The growing trend towards value-based care leads to increased opportunities for Fraud, Waste, and Abuse.
Our healthcare landscape continues to rapidly shift from fee-for-service to value-based care (VBC). The Center for Medicare and Medicaid Innovation wants to accelerate healthcare reform through VBC models with a stated goal of all Medicare beneficiaries with Parts A and B being in a care relationship with accountability by 2030 and the vast majority of Medicaid beneficiaries being in a care relationship with accountability by 2030. The most common types of alternative payment arrangements are bundled payments, pay-for-performance, and shared savings.
Medicare Advantage is one of the most recognized value-based care models. The growth in popularity of this program has gained attention from CMS, OIG, and DOJ. Late last year, OIG released A Special Fraud Alert for questionable marketing practices by Medicare Advantage plans. Special Fraud Alert: Suspect Payments in Marketing Arrangements Related to Medicare. These deceptive marketing practices result in beneficiaries being enrolled in plans that don’t meet their needs, overpayments, and the possibility of kickbacks. In addition to more attention from federal regulators, the transition from V24 to V28 is complete as of 2025. This model change includes the removal of 2294 diagnosis codes that were in the V24 model. Medicare saw these conditions as not accurately predicting cost or not having well-specified diagnostic coding criteria. The V28 model has diagnosis codes that predict higher costs. There are still significant discrepancies between FFS and Risk Adjustment, which contributes to the scrutiny of value-based care. We are seeing more record-breaking settlements in whistleblower cases, increased OIG audits targeting specific diagnoses that health plans submitted to CMS, and the possibility of extrapolating for payment year 2018 and after. Ensuring the integrity of your Medicare Advantage program will be more critical than ever.
As participation in these value-based care arrangements increases, so do the opportunities for fraud, waste, and abuse schemes to grow in this space. Unlike fee-for-service, which pays providers for each service provided, value-based care diagnosis codes typically drive payment. These programs aim to prevent and/or manage chronic conditions, reduce costs, and improve patient experience and engagement. To be successful, organizations need to accurately report the severity of illness of their members/patients and the quality of care provided. Identifying FWA in VBC is not as straightforward as it is in FFS, as it requires more sophisticated data analytics and reporting. As we move quickly down the path of healthcare delivery reform, what areas continue to present challenges to your organization?
References:
The CMS Innovation Center’s Transformation Initiative At-a-Glance. www.cms.gov/files/document/transformation-initiative-2pager-aag.pdf. Accessed 4 Mar. 2025
