Insights & Resources

The rapid and sustained growth of managed care since 2007 has transformed how the government pays for and covers health care for approximately 100 million enrollees.  In response to this shift, U.S. Department of Health and Human Services, Office of Inspector General (OIG) recently designated oversight of managed care as a “priority area”, and developed a coordinated strategic plan (the Plan) to better align its audits, evaluations, investigations, and enforcement of managed care. 
 
The Plan is designed to:
 

• promote access to care for those enrolled in managed care;
• provide comprehensive financial oversight; and
• promote data accuracy and encourage data-driven decisions.

 
According to OIG, achieving these goals requires a strategy of:
 

• conducting rigorous oversight of managed care plans;
• simultaneously partnering with these same plans by providing a framework for managed care to assess its own risks; and
• identifying potential OIG work to address those risks. 

 
The strategic plan further emphasizes OIG’s willingness to hold Medicare Advantage organizations (MAOs) and managed care organizations (MCOs) accountable for their respective roles in combatting fraud, waste, and abuse.  
 
The Plan uses a four-phase managed care “life cycle” to identify risk areas and vulnerabilities, as well as to promote effective oversight.  Each phase in the life cycle has its own unique risks and vulnerabilities as shown below: 
  

• Plan Establishment and Contracting: OIG perceives risk to a plan’s financial solvency or its ability to provide adequate care when a plan provides inaccurate information or fails to adhere to the terms of a contract that is being established or renewed.  OIG focus areas in this phase may include: review of contracts with the state or Centers for Medicare & Medicaid Services (CMS), plan benefit design, establishment of plan service area, and accuracy and integrity of plan bids.

 

• Enrollment: OIG perceives risk when aggressive marketing plans are used to attract enrollees.  OIG focus areas in this phase may include: marketing, agent or broker activities, eligibility determinations, and accuracy and use of enrollment data.

 

• Payment: OIG perceives risk associated with capitation payments to plans, including those based on risk adjustment, because plans may misreport the health status of their enrollees to make them appear sicker to receive higher payments.  OIG focus areas in this phase may include: risk adjustment, payment accuracy, medical loss ratio, value-based care or other alternative payment mechanisms used by plans, states, and CMS under the managed care programs, and providers who engage in fee-for-service Medicare and Medicaid fraud that also provide services in managed care networks.

 

• Services to People: OIG perceives risk when plans impose barriers that prevent enrollees from accessing services in order to reduce plan medical costs and increase revenue.  OIG focus areas in this phase may include: network adequacy, ineligible or untrustworthy providers, coverage determinations, whether enrollees are receiving care that meets clinical guidelines, fraud schemes that cross multiple plans and/or Federal health care programs, and the funding and use of non-traditional benefits.

 
The Plan signals OIG’s increased scrutiny of MAOs, MCOs, and their respective managed care plans.  The Plan also presents an opportunity for MAOs and MCOs to enhance their compliance programs to identify and correct vulnerabilities and to take proactive steps to reduce the risk of fraud, waste, and abuse.
 
A complete copy of the Plan, along with other managed care resources, is available at: https://oig.hhs.gov/reports-and-publications/featured-topics/managed-care/?hero=managed-care-ft
 
Should you have any questions regarding the above, please contact the authors, the Garfunkel Wild attorney with whom you regularly work, or contact us at info@garfunkelwild.com.