What if CMS disagrees with a Medicare plan's risk billing?

Officials at the Centers for Medicare & Medicaid Services (CMS) want to set up a formal system for handling disputes with private insurers about what it sees as payment data errors. CMS would use a new “payment offset” system to resolve conflicts with issuers of Medicare Advantage plans and Medicare Part D prescription drug plans.

Today, CMS sends Medicare Advantage issuers cash up front through a risk score program. The program compensates issuers for covering high-risk enrollees.

The issuers are supposed to reconcile the actual cost of covering the enrollees with the projected cost and pay any extra cash received back to CMS.

CMS sends cash to Medicare drug plan issuers up front in connection with a reinsurance program, a risk-sharing program and two subsidy programs. Like Medicare Advantage issuers, drug plan issuers are supposed to help CMS reconcile projected costs with actual costs and send back any extra cash back to CMS.

When CMS tells issuers about reconciliation errors, they usually fix the errors, officials say in a discussion of the payment offset proposal, which starts on page 578 in a large batch of draft CMS regulations.