Based on findings of the Payment Accuracy Report recently issued by the Department of Health and Human Services (DHHS), six Democratic United States Senators questioned the Centers of Medicare and Medicaid Services’ (CMS) oversight and enforcement of Medicare Advantage (MA) plans. In a letter dated September 13, 2019, the Senators highlighted their belief that MA plans have been overbilling the federal government for years, specifically in excess of $30 billion dollars over the last three years.

The Senators requested that CMS provide a response on how the Agency intends to hold MA plans responsible for failing to meet purported contractual obligations, including the accuracy of risk adjustment submissions.

This letter comes on the heels of several setbacks that may affect the Agency’s ability to police Medicare Advantage plans. The Supreme Court ruling in Azar v. Allina Health Services, No. 17–1484 (U.S. June 3, 2019) may restrict CMS’s ability to rely on interpretive publications and sub-regulatory guidance in lieu of formal rulemaking. Additionally, CMS’s Medicare Part C and D overpayment regulation was struck down in United Healthcare Ins. Co. v. Azar, 330 F. Supp. 3d 173 (D.D.C. 2018). Finally, the health plan industry comments to CMS’s proposed Risk Adjustment Data Validation (RADV) rule have heavily criticized the Agency’s proposed handling of RADV, CMS’s primary risk adjustment enforcement tool.

Although payment integrity and risk adjustment were at the forefront of their concerns, the Senators flagged other issues regarding CMS’s oversight of MA operations that they believe could create access to care barriers for MA plan members. The Senators asserted that MA plans fail to provide members with complete and accurate provider directories to make informed decisions when choosing a plan and that CMS has failed to ensure these MA networks even comply with network adequacy requirements. The Senators further noted that the MA plans have not been forthright in providing comprehensive encounter data that reflects the actual services provided to its members, encouraging a reduction in bonus payments for failure to disclose this information. Finally, the Senators called for more transparency with encounter data, denial information, Star ratings and potential out-of-pocket expenses, encouraging CMS to make this information publicly available.

CMS has mechanisms to police most of the concerns raised by the Senators through its MA Program Audits, Civil Monetary Penalties and contract sanctions, which can include termination. However, as noted in CMS’ 2018 Program Audit report, the plans audited by the Agency in 2018 covered only 2% of the MA enrollee population, though the Agency levied 10 civil monetary penalties and 3 intermediate sanctions on audited plans for issues of non-compliance.

The letter from this group of Senators follows previous concerns expressed by Senator Chuck Grassley in 2017 and several high profile settlements related to the MA Program, all of which suggest that MA plans, downstream providers and vendors should increase their efforts to comply with rules and be prepared for increased government scrutiny.

Ashley Creech, a Law Clerk (not admitted to the practice of law) in the firm’s Washington, DC office, contributed significantly to the preparation of this post.