By JENNIFER COLAGIOVANNI
Wachler & Associates, PC
In August 2023, the Department of Health and Human Services (HHS) Office of Inspector General (OIG) announced its strategic plan for managed care oversight. OIG’s plan involves rigorous oversight of managed care plans while also closely coordinating with the plans in the efforts to fight fraud, waste, and abuse. OIG’s plan will scrutinize Medicare and Medicaid managed care contracts from inception through enrollment, reimbursement, services, and renewal. In order to address fraud, waste, and abuse risks, the goal of OIG’s plan is to hold Medicare Advantage organizations (MAOs) and Medicaid managed care organizations (MCOs) accountable.
Currently, more than half of Medicare enrollees and more than 80% of Medicaid enrollees are covered by managed care programs. In order to oversee the almost $700 billion that the federal government spent on managed care programs in 2022, OIG has set out four stages of the managed care life cycle that it intends to investigate: (1) plan establishment and contracting, (2) enrollment, (3) payment, and (4) provision of services.
Plan Establishment and Contracting: OIG intends to review activities that occur when the Centers for Medicare & Medicaid Services (CMS) or states initially establish or renew managed care contracts. In this contract review phase, OIG will evaluate whether MAOs and MCOs are providing the government with accurate information, including in their bids, and abiding by the contract terms for their plan design, service offerings, and coverage area.
Enrollment: OIG will review processes related to the enrollment of individuals into the plans. OIG has identified that there are cases where the marketing tactics used to attract enrollees violate marketing guidelines. Specifically, OIG will focus on these potentially aggressive marketing campaigns as well as agent or broker activities, eligibility determinations, and accuracy of enrollment information.
Payment: OIG will track CMS and state payments to plans, as well as plan payments to providers, with an eye on risk adjustment. Specifically, the government’s primary risk is associated with capitation payments to plans, including those based on risk adjustments. OIG has expressed its concern that plans receiving risk-adjusted payments may be incentivized to make enrollees appear sicker than they are to receive higher government reimbursement. In addition to risk adjustment, the strategic plan sets forth focus areas aimed at payment accuracy, medical loss ratio, and value-based care arrangements. Further, the OIG will continue to investigate the overlap in providers engaged in alleged fee-for service fraud that also provide services as part of managed care networks.
Services to Enrollees: OIG will investigate enrollees’ access to quality healthcare services, with an eye toward different payment models that trigger different incentives among managed care plans. The plan identifies non-traditional benefits as well as barriers impacting enrollees’ access to services as potential areas for scrutiny. In analyzing access to services, OIG will focus on provider network adequacy, ineligible or untrustworthy providers, coverage determinations, care that meets clinical guidelines, and fraud schemes that cross multiple plans and/or federal healthcare programs.
OIG has set forth strategic goals and objectives advanced by its oversight efforts: (1) promoting access to care for enrollees, (2) providing comprehensive financial oversight, and (3) promoting data accuracy and data-driven decisions. These goals are directly aimed at protecting Medicare and Medicaid enrollees by ensuring access to quality healthcare services, including mental health services, and ensuring that care provided is safe, effective, and equitable. Given the significant government expenditures, the objectives focused on financial oversight are twofold: the accuracy of risk-adjusted capitated payments, and documentation and diagnosis submission patterns that underlie these payments, as well as curbing provider-level fraud against MAOs and MCOs. Timely data and data accuracy advance these oversight goals by preventing questionable payments and encouraging data-driven decision making at various points in the managed care life cycle.
OIG’s strategic plan likely means more audits of plans and providers participating in Medicare Advantage and managed care organizations. This focused plan may also be indicative of increased audit activities to come as OIG and government contractors investigate the overlap in providers engaged in scrutinized activities both in managed care networks and in fee-for-service Medicare and Medicaid.