Aetna’s Medicare Advantage business is being audited by the HHS’ Office of Inspector General, parent company CVS Health disclosed in a federal filing Wednesday.
CVS Health’s Aetna is under scrutiny as the HHS inspector general cracks down on inaccurate risk-adjustment scores submitted by Medicare Advantage plans, which have been growing in popularity. Aetna covers 4.1 million Medicare Advantage and Medicare supplement customers.
Humana’s and Anthem’s Medicare Advantage operations also have attracted the inspector general’s attention.
In April, the OIG recommended that Louisville, Kentucky-based Humana return nearly $200 million to CMS. Humana charged taxpayers for care its Medicare Advantage members did not need in 2015, the OIG found. This was the largest gap ever recorded between reported care costs and the actual price of the treatments, according to the OIG report.
A month later, the watchdog issued a similar report recommending Indianapolis-based Anthem return about $3.5 million to CMS after finding that the insurer miscoded more than half of its Medicare Advantage claims, resulting in inflated payments. The OIG declined to comment on CVS Health’s ongoing audit.
“The company expects CMS and the OIG to continue these types of audits,” CVS Health wrote in a filing to the U.S. Securities and Exchange Commission.
CVS Health did not respond to an interview request about the matter.
Like other insurers, Aetna’s Medicare Advantage reimbursement is based on regional trends and utilization in traditional fee-for-service Medicare, as well as adjustments based on policyholder’s risk scores. Someone with chronic conditions has a higher risk score, so the government pays more to the Medicare Advantage plan that covers them.
Risk scores were meant to incentivize plans to cover all Medicare-eligible people, not just the healthier ones. But an array of recent whistleblower lawsuits alleges that health plans have been adding unnecessary codes or otherwise inflating scores to get more money.
Insurers maintain that the inspector general’s evaluation is fundamentally flawed. OIG extrapolates its findings based on a small sample of Medicare Advantage enrollees’ risk scores, making their analysis actuarially unsound and unfairly punitive to payers, insurers argue.
This data collection method likely results in insurers paying less than they would if auditors reviewed every claim, a practice the OIG deems unrealistic, the agency says. A regulation to update the OIG’s methodology has been pending since 2019.
During the CVS Health’ most recent quarter, which ended June 30, the company reported 11% year-over-year revenue growth to $72.62 billion, driven by an increase in pharmacy services, COVID-19 vaccinations and diagnostic testing, and retail customers. Meanwhile, the healthcare giant’s net income fell 6% to $2.78 billion, thanks to an increase in COVID-19 costs among its Aetna members.
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