Risk Adjustment Data Validation (RADV) Audits Just Got Real

Last night the second-largest Medicare Advantage plan in the country, Humana, filed an SEC document detailing a US Department of Justice investigation into the company’s risk adjustment coding and data collection practices.  The investigation is an extension of a 2010 physician-led whistleblower action under the False Claims Act.  The company has over 3.2 million Medicare Advantage members.

For years CMS has struggled to define the process and methodology it would use to pursue payment recoveries from Medicare Advantage plans which were overpaid under risk adjustment.  In 2012 it finalized its process and launched its first round of RADV audits, on a parallel track with those being conducted by the Office of Inspector General at the Department of Health and Human Services.

The Justice Department’s involvement in the Humana audit would appear to indicate the review is in the advanced stages and has been underway for some time.  The methodology assures an extrapolated repayment to the Federal government for unsubstantiated codes submitted for risk adjustment.  That this action also comes in connection with the False Claims Act and a qui tam whistleblower action could signal serious trouble for the insurance giant.

RADV just got real.

This blog was originally posted on blog.gormanhealthgroup.com.
John Gorman: Under John’s leadership, Gorman Health Group has become the leading professional services and solutions firm for government-sponsored health care, providing thought leadership and expert strategic, operational, and technology-based solutions. Read more.