OIG Enhanced Review_ OIG to Examine the Life Cycle of Managed Care Contracts

In August 2023, the Workplace of Inspector Common for the Division of Well being and Human Providers (OIG) introduced a brand new strategic plan to analyze the life cycle of Medicare Benefit and Medicaid managed care contracts from inception by means of enrollment, reimbursement, providers, and renewal. OIG’s plan is meant to handle fraud, waste, and abuse threat, with a said aim of holding Medicare Benefit organizations (MAOs) and Medicaid managed care organizations (MCOs) accountable. Whereas scrutinizing MAO and MCO contracts on the one hand, OIG intends to associate with MAOs and MCOs then again to handle well being fraud schemes that hurt each the federal government and personal insurers. OIG’s strategic plan will usher in a brand new wave of managed care audits for which MAO and MCO audit response groups ought to put together, and will foreshadow audits for entities outdoors of managed care whose contracts fall inside OIG’s purview.

Contracting, Enrollment, Cost, and Provision of Providers

To supervise the federal authorities’s practically $700 billion 2022 spending on managed care packages—which cowl greater than half of Medicare enrollees and greater than 80% of Medicaid enrollees—OIG has outlined 4 phases of managed care that it intends to analyze: (1) plan institution and contracting, (2) enrollment, (3) fee, and (4) provision of providers. Every section, in keeping with OIG, presents distinctive dangers and vulnerabilities, which Carolyn Kapustij, senior advisor for managed care within the OIG Workplace of Audit Providers, elaborated on in a September 2023 interview.[1]

Within the first section, OIG intends to assessment actions that happen when the Facilities for Medicare & Medicaid Providers (CMS) or states initially set up or renew managed care contracts. In Medicare Benefit, CMS contracts with MAOs that present healthcare protection to enrollees in change for month-to-month capitated funds from CMS. These month-to-month funds are supposed to approximate the anticipated price of healthcare within the relevant plan 12 months in keeping with every enrollee’s “threat rating,” which is predicated on the enrollee’s demographics and well being circumstances. CMS typically reimburses MAOs at a better charge for insuring members with increased threat scores. In Medicaid, states contract with MCOs to make providers out there to Medicaid enrollees. In its contract assessment section, OIG will consider whether or not MAOs and MCOs are offering the federal government with correct info, together with of their bids, and abiding by the contract phrases for his or her plan design, service choices, and protection space.

Within the second section, OIG will assessment enrollment processes—particularly specializing in doubtlessly aggressive advertising campaigns and inaccurate info assortment. On the advertising entrance, OIG will assessment whether or not Medicare Benefit plans are disseminating deceptive or incorrect info to encourage enrollment. On the knowledge assortment entrance, OIG acknowledges that transmitting inaccurate eligibility and demographic info throughout enrollment dangers incorrect funds sooner or later.

Within the third section, OIG will monitor CMS and state funds to plans, in addition to plan funds to suppliers, with a watch on threat adjustment. OIG is worried that plans receiving risk-adjusted funds (and, presumably, suppliers in risk-sharing preparations with plans) could also be incentivized to make enrollees seem sicker than they’re to obtain increased authorities reimbursement. OIG seems intent on finding out funds from plans to suppliers even the place they don’t pose direct monetary threat to the federal government as a result of, in keeping with OIG, there stays threat that, absent correction, doubtlessly improper prices finally would possibly cross to Medicare and Medicaid in future years. OIG pledges to proceed investigating suppliers that pose fraud threat in a single program—e.g., fee-for-service Medicare and Medicaid—throughout different packages through which they render providers (e.g., Medicare Benefit).

Within the fourth section, OIG will examine enrollees’ entry to high quality well being providers, with a watch towards completely different fee fashions that set off completely different incentives amongst managed care plans. For example, OIG raises a priority that plans with capitated risk-adjusted fee fashions might erect boundaries to care to cut back plan medical prices. OIG acknowledges that program safeguards exist to curb such behaviors—like medical loss ratios, which require not less than 80% or 85% of premium {dollars} be spent on medical care (or else personal insurers should situation rebates)—however notes that dangers stay, warranting extra oversight. In analyzing entry to providers, OIG will give attention to supplier community adequacy, ineligible or untrustworthy suppliers, protection determinations, care that meets scientific tips, and fraud schemes that cross a number of plans and/or federal healthcare packages.

OIG Oversight Targets

OIG hopes that its oversight plan will obtain three core objectives: (1) promote entry to protected, efficient, and equitable healthcare, together with psychological well being providers; (2) enhancepayment accuracy and fraud prevention by means of complete monetary oversight of funds to Medicare Benefit and Medicaid plans; and (3) enhance information accuracy and encourage data-driven selections by means of well timed and correct information assortment and reporting. Showcasing that its strategic plan already is below manner, OIG notes its prior work in every space.

Entry to High quality Care

OIG discovered that sure Medicaid MCOs denied one out of each eight requests for prior authorization, and states had restricted oversight over MCO prior authorization denials. In an April 2022 Medicare Benefit audit report, OIG decided that of the 250 prior authorization requests throughout a number of Medicare Benefit plans that it reviewed, 13% have been denied for providers that met Medicare protection guidelines (that’s, would have been lined below conventional Medicare). Along with OIG’s efforts, OIG senior advisor Kapustii famous in her September 2023 interview that CMS issued a closing rule to streamline the prior authorization course of in Medicare Benefit,[2] and Congress has been proposing laws geared toward lowering prior authorization delays and denials throughout managed care.[3]

Cost Accuracy and Fraud Prevention

In Medicare Benefit, OIG notes that it has performed audits of well being plans to validate risk-adjusted funds made by CMS—as of August 2023, OIG has labeled as potential “overpayments” roughly $377 million. As OIG’s Kapustii defined, one focus of those audits was on so-called high-risk diagnoses which might be “particularly inclined for error,” with OIG discovering “throughout the board” that 69% of such diagnoses lacked ample medical file substantiation. OIG additionally has examined the usage of chart opinions and well being threat assessments, the place sure diagnoses have been submitted from chart opinions and well being threat assessments with out corresponding care providers associated to these circumstances. For OIG’s Kapustii, this discovering raises considerations round what well being plans could also be “doing to offer providers for these beneficiaries.” In Medicaid, OIG has evaluated the oversight and integrity of managed care plans’ reported medical loss ratios to find out whether or not managed care plans are directing acceptable funding towards affected person care.

Knowledge Accuracy and Knowledge-Pushed Choices

OIG emphasizes the significance of full, correct, and well timed information for fee integrity and healthcare high quality, noting that analyzing full, near-real-time information illuminates rising dangers. In Medicare Benefit, OIG has flagged the dearth of supplier identifiers in Medicare Benefit encounter information as a barrier to offering sturdy oversight. In Medicaid, OIG audits of Medicaid enrollment information discovered that states made roughly $1 billion per 12 months in questionable funds for concurrent enrollment in two completely different states or in two completely different MCOs and issued greater than $170 million in funds after enrollees’ deaths.


OIG’s strategic plan alerts extra audits for the Medicare Benefit, conventional Medicare, and Medicaid managed care plan neighborhood. OIG acknowledges its personal useful resource constraints in executing this plan, with Kapustii stating that whereas the strategic plan is a “precedence,” OIG is “nonetheless working by means of” easy methods to deploy its assets, as a result of its price range “solely get[s] two cents to supervise each $100 which might be spent on HHS packages.” In consequence, OIG might search to streamline its audit processes by means of digital or shorter audits, which might threat faster adversarial findings. Accordingly, vetting present compliance infrastructure across the points in OIG’s strategic plan, growing an audit readiness guidelines, evaluating documentation availability, and advising key stakeholders of OIG’s newest focus areas might not less than easy the trail for these managed care plans whose contracts OIG selects for assessment. And this new spate of audits could also be an instructive foreshadowing to authorities contractors outdoors of managed care.

[ ] See Federal Information Community, The Well being and Human Providers inspector common takes on a $400B program, Sept. 19, 2023, out there at https://federalnewsnetwork.com/agency-oversight/2023/09/the-health-and-human-services-inspector-general-takes-on-a-400b-program/.

[2] See Medicare Program; Contract 12 months 2024 Coverage and Technical Modifications to the Medicare Benefit Program, Medicare Prescription Drug Profit Program, Medicare Price Plan Program, and Packages of All-Inclusive Take care of the Aged, 88 Fed. Reg. 22120 (pub. Apr. 12, 2023; eff. June 5, 2023).

[3] See Kerry Dooley Younger, Prior Authorization Reform Invoice Advances in Congress, however Battle Looms, Medscape (Aug. 3, 2023), out there at https://www.medscape.com/viewarticle/995133.