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Medicare Advantage, a fast-growing private alternative to original Medicare, has enrolled more than than 26 million people. Humana Inc. is one of the largest of these insurers. While pop with seniors, Medicare Advantage has been the target of multiple government investigations. Pablo Martinez Monsivais/AP hide explanation

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Pablo Martinez Monsivais/AP

Medicare Advantage, a fast-growing private culling to original Medicare, has enrolled more than 26 1000000 people. Humana Inc. is one of the largest of these insurers. While pop with seniors, Medicare Reward has been the target of multiple authorities investigations.

Pablo Martinez Monsivais/AP

A Humana Inc. health plan for seniors in Florida improperly collected almost $200 one thousand thousand in 2015 by overstating how ill some patients were, according to a new federal audit, which seeks to hook back the money.

The Health and Human Services Office of Inspector General's recommendation to repay, if finalized, would be "by far the largest" audit penalty always imposed on a Medicare Advantage visitor, said Christopher Bresette, an HHS assistant regional inspector general.

"This [money] needs to come back to the federal government," he said in an interview.

Humana sharply disputed the findings of the audit, which was set for public release Tuesday. A spokesman for the company said Humana will piece of work with Medicare officials "to resolve this review" and noted that the recommendations "do not represent final determinations, and Humana volition have the right to appeal."

Medicare Reward, a fast-growing individual alternative to original Medicare, has enrolled more than 26 million people, according to America's Health Insurance Plans, an industry merchandise group. Humana, based in Louisville, Ky., has about iv million members and is one of the largest of these insurers.

While popular with seniors, Medicare Advantage has been the target of multiple government investigations, Section of Justice and whistleblower lawsuits and Medicare audits that concluded that some plans boosted their government payments past exaggerating the severity of illnesses they treated. One 2020 report estimated that improper payments to the plans topped $16 billion the previous twelvemonth.

Only efforts to recover even a tiny fraction of the overpayments in past years take stalled amid intense manufacture opposition to the government's inspect methods.

At present the OIG is rolling out a series of audits that could for the first time put health plans on the hook for refunding tens of millions of dollars or more than to Medicare. The OIG is planning to release 5 to seven similar audits within the side by side year or ii, officials said.

The Humana audit, conducted from February 2017 to August 2020, tied overpayments to medical weather that pay health plans extra because they are costly to treat, such every bit some cases of cancer or diabetes that have serious medical complications.

Auditors examined a random sample of 200 patients' medical charts to make sure the patients had the diseases the health plans were paid to treat, or that the conditions were as astringent equally the wellness plan claimed.

For example, Medicare paid $244 a calendar month — or $2,928 for the year — for one patient said to exist suffering from serious complications of diabetes. But medical records Humana supplied failed to ostend that diagnosis, meaning the health plan should have received $163 less per calendar month for the patient'southward intendance, or $1,956 for the year, according to the inspect.

Similarly, Medicare paid $4,380 too much in 2015 for treatment of a patient whose throat cancer had been resolved, co-ordinate to the inspect. In other cases, withal, auditors said Medicare underpaid Humana by thousands of dollars because the plan submitted incorrect billing codes.

In the cease, auditors said Medicare overpaid Humana past $249,279 for the 200 patients whose medical charts were closely examined in the sample. Based on those 200 cases, auditors used a technique called extrapolation to gauge the prevalence of such billing errors across the health plan.

"Every bit a effect, we estimated that Humana received at least $197.7 million in net overpayments for 2015," the inspect states, adding that Humana'due south policies to prevent these errors "were not e'er effective" and need comeback.

The OIG notified Humana of its findings in September 2020, according to the audit. A final decision on collecting the money rests with the Centers for Medicare & Medicaid Services, or CMS, which runs Medicare Advantage. Under federal law, the OIG is responsible for identifying waste matter and mismanagement in federal health care programs simply tin merely recommend repayment. CMS had no annotate.

Though controversial, extrapolation is commonly used in medical fraud investigations — except for investigations into Medicare Advantage. Since 2007, the industry has criticized the extrapolation method and, as a consequence, largely avoided accountability for pervasive billing errors.

Industry protests aside, OIG officials say they are confident their enhanced audit tools will withstand scrutiny. "I believe what nosotros take here is solid," OIG official Bresette said.

Michael Geruso, an associate professor of economics at the Academy of Texas-Austin who has researched Medicare Advantage, said extrapolation "makes perfect sense," and so long as information technology is based on a random sample.

"Information technology seems like this is a healthy step forrard past the OIG to protect the U.S. taxpayer," he said.

The OIG used the extrapolation technique for the first fourth dimension in a February inspect of Blue Cantankerous and Blue Shield of Michigan that uncovered $14.5 million in overpayments for 2015 and 2016. In response, Bluish Cross said it would take steps to ferret out payment mistakes from other years and refund $14.v meg. Bluish Cross spokesperson Helen Stojic said that process "is still awaiting."

Just Humana, with a lot more than money on the line, is fighting back. Humana "takes keen pride in what the visitor believes to exist its manufacture-leading approach" to ensuring proper billing, Sean O'Reilly, a visitor vice president, wrote in a December 2019 letter to the OIG that blasted the audit.

O'Reilly wrote that Humana "has never received feedback from CMS that its program is deficient in any respect."

The ix-folio letter argues that the inspect "reflects misunderstandings related to certain statistical and actuarial principles, and legal and regulatory requirements." Requiring Humana to repay the money "would represent a serious departure from the statutory requirements underlying the [Medicare Advantage] payment model," the company said.

Humana did persuade the OIG to shave off about $65 million from its initial approximate of the overpayment. In 2015, Medicare paid the programme about $5.6 billion to treat about 485,000 members, by and large in Southward Florida.

Humana is not solitary in disapproving of the audits.

AHIP, the industry trade group, has long opposed extrapolation of payment errors, and in 2019 called a CMS proposal to start doing it "fatally flawed." The grouping did not respond to requests for comment.

Wellness intendance industry consultant Richard Lieberman said insurers remain "vehemently opposed" and will likely head to court to try to sidestep any multimillion-dollar penalties.

Lieberman noted that CMS has "waffled" in deciding how to protect tax dollars as Medicare Advantage plans have grown apace and cost taxpayers more than than $200 billion a year. CMS says it has yet to complete its ain audits dating to 2011, which are years overdue.

The dispute has been largely invisible to patients, who are not direct affected past overpayments to the plans. Many seniors sign upwardly because Medicare Advantage offers benefits not included in original Medicare and may cost them less out-of-pocket, though it restricts their option of doctors.

Merely some critics debate that inaccurate medical files pose a chance of improper treatment. Dr. Mario Baez, a Florida physician and whistleblower, said seniors can exist "placed in harm's mode due to false information in their medical records."

Kaiser Health News is an editorially independent newsroom and program of the Kaiser Family unit Foundation and is not affiliated with Kaiser Permanente.

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Source: https://www.npr.org/sections/health-shots/2021/04/20/988817003/humana-inc-overcharged-medicare-nearly-200-million-federal-audit-finds