The Health Law Ticker

With the tremendous growth of managed care over the last several years, the Medicare and Medicaid programs have had to transform how they fund health care for approximately 100 million enrollees. According to the Department of Health & Human Services’ Office of Inspector General (OIG), 2022 saw half of Medicare enrollees receive coverage through Medicare Advantage plans. As a result, government spending on Medicare Advantage was $403B, or about 50% of all Medicare funds. Similarly, 81% of current Medicaid enrollees receive some component of their coverage through managed care.

Because of these upward trends in managed care resulting in increased enrollment and government expenditures, OIG, which is tasked with protecting the integrity of the HHS programs, is focusing now more than ever on managed care.

OIG performs audits, investigations, and inspections nationwide and, for managed care, provides oversight to ensure that managed care programs fully achieve the goal of providing high-quality care in an efficient way.

On August 28, 2023, OIG released a new coordinated plan for managed care oversight that establishes a specific framework to assess risks and provide a framework for how OIG will endeavor to address those risks. Understanding this coordinated plan is crucial for managed care plans so they can be prepared for what the upcoming changes to compliance requirements mean to operations.

The Coordinated Plan’s Three Goals

The coordinated plan includes three underlying goals for OIG’s managed care work: (1) promote access to care for people enrolled in managed care; (2) provide comprehensive financial oversight; and (3) promote data accuracy and encourage data-driven decisions

By stating these goals and describing them in detail, OIG is informing managed care plans of what and how they are going to focus on in their oversight.

1. Promote access to care for people enrolled in managed care.

OIG wants to ensure that managed care plans provide enrollees with access to health care services, including mental health services. Importantly, OIG notes that “access” encompasses not only availability of services but also timeliness of care. The OIG believes that harmful delays in care can result from wait times to get an appointment and lengthy prior authorization processes. 

Second, OIG wants to ensure that care provided to people enrolled in managed care is “safe, effective, and equitable.” To meet this goal, OIG notes that it will focus on examining plan efforts to reduce racial and ethnic disparities in health outcomes among their enrollees.

2. Provide comprehensive financial oversight.

OIG’s second goal is to “ensure that payments to Medicare Advantage and Medicaid plans are accurate.” This involves identifying and preventing fraud in managed care plans.

Specifically, OIG is “expanding its engagement with plans and their special investigation units, in coordination with our Federal and State law enforcement partners.” Moving forward OIG wants to focus on enhancing plan capabilities in preventing and detecting fraud because plans are in the best position to identify it.

With this goal, it appears OIG is hoping to improve collaboration with plans to increase referrals of potential fraud to law enforcement. Managed care plans should review existing policies and procedures to ensure compliance plans include coordination, as appropriate, with federal and state partners.

3. Promote data accuracy and encourage data-driven decisions.

Finally, OIG will focus on data accuracy, which it notes “safeguards program dollars and quality of care.” Without accurate data, OIG notes, “payments will not be correct and resources may not be appropriately directed.” “It is critical that States, CMS, and plans have accurate data to effectively administer the program and ensure compliance. Data are also a powerful tool to examine health care quality issues.”

It is clear from OIG’s final goal that it will stress managed care plans’ collection and reporting of accurate data, which OIG believes is essential to data-driven decisions. Managed care plans should examine their data tracking and reporting policies and procedures moving forward in order to stay compliant.

The Managed Care Life Cycle

As a tool for meeting their three outlined goals above, OIG developed a “managed care life cycle” to guide oversight and enforcement work. This life cycle provides managed care plans with the context OIG will consider when performing oversight of managed care.

The OIG describes the life cycle of a managed care plan, for purposes of oversight, as fourfold: plan establishment and contracting, enrollment, payment, and provision of services.

The OIG has broken the life cycle into these four phases because it believes each stage raises different risks and vulnerabilities. Through examination of the four phases, we can glean where OIG will focus its oversight.

1. Plan Establishment and Contracting.

The first phase of the life cycle that OIG focuses on deals with activities that occur when the plan is first established or when a contract is renewed. “Focus areas may include review of contracts with the State or CMS, plan benefit design, establishment of plan service area, as well as accuracy and integrity of plan bids.”

Most important to OIG at this phase is Medicare and Medicaid’s operational requirements for plans, such as financial solvency and providing an adequate network. OIG will investigate whether plans are providing inaccurate information related to the operational requirements, or if plans are failing to adhere to the contract. If so, OIG may find that the plan should not be operating or is not providing adequate care for enrollees.

2. Enrollment.

OIG will next focus on enrollment of people into managed care plans. “Focus areas may include marketing, agent or broker activities, eligibility determinations, and accuracy and use of enrollment data.”

OIG is going to, at this stage, determine whether managed care plans are being deceptive in their marketing and enrollment, or providing inaccurate information to Federal programs regarding new enrollees. 

3. Payment.

In this stage of the cycle, OIG will emphasize payments made by CMS and the States to plans, as well as plan payments to providers. “Focus areas may include components such as risk adjustment, payment accuracy, medical loss ratio, and the value-based care or other alternative payment mechanisms used by plans, States, and CMS under the managed care programs.”

OIG understands that there is a risk that managed care plans misreport certain data such as health status of their enrollees to receive higher payments from Federal health care programs. OIG hopes to prevent these types of fraud and maintain the integrity of the system. Managed care plans should continue to track and report medical care-related data as accurately as possible.

4. Provision of Services.

Finally, OIG will focus on whether enrollees have adequate access to high-quality services. “Focus areas may include network adequacy, ineligible or untrustworthy providers, coverage determinations, whether enrollees are receiving care that meets clinical guidelines, and fraud schemes that cross multiple plans and/or Federal health care programs.”

OIG is hoping to stop managed care plans from imposing barriers that prevent enrollees from accessing services to reduce plan medical costs and increase revenue. Further, OIG wants to increase managed care plans provision of non-traditional services such as gym memberships.

Conclusion

OIG has recently announced its goals for oversight of managed care and the context within which it hopes to provide that oversight. Managed care plans will place themselves in a better position for compliance if they understand these goals and how OIG will evaluate the provision of managed care.