DaVita Medical Group has agreed to pay $270 million to the Medicare program after identifying suspect billing practices that incorrectly raised its Medicare Advantage payments, says the Department of Justice (DOJ).
The improper MA payments stemmed from actions taken by HealthCare Partners, a large California-based independent physician association acquired by DaVita in 2012.
HealthCare Partners allegedly used tactics like improper coding guidance to gain additional reimbursements from MA. In one example, the DOJ said HealthCare Partners instructed physicians to use improper diagnosis codes for spinal conditions that yielded increased reimbursement from CMS. DaVita then received a share of HealthCare Partners improperly coded payments from Medicare Advantage payers.
DaVita learned of HealthCare Partners’ activity and voluntarily disclosed the provider’s group practices to the government. Law enforcement officials responded by agreeing to a favorable resolution since DaVita cooperated extensively with CMS and the DOJ.
“This settlement demonstrates our tireless commitment to rooting out fraud that drains too many taxpayer dollars from public health programs like Medicare,” said United States Attorney Nick Hanna.
“This case involved illegal conduct in which patients’ medical conditions were improperly reported and were not corrected after further review – all for the purpose of boosting the bottom line. We will continue to pursue and hold accountable any entity that seeks to illegally increase revenue at the expense of the Medicare Advantage so that the program may continue to remain viable for all who need it.”
DaVita’s $270 million settlement also resolves whistleblower allegations of additional reimbursement improprieties.
The whistleblower said that HealthCare Partners purposely added medical diagnoses that providers did not code during chart reviews. HealthCare Partners then submitted falsely coded diagnoses to inflate Medicare payments from their Medicare Advantage payers. HealthCare Partners also ignored inaccurate diagnoses that should have been removed.
The whistleblower will receive $10,199,100 of the DaVita settlement for his cooperation with federal lawmakers.
“DaVita’s alleged conduct was irresponsible and compromised the integrity of the Medicare program,” said Special Agent in Charge Scott J. Lampert of the US Department of Health and Human Services, Office of Inspector General’s New York Region.
“HHS-OIG will continue to ensure that companies that do business with federally funded health care programs do so in an honest fashion.”
OPINION: How Medicare Advantage can help Philly seniors get high-quality medical care | Michael Nutter
For more than 22 years, I served as mayor and a councilperson of Philadelphia. Now, at the age of 61, I have been looking at my AARP newsletters, and listening to my daughter tell me that I'll soon be able to ride SEPTA as a senior for free! I've also been reflective, thinking about next steps, always with the goal of making things better for the people who live and work here. People my age start taking stock of their lives — and asking themselves, "What do I want to do next?"
Many of my fellow baby boomers likely relate to this sentiment – that there is still so much to do, things to accomplish, people to help, more life to experience.
I've been thinking about this constantly since I left City Hall in 2016 and I recently realized that ensuring the most vulnerable in Philadelphia have access to the same kind of high-quality health care that I have should be my focus. While I was in public service, I was passionate about improving our health-care system. The Affordable Care Act made major advancements, but more needs to be done.
In particular, far too many senior citizens in Philadelphia are still struggling with paying their medical bills. Yes, all Americans over age 65 have access to Medicare, but traditional Medicare has many gaps. It doesn't cover dental, vision or hearing – and you have to sign up and pay for Medicare Part D if you want it to include prescription drugs. Then there is the 20 percent coinsurance in traditional Medicare. The costs add up, quickly, especially if you're a senior on a fixed income, or if you're hospitalized.
There is a solution for this dilemma – and it's not complicated: Medicare Advantage. Medicare Advantage is a part of the Medicare system, but it functions much more like employer-based health insurance. Medicare Advantage covers drugs, vision, dental, and hearing, and has an out-of-pocket cap to protect consumers from huge co-pays. In most cases Medicare Advantage plans cost the same or less than traditional Medicare premiums.
The problem is that not enough of our seniors sign up for Medicare Advantage. More than 250,000 people in Philadelphia qualify for Medicare, but only 112,000 – less than half of the eligible population – are on a Medicare Advantage plan. That means nearly 10 percent of Philadelphians aren't getting the most comprehensive health coverage that is readily available to them.
Part of my work in this next phase of my life will be dedicated to spreading the word about the benefits of Medicare Advantage in Philadelphia. To do this, I decided to partner with Clover Health, a health-tech company that operates extensively in New Jersey and is now expanding into Philadelphia.
What makes Clover Health unique, and why I chose to work with them, is how they combine technology with compassion, quality medical care, and a focus on prevention.
They go beyond normal Medicare Advantage, using a high-tech approach to deliver proactive results to their members – keeping them healthy and enjoying their lives. They serve seniors by sending nurse practitioners for in-home visits when they feel a person is at risk of high blood pressure, hasn't taken their medicine, or is having trouble managing their sugar and diabetes.
Seeing the Clover staff in action providing personalized, caring, inclusive and affordable healthcare made it clear to me that they were the right partner for me and for Philadelphia. The timing is also right. Everyone on Medicare is able to switch to a Medicare Advantage plan during the Annual Enrollment Period, which begins Oct. 15.
So, Philadelphia, you may start hearing my voice on the radio or seeing me on TV talking about my new cause. And if you or your parents sign up for our Medicare Advantage plan, then I'll know the message is getting through.
Michael Nutter was the mayor of Philadelphia from 2008 to 2016, and is a senior adviser for Clover Health.
A variety of traditional and non-traditional investors are starting to capitalize on the stability of the Medicare Advantage program and expansion of the Medicare Advantage health plan market. These companies are leveraging sophisticated technological interfaces, data, and telemedicine to help improve the patient experience and to maximize the Triple Aim.
Why Medicare Advantage?
Medicare Advantage plans (“MA Plans”) are offered by private insurance companies subject to certain standards established by the Centers for Medicare & Medicaid Services. While the Medicare Advantage health plans are responsible for meeting specified levels of benefits and service standards and receive premium funding from the government, they have a high degree of autonomy on how they administer the plans to cover enrolled Medicare beneficiaries. Medicare Advantage funding is risk adjusted for the health status of the enrollee; as a result, effective MA Plans are highly dependent upon real-time data sharing.
Disfavored No More
Recent developments show that Medicare Advantage has more bipartisan support than the Affordable Care Act marketplace and is less susceptible to political intrigues. However, this was not always the case. Not too long ago, Medicare Advantage was considered a “privatization of Medicare,” and insurance companies were accused of making a profit off the Medicare program. In February 2013, federal officials announced a 2.2 percent cut to Medicare Advantage reimbursement. The political attacks on Medicare Advantage were not well received by the Medicare Advantage-enrolled seniors who vocally began to defend their beleaguered program. The patients began a campaign of communication to members of Congress, touting the benefits of engaged Medicare Advantage health care providers and health-related initiatives, such as fitness and nutrition counseling. This caught the skeptics between a rock and a hard place. Some members of Congress were torn because while they wanted to end the program, they could not do so because their senior constituents love it. After significant grassroots lobbying, coalition building, and industry efforts, the proposed 2.2 percent reduction was transformed into a minor increase by April 2013. This turnaround was primarily due to patient and provider advocacy with the campaign of communication resulting in letters from thousands of seniors to Congress, asking for protection of “their” Medicare Advantage program. Medicare Advantage went from a political pariah to a bipartisan tolerated program within a few years.
Medicare Advantage Is Here to Stay
Fast forward to 2018; Medicare Advantage is marketed as an innovative health care option that will provide more choices and lower premiums. The Trump administration is providing greater flexibility to companies offering benefits in MA Plans. Medicare Advantage is expanding beyond the retiree states of Florida, Arizona, and California with significant inroads in all 50 states. The growth has caught the eye of innovative health care investors, and market consolidation has produced larger plans with stronger infrastructure, including captive staff-model delivery systems. Medicare Advantage continues to grow with 33 percent of Medicare-eligible beneficiaries currently enrolled in MA Plans.
Significant opportunities exist for companies that already possess sophisticated data analytics and coordinated care systems. Notably, one such player, Clover Health, announced on August 27, 2018, that it will also be launching MA Plans in six new markets in 2019. Clover Health is a San Francisco-based startup that uses data analytics and artificial intelligence to deliver health care. Currently, Clover Health provides services for 30,000 seniors and others eligible for Medicare in parts of Georgia, New Jersey, Pennsylvania, and Texas. Only time will tell how successful startups, such as Clover Health, will be in the Medicare Advantage marketplace. However, this investment is one indicator that, despite the rhetoric around health care in America, Medicare Advantage is here to stay.
Succeeding in the highly competitive Medicare Advantage (MA) market requires more than just a sense that there are financial gains to be had in this growing health insurance segment.
Payers that wish to reap some of the many financial rewards of becoming an MA plan sponsor also need to deliver impeccable services to consumers, both in the clinic and at the help desk.
The Medicare Advantage Star Rating system is the most visible mark of success with the challenges of improving experiences, delivering quality care, and improving long-term outcomes for vulnerable beneficiaries.
Health plans that do not achieve the coveted five-star rating for their services risk falling behind the pack in an increasingly crowded field of offerings.
Julie Wright, Chief Medical Officer for Dean Plan Health, knows that hitting the five-star goal isn’t easy. It’s even harder to do in the first year of operating a new Medicare Advantage offering.
“We really wanted to go in shooting for five stars — adhering the right compliance and regulatory arrangements and making sure we knew exactly how to be successful within each Medicare Advantage area,” Wright said. “That also included building a growth strategy in order to scale our MA capabilities. A five-star entry was very intentional.”
Dean Health Plan also provides original Medicare products and services, but saw Medicare Advantage as an opportunity to improve quality and choice for its Medicare members.
“The most important decision-making factor for entering Medicare Advantage is to determine how this product aligns with an organization’s goal to provide superior services and high-quality outcomes for its membership,” Wright said. “Payers should ask themselves how they can help to expand those offerings and opportunities for beneficiaries.”
When Dean Health Plan launched its first MA option in 2017, the organization started by asking itself those very questions and preparing carefully for both short-term and long-term success. Health plans need as much information about their internal readiness as they do about the market they will be entering, Wright said. Before launching a new product, an MA plan should gather as much performance data and financial data as possible from each department, she said. The information allows a health plan to determine where a plan can succeed and what aspects of its operations may require attention.
“The MA entry was a health plan-wide initiation of a brand-new product line. And that's not something to undertake lightly,” Wright said. “We wanted to make sure that we could develop that, do it well, scale it, and grow it in a way that would align with our members’ needs. And we also wanted to evaluate if we could perform well for our members and employer groups.”
Collecting this data allowed Dean Health Plan to make an informed decision about whether the time was right to enter the Medicare Advantage market, and how to position its offerings to meet each of the MA Star Ratings criteria.
“We went through and evaluated our service capabilities compared to what each star measurement category asks for,” Wright said. “It took careful evaluation to determine where the best opportunities are to achieve high star ratings and be successful.”
“We then performed some analysis about which stakeholder would ‘own’ those different areas,” she continued. “We evaluated if a certain performance measure would require management from within the health plan or if a provider would be responsible. Then we started to link the responsible stakeholders to each measure.”
The payer also paid close attention to the compliance and regulatory requirements that form a core part of developing a new plan offering.
“This is absolutely one of the critical things a new Medicare Advantage plan has to prepare for,” Wright emphasized. “The preparation for the rigor, discipline, planning, and oversight for all of the compliance and regulatory aspects is critical. I cannot underestimate how important that is.”
“Our health plan had real strengths after planning around compliance and making sure that the plan reported on the right measures, she continued. “We ensured that we were compliant in every single step that we had to be, to honor our obligations both to CMS and to our members.”
Steering committees constantly monitor the quality and performance of each program, she added.
The plan leverages an extensive physician network of 2400 providers, 28 hospitals and 187 primary care sites to provide services such as embedded pharmacy programs, chronic disease management services for MA, and beneficiary engagement programs. The steering committees ensure that the programs within the network are geared towards achieving a five-star rating
“Steering teams, provider collaboration, constant oversight, and continuous monitoring of our MA programs drove our overall results,” Wright said.
Dean Health Plan boasts five-star ratings for diabetes care, care coordination, healthcare quality rating, beneficiary healthcare access, and medication adherence. Wright attributes the success to effective collaboration and the benefits of health IT.
Dean Health Plan’s quality department is largely responsible for making sure that beneficiaries not only had high-quality care, but also have quick access to healthcare services. The quality department assesses opportunities for clinical care providers to improve quality. Health IT systems help to organize and report on care management data.
“It’s very important that we have a close working relationship between our quality department here at the health plan and our contracted providers,” Wright said. “The quality department also ensured that care coordination teams knew exactly what services a patient needed as the beneficiary received care.”
Dean Health Plan currently offers five Medicare Advantage health maintenance organization (HMO) plans and six supplemental benefits for MA beneficiaries. Wright is hopeful that Dean Health Plan will expand its MA business segments beyond its current offerings with new health plan types and additional benefits that focus on quality.
A federal judge on Friday provided a big win for the health insurance industry, ruling that a Centers for Medicare & Medicaid Services final rule on overpayments was fundamentally unfair.
In a 30-page ruling that vacated the Medicare Advantage 2014 Overpayment Rule, U.S. District Judge Rosemary Collyer sided with UnitedHealth Group and said the final rule "will inevitably fail to satisfy the statutory mandate of actuarial equivalence."
Stephanie Trunk, healthcare cractice co-leader at Arent Fox, based in Washington, D.C., explained the ramifications of the ruling in an email exchange with HealthLeaders.
1. How will this ruling change the way health insurers do business?
Trunk: The ruling essentially invalidates CMS's 2014 final rule implementing the 60-day overpayment return requirement in the Affordable Care Act. Medicare Advantage Plan sponsors—such as UnitedHealth—still must comply with the ACA requirement to report and return any overpayment "after reconciliation" within 60 days after the date on which the overpayment was identified.
2. What were the factors that led to a favorable ruling for UnitedHealth?
Trunk: The court concluded that CMS's 2014 final rule implementing the 60-day overpayment requirement violated the Administrative Procedures Act because (1) it was contrary to the statutory requirement of actuarial equivalence between traditional Medicare and Medicare Advantage, and (2) the intent standard associated with "identifying" an overpayment in the final rule—when it has determined or should determine through reasonable diligence—adopted in the final rule was not as proposed in the proposed rule and heightened in comparison to the statute—actual knowledge of the existence of the overpayment or acts in reckless disregard or ignorance of the overpayment.
3. How could the government respond to this ruling?
Trunk: One can only speculate. CMS can appeal or they could initiate new notice and comment rulemaking with a new proposed rule to implement the a 60-day overpayment requirement.
4. How could the federal government adjust the final rule to make it comply with statute?
Trunk: CMS needs to move away from tying overpayments to Medicare Advantage plans to diagnosis codes, which is not the basis for overpayments in traditional Medicare. In addition, CMS needs to align the definition of "identify" in the rulemaking to the statute and ensure what is included in the proposed rule is not altered in the final rule.
5. What other effects do you see this ruling having?
Trunk: The ruling could have a direct impact on the intervened False Claim Act case United States ex rel. Benjamin Poehling v. UnitedHealth Group, Inc et al., Case No. CV 16-08697 (USDC, CD CA) pending in California.
The basis for the case is that UnitedHealth failed to return identified overpayments as required by the ACA, as it failed to delete invalidate diagnosis codes and return the risk adjustments associated with higher value, invalid diagnosis codes. This is based on the interpretation of the ACA overpayment obligation in the 2014 final rule, which the court invalidated.
Starting in 2019, Medicare Advantage plans will have the flexibility to target non-medical health-related services to members who have chronic care conditions. MA insurers will be able to target supplemental services such as minor home modifications to help accommodate walkers or wheelchairs, or home-delivered meals that are lower in salt or sugar for those with diabetes or chronic heart failure. How the supplemental benefits are implemented depends on policies issued by the Centers for Medicare and Medicaid Services.
This is expected around December, when CMS sets rates for MA plans, according to the Bipartisan Policy Center, which has issued its own recommendations. The supplemental benefits for chronic care conditions are part of the Bipartisan Budget Act of 2018, which was signed into law by President Trump in February. It allows Medicare Advantage plans to provide additional or supplemental services to those with complex care needs and to provide access to non-medical health-related benefits, including those that have proved successful in keeping patients in their homes. Medicare does not support these non-medical benefits, said Bill Hoagland, senior vice president, BPC.
About a third of all Medicare beneficiaries are in a MA plan. These plans are popular with both those who sign up due to the additional benefits they offer, and with insurers that have realized profits and decreased costs through narrow networks and aligned incentives. MA insurers recently got a boost from CMS when the agency said it would allow these plans to cross negotiate between Part B and D drugs to choose the least expensive alternative.
MA also outperforms traditional Medicare for the chronically ill, a study shows.
The Bipartisan Policy Center is concentrating on three areas in recommendations to CMS to implement the chronic care provisions of the law. The first is in striking a balance of flexibility for plans to offer supplemental benefits such as transportation, meals and minor home modifications, and guidelines so plans feel comfortable offering the services without fear of audits or sanctions. The second is in the implementation of new requirements to integrate Medicare and Medicaid dual eligibles. The third is around the grievances and appeals procedures. CMS has already begun gathering input for the implementation of a unified grievance and appeals process, the BPC said.
In MA plans, claims are paid while they are in dispute but this is not the case in traditional Medicare, according to Katherine Hayes, director of Health Policy for BPC.
New York and Minnesota have already integrated appeals process, she said. The law allows a shift from what is covered to what patients and their families need, Hayes said. Barriers to adoption include the current requirement that MA plans offer existing uniform benefits to all enrollees. CMS should allow plans the flexibility to determine supplemental benefits, BPC said.
Also, CMS needs to ensure insurers will not use supplemental benefits to avoid high risk members through plan marketing.
Medicare beneficiaries with four or more chronic conditions account for 90 percent of Medicare hospital readmissions and 74 percent of overall Medicare spending, according to the BPC. The number of older Americans will double by 2050. Recent Health Affairs study shows connection between meal supports and lower healthcare costs, from $843 per month compared to $1,413 for those without receiving meals specialized to meet needs of diabetes, hypertension, and other conditions. The study also showed fewer hospital admissions and trips to the ER.
Walmart is establishing closer ties with seniors covered by Medicare Advantage plans, an increasingly popular health plan choice for millions of U.S. seniors and where Amazon isn’t yet a player.
The latest example of Walmart’s interest in the MA market came this week with the announcement of a program with Anthem, operator of Blue Cross and Blue Shield plans in 14 states. Effective in January 2019, Anthem’s Medicare Advantage plan enrollees can use the insurer’s “over-the-counter plan allowances” to buy OTC medications and personal healthcare items like “first aid supplies, support braces and pain relievers.”
Medicare Advantage plans tend to offer cheaper medical care and related healthcare products than someone would pay a retailer or out-of-pocket. Seniors will also be inundated with information from the health plan about products and services from Walmart, which operates more than 4,700 stores and the walmart.com website.
“For Walmart, the partnership extends its move upstream to influence where drugs and medical supplies are purchased,” L.E.K Consulting’s Andrew Kadar said of the retailer's program with Anthem. “Roughly 40% of OTC drugs are used by people older than 65 years of age (and) 35% of those seniors are currently enrolled in a Medicare Advantage plan and another 42% have a stand-alone Medicare Part D plan.”
Alphabet invests $375 million in Oscaraxios.comOscar is jumping into Medicare Advantage in 2020.
Google's parent company, Alphabet, is investing $375 million in health insurance startup Oscar just months after Oscar raised a separate $165 million cash injection. The new round leaves Oscar at a rough $3 billion valuation, per Wired.
The big picture: Oscar will use the money on technology and to expand into Medicare Advantage, which the company previewed with a job posting last year. But entering a new line of health insurance likely means losses will continue for the foreseeable future.
By the numbers: Oscar sells health plans in the Affordable Care Act marketplaces (for people who don't get insurance through a job) and for small employers. So far, the company has lost a lot of money:
The intrigue: Oscar entering Medicare Advantage in 2020. It's the profitable, growing, privatized version of traditional Medicare. It also has closed, narrow networks of hospitals and doctors instead of traditional Medicare's open network.