Priority Health Overpayment Audit The Health and Human Services (HHS) Office of the Inspector General (OIG) says Priority Health may have collected at least $4.4 million in Medicare Advantage (MA) overpayments throughout 2018 and 2019. The targeted audit focused on ten high-risk diagnosis groups. Auditors found medical records did not back diagnosis codes across 252 of 300 sampled enrollee-years, prompting $828,010 in net MA overpayments — an 84% error rate. OIG says many codes were for a previous diagnosis that was no longer active. #medicareadvantage #radv #riskadjustment #overpayments https://www.beckerspayer.com/legal/priority-health-estimated-to-have-received-4-4m-in-overpayments-audit/ Wakely Details LEAD A great Wakely Consulting white paper detailing the ACO LEAD model, which will succeed ACO Reach and run from 2027–2036. LEAD will eliminate rebasing (locking in base years), expand capitation and specialist risk-sharing, integrate high-needs populations into a unified ACO structure, and offer more flexible alignment mechanisms. Benchmarking and value-based care incentives also evolve along while strengthening quality incentives

CMS Understood Rate Impact on MA More evidence that the Centers for Medicare and Medicaid Services (CMS) understood the potential impact of a zero-rate hike on Medicare Advantage (MA) benefits and cutbacks in 2027. The agency raised the rate hike to about 2.5% by amending its proposal for more aggressive risk adjustment and v28 model changes. This means payments will move from basically a zero increase to $13 billion, just over half of what 2026 will see. CMS clearly listened to plan complaints about the proposed model changes. Plans argued cost recognition would not be correct if the model were adopted. CMS could still adopt this in the future. And as I noted, most plans will see more than 2.5% because the unlinked chart change that was adopted hits big plans much more given their risk adjustment practices. Experts say UnitedHealthcare faces a $5 billion reduction and Humana $2 billion. Still,

Insurers Say PA Reforms Taking Hold The two main insurer trade groups say definitive progress is being made to implement voluntarily agreed-upon prior authorization (PA) reforms. AHIP and the Blue Cross Blue Shield Association released a report that found leading health plans reduced prior authorizations for an array of services by 11% since the pledge was made. This equates to 6.5 million fewer prior auth requests for patients. Reductions in Medicare Advantage were 15%. The insurers say that PAs were removed where there were clear clinical guidelines and consistent utilization trends for providers. The groups say insurers have introduced more consumer-friendly language and appeals steps. About 50 plans signed on to the initiative, including all six of the largest, publicly traded plans. #priorauthorization #healthplans https://www.fiercehealthcare.com/payers/insurers-have-eliminated-11-prior-authorizations-under-reform-pledge Wakely’s BALANCEd Assessment Wakely released a great analysis on what health plans need to consider if they join the BALANCE model, which would bring GLP-1 coverage

2027 Final Rates Out! A Modest Increase Added The Centers for Medicare and Medicaid Services (CMS) released its Final Announcement for calendar year (CY) 2027 rates for Medicare Advantage (MA). I had predicted that rates would end up between 2% and 3% as the Effective Growth Rate (EGR) would increase markedly between the advance and final notices. The EGR rate actually did not increase much — 0.36%. But rates before risk score trends will go up by 2.48% (vs. 0.09%) because CMS will not implement further changes to the v28 risk model for CY 2027. In its advance notice, CMS proposed to update the Part C risk adjustment model using more recent underlying original Medicare data (updated from 2018 diagnoses and 2019 expenditures to 2023 diagnoses and 2024 expenditures). This would recognize more current costs. Instead, for CY 2027, CMS will continue to use the 2024 MA risk adjustment model which

White House Wants To Reduce HHS Budget In a long-delayed budget blueprint for federal fiscal year 2027, the White House is asking Congress for a $15.8 billion discretionary budget cut for the Department of Health and Human Services, which is 12.5% lower than this year and eliminates many programs. Major reorganizations are again proposed. A major change would be the move of the growing 340B program to the Centers for Medicare and Medicaid Services (CMS). That is a fair change given the out-of-control nature of the program and the nexus to government program payments at CMS. A new agency, the Administration for a Healthy America, would be established and oversee health priorities currently managed by multiple agencies. That, too, is not a bad idea and should be considered. The administration says the cuts will eliminate “bloated, woke and inefficient programs” and refocus on core priorities. But Senate Appropriations Chair Susan

CMS Finalizes 2027 MA And Part D Rule The Centers for Medicare and Medicaid Services (CMS) finalized the 2027 Medicare Advantage (MA) and Part D rule. Next week, I will publish a detailed blog on the changes between the draft and final rules. The major Star ratings changes were adopted, including the cancellation of the Excellent Health Outcomes for All (EHO4all) reward while maintaining the Reward Factor as well as the sunset of numerous measures. All of the proposed measure terminations were adopted except the Diabetic Eye Exam measure was maintained. Depression Screening will also be added. Most changes occur in Star Year 2029. In other news, CMS announced Maximus will no longer be the Part C Independent Review Entity (IRE). C2C will take over, which also is the Part D IRE. Additional articles: https://www.beckershospitalreview.com/legal-regulatory-issues/cms-finalizes-2027-medicare-advantage-and-part-d-rule-10-notes/ and https://www.beckerspayer.com/payer/medicare-advantage/cms-awards-ma-independent-review-contract-to-new-vendor/ and https://www.cms.gov/newsroom/fact-sheets/contract-year-2027-medicare-advantage-part-d-final-rule (Some articles may require a subscription.) #medicareadvantage #stars #quality #cms https://www.modernhealthcare.com/politics-regulation/mh-cms-medicare-advantage-star-ratings-2027