Fred Schulte Asks, "Why Not Extrapolate?"

If you have missed his series of articles in the Center for Public Integrity website, you will want to make his acquaintence with his appearance on an National Public Radio article (see link below).  I received a call from Fred last week and we explored the issue of extrapolation penalties for Medicare Advantage RADV audits.

In short, Fred's contention is that there is "upcoding" of procedure codes for FFS Medicare billing that is subjected to OIG audits and subsequent extrapolation penalites, which should be the same standard applied to diagnostic "upcoding" under Medicare Advantage.  This means that any errors discovered in a RADV audit would be subject to a penalty that is extrapolated across the whole population: chart audit confirmation of diagnostic codes would have zero tolerance for non-validation. 

This view is being voiced now by Senator Grassley and others who are stepping up pressure on CMS to take actions against Medicare Advantage Organizations.  The OIG has set a target amount for recovery of "overpayments" to MAOs based upon this interpretation of "upcoding".  Mr. Schulte's perspective is that "upcoding" on the part of the MAOs is being done to milk the system at the expense of the U.S. Taxpayer.

What is the evidence that "upcoding" is taking place?  First, there is a significantly higher prevalence of diagnoses among Medicare Advantage members than among beneficiaries under Original Medicare.  Second, there was a large percentage of conditions identified in the 2007 RADV audits that failed validation. Putting together these two data points, the conclusion being drawn is that the MAOs are "gaming the system". 

At a minimum, the pressure being created by this publicity is going to turn the thumb screws on CMS to be more transparent about their methodology and approaches to ensuring that the U.S. Taxpayers are not being "gouged" by the MAOs.  Would this cause CMS to be more forthcoming about their findings in contract level RADV audits, as well as their tools and standards?  Perhaps.  Would our industry welcome the disclosure of "bright line" transparency?  We are of mixed opinions about this since ambiguity allows the lattitude that some relish. But it also provides a grey zone that invites abuse by some. 

Get informed. Get involved in RISE and give us your opinions.  We are going to have to work together on moving towards more compliant and more accurate outcomes. 


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