OIG Reports: Some Medicare Advantage Companies Leveraged Chart Reviews and Health Risk Assessments to Disproportionately Drive Payments

The Office of Inspector General (OIG) released another Medicare Advantage (MA) report, this time indicating the several Medicare Advantage companies were/are leveraging chart reviews and health risk assessments (HRAs) to drive up MA hierarchical condition category (HCC) diagnosis payments. One certainly can notice that the OIG has been publishing reports on a variety of issues surrounding Medicare Advantage also known as Medicare Part C, risk adjustment (RA) compliance and overpayments regularly this year.

This particular OIG report is titled: “Some Medicare Advantage Companies Leveraged Chart Reviews and Health Risk Assessments to Disproportionately Drive Payments” (OEI-03-17-00474) came from the OIG department of “Evaluations and Inspections”. Across the healthcare industry it is known that there are financial incentives under the MA program for health plan (companies) to make beneficiaries appear as sick as possible, or sicker than they are.

Specific patient encounter information and data is gathered and submitted to Centers for Medicare and Medicaid (CMS) MA encounter data system and the Risk Adjustment Processing System. Important for HIM Coding and Clinical Documentation Integrity (CDI) professionals is that this data includes ICD-10-CM codes. To be valid for payment under RA these diagnoses must come from a face-to-face encounter, documented by the provider, and the encounter must include evaluation, management and/or treatment of that diagnosis (condition). Diagnoses that are not supported by the encounter documentation should not be reported for MA RA payment.

It is recognized that chart reviews and health risk assessment (HRA) are tools used by MA health plans and companies to help improve accurate data capture and improve the MA program. However, as the OIG stated in this report there have been concerns, . . . to maximize risk-adjusted payments, without beneficiaries receiving care for those diagnoses. Unsupported risk-adjusted payments have been a major driver of improper payments in the MA program. This particular OIG report can be accessed via the following link: https://oig.hhs.gov/oei/reports/OEI-03-17-00474.pdf

The OIG looked at 162 MA companies and found that of these 20 companies had a disproportionate share of the 9.2 billion dollars in MA payments reported only from chart reviews and HRAs. In addition, the OIG found that the top 20 companies generated $5.0 billion from chart reviews and HRAs that were the sole source of diagnoses in the encounter data. These 20 companies generated 54 percent of the $9.2 billion in payments from diagnoses submitted solely on chart reviews and HRAs but enrolled only 31 percent of MA beneficiaries.

Retrospective chart reviews are allowed and a common practice across healthcare in many settings and with many different payment models, to identify diagnosis or procedures that were missed when clinical codes were originally submitted. Under MA CMS does require the MA company to link the added diagnosis codes to a specific encounter or date of service which was face to face with the provider, but the OIG raises concerns that the chart reviews are circumventing the face-to-face requirement. The Department of Justice (DOJ) and the Government Accountability Office (GAO) have also raised similar concerns in the past (see: https://www.gao.gov/assets/gao-16-76.pdf).

Using Health Risk Assessments was found to be a primarily strategy to find and submit more diagnoses to increase payments rather than a means to improve the care provided to beneficiaries. It is a common practice for MAO and MA companies to use HRA to obtain diagnoses.

The OIG investigation and analysis indicated that the chart reviews and HRAs drove billions of dollars in the following diagnoses:

  1. Vascular Disease $610M 
  2. Major Depressive, Bipolar and Paranoid Disorders $533M
  3. Diabetes with Chronic Complications $390M
  4. Chronic Obstructive Pulmonary Disease $349M
  5. Morbid Obesity $339M
  6. Congestive Heart Failure $309M
  7. Rheumatoid Arthritis and Inflammatory Connective Tissue Disease $196M
  8. Myasthenia Gravis/Myoneural Diseases/Guillain-Barr Syndrome/Inflammatory and Toxic Neuropathy $156M  
  9. Drug/Alcohol Dependence $135M
  10. Metastatic Cancer and Acute Leukemia $122M
  11. Protein-Calorie Malnutrition $118M
  12. Specified Heart Arrhythmias $112M

Within the 20 MA companies that the OIG looked at there was one (1) that was generating 40 percent or $3.7 billion dollars (out of $9.2 billion) of all payments for diagnoses submitted solely from chart review and HRAs, but this company only had 22 percent of all enrolled MA beneficiaries. The OIG report did not reveal the name of the top 20 companies with a high share of payments. Keep in mind that the OIG conducted this investigation and analysis using 2017 payment amount and using 2016 MA encounter data.

Looking at one’s own MA diagnosis data and conducting comparisons with national norms is always interesting and insightful. Thus, there is no time like the present, as the saying goes. Now is the time to be conducting compliance reviews or audits on your MA encounter and data for accuracy. This means go to the encounter and validating the documentation and coding are complete and accurate. Now is the time to educate providers, clinical coding and CDI professionals on documentation and the ethical practices for MA RA. Talk to your internal and external auditing director and leadership regarding this OIG report and the steps that you and your organization will take to ensure compliance and ethics are first and foremost.

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