions for home health providers, according to Nicole Fallon, vice president of integrated services and managed care at LeadingAge.

“Anytime MA organizations have their revenues reduced, they look for ways to reduce their outlays,” Fallon told Home Health Care News. “The reality is that MA plans adjust to the financial environment, so it is possible that plans may scale back the number of [options] they offer, reduce the number and magnitude of supplemental benefits, and seek to reduce provider payments further, especially if the audits find significant upcoding.”

Washington, D.C.-based LeadingAge is an association of more than 5,000 nonprofit aging services providers and organizations.

Specifically, CMS plans to complete all outstanding Risk Adjustment Data Validation (RADV) audits for 2018 through 2024 by early 2026. To achieve this goal, it will use “advanced” technology to analyze medical records and pinpoint unsupported diagnoses. Additionally, it will expand its workforce of medical coders to nearly 2,000 by Sept. 1.

CMS plans to increase audits from about 60 MA plans each year to include all eligible MA plans annually. It will also move from auditing 35 records per plan per year to auditing between 35 and 200 records, depending on the plan’s size, according to the CMS.

“We are committed to crushing fraud, waste and abuse across all federal health care programs,” Dr. Mehmet Oz, CMS administrator, said in a statement. “While the administration values the work that Medicare Advantage plans do, it is time CMS faithfully executes its duty to audit these plans and ensure they are billing the government accurately for the coverage they provide to Medicare patients.”

These audits aim to verify that the diagnoses reported by plans and used to determine payments are supported by the enrollee’s medical records, according to Fallon.

While the audits could cause downstream impacts to home health reimbursement rates, Fallon calls them “necessary.”

“LeadingAge has been supportive of the administration and Congress correcting these overpayments to MA plans to preserve the solvency of the Medicare Trust Fund,” she said. “However, we would also like to see CMS make a similar investment in regulatory compliance audits of all MA plans to ensure they are following prior authorization rules and not erroneously delaying or denying care to Medicare beneficiaries enrolled in their plans.”

Additionally, CMS will work with the Department of Health and Human Services’ Office of Inspector General (HHS-OIG) to recover overpayments identified in previous audits. According to CMS, MedPAC estimates that these overpayments could reach as high as $43 billion annually.

“[The Medicare Payment Advisory Commission (MedPAC)] has reported to Congress that MA plans receive payments that are 22% higher than those for traditional Medicare beneficiaries, primarily due to ‘upcoding,’” Fallon said. “By one estimate, this is an additional $1.2 trillion over the next 10 years.”

These audits are necessary to ensure that premium payments to MA are accurate and that taxpayers are not overpaying, according to Fallon.

“If $1.2 trillion is recouped over the next 10 years, that can help in extending the solvency of the Medicare Trust Fund beyond 2036,” Fallon stated.

She explained that research generally indicates MA beneficiaries receive fewer home health services than fee-for-service beneficiaries. However, LeadingAge is looking forward to the June report from MedPAC, which is expected to shed more light on the differences between MA and fee-for-service home health utilization.

“At the end of the day, MA plans can only reduce provider rates so much before providers will just walk away from below-cost reimbursement rates,” Fallon said. “Some providers already are being offered Medicaid-level payments to provide more resource-intensive Medicare services. Further cuts would be untenable. Regrettably, we don’t see plans pay providers substantially more in years where they receive considerable payment rate hikes from CMS.”