Aetna’s Medicare Advantage business is being audited by the Office of the Inspector General at HHS, the parent company CVS Health disclosed in a federal document 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 gaining in popularity. Aetna covers 4.1 million Medicare Advantage and Medicare supplement customers.
Humana and Anthem’s Medicare Advantage operations have also 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 costs of care and the actual price of treatments, according to the OIG report.
A month later, the watchdog issued a similar report recommending that Indianapolis-based Anthem return about $ 3.5 million to CMS after discovering that the insurer incorrectly coded more than half of its Medicare Advantage claims. , which resulted in inflated payments. The OIG declined to comment on CVS Health’s ongoing audit.
“The company expects CMS and the OIG to continue with these types of audits,” CVS Health wrote in a filing with the US Securities and Exchange Commission.
CVS Health did not respond to an interview request on the matter.
Like other insurers, Aetna’s Medicare Advantage reimbursement is based on regional trends and utilization of traditional fee-for-service Medicare, as well as adjustments based on policyholder risk scores. Someone with chronic conditions has a higher risk score, so the government pays more to the Medicare Advantage plan that covers them.
The risk scores were intended to incentivize plans to cover all people eligible for Medicare, not just the healthiest. But a series of recent whistleblower lawsuits allege that health plans have been adding unnecessary codes or inflating scores to get more money.
Insurers contend that the inspector general’s assessment is fundamentally flawed. The OIG extrapolates its findings based on a small sample of the risk scores of Medicare Advantage members, making its analysis actuarially incorrect and unfairly punitive for payers, insurers argue.
This method of data collection is likely to result in insurers paying less than they would if auditors reviewed each claim, a practice the OIG considers unrealistic, the agency says. Since 2019, a regulation is pending to update the OIG methodology.
During CVS Health’s 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- vaccines. 19 and diagnostic tests, and retail customers. . Meanwhile, the healthcare giant’s net revenue fell 6% to $ 2.78 billion, thanks to an increase in COVID-19 costs among its Aetna members.