Episode Details

Medicare Advantage (MA), otherwise known as the "money machine," is often the most profitable parts of many payers' business lines. Medicare Advantage plans can make a lot of cash if they are good at what they do. Look at any of these large, consolidated carriers' financial statements to get the magnitude of that statement.

Also, in 2022, Medicare Advantage plans have enrolled 28 million participants between them, which represents 45% of all Medicare beneficiaries. This marks a three-point improvement in penetration over 2021 and a total program enrollment growth of 9%.

All of this is not a secret.

So, what's happening right now is that this administration is looking carefully at Medicare Advantage plans and what they have been up to. We have had an amping up of government oversight, including regulatory actions and program audits.

In this healthcare podcast, I am speaking with Betsy Seals, who is CEO and cofounder of Rebellis Group, which is a managed care consulting firm working with Medicare Advantage plans.

Betsy says (and this is what we talk about in the interview) that there's three main areas that the government is currently scrutinizing:

1. Sales and marketing. There have been these third parties, it seems, these field marketing organizations who were hired to do marketing and sales for some of the Medicare Advantage plans. And because they were third parties, it seems that many of them felt themselves to be excluded from CMS (Centers for Medicare & Medicaid Services) regulations and able to basically mislead prospective members with sales pitches that were highly suspect. Betsy gives some examples of these, and when you hear them, you will see why CMS is cracking down.
2. Recouping improper payments is another area that CMS is all over. Interestingly, as Betsy Seals says in this interview, this might be one area where the government is actually ahead of private sector plans from a technology and analytic standpoint.

CMS seems to have better analytics capabilities and is better at detecting fraud schemes and improper payments than the plans themselves. These plans are not sophisticated enough to notice stuff that CMS detects when it gets ahold of the plan data.

But as unusual as this situation is where the government is ahead of the business sector, I can't say I'm shocked. We have had one guest on this show after another talking about just how far in the past some of these health plans are lagging. Dan O'Neill probably said it most eloquently and notably (EP359).

But I digress.

So, recouping improper payments has the eye of CMS. This means two things largely. It means finding "outlier" codes that some MA plan paid for but which are clearly errors and should not have been paid.

Another improper payment is when plans themselves do a little fancy upcoding so that they make more money than they should in their risk-adjustment payments. This has gotten some major attention lately. Let me quote from an OIG (Office of Inspector General) report:

"Our findings raise concerns about the extent to which certain MA companies may have inappropriately leveraged both chart reviews and HRAs [health risk assessments] to maximize risk-adjusted payments. We found that 20 of the 162 MA companies drove a disproportionate share of the $9.2 billion in payments from diagnoses that were reported only on chart reviews and HRAs, and on no other service records."

The sneaky idea h