The Office of the Inspector General (OIG) of the Department of Health and Human Services (HHS) reported that a study conducted in 2019 revealed, “Unsupported risk adjusted payments are a major driver of improper payments in the Medicare Advantage (MA) program.” The study stems from the OIG’s mission to prevent, detect, and deter fraud, waste, and abuse; hold wrongdoers accountable; and recover misspent public funds.
In 2020, the Department of Justice initiated two lawsuits against Medicare Advantage plans Anthem and Cigna. Although the facts differ between the two, the root is the same: alleged improper payments resulting from gaming the system. We hate to say we’re not surprised.
The trend we’ve observed in our risk adjusted reimbursement activities since 2004 is a growth in what we call creative diagnosing. In the early days of MRA, the majority of clinicians were not well-versed on the particulars of this payment paradigm. Patient medical charts contained numerous conditions that mapped to hierarchical condition categories (HCCs) but were not reported by the provider despite their management. Our company’s first priority became to educate providers on the conditions in the CMS-HCC model and remind them to assess and report the diagnoses since they were already treating them – and maybe even financially responsible for the cost of claims related to these conditions.
Over time, we saw improvement in this regard and turned our attention to the quality of the medical documentation and coding specificity. While risk adjusted conditions may have indeed been evident for the patient, clinician documentation was woefully inadequate in reflecting the evidence and management of these diagnoses. This road has been long and treacherous. EMRs have become a double-edged sword: making it easier for providers to click and include the required elements of the visit, but facilitating the copy/paste of templated information from one visit note to another, leading to suspicion of the documented details.
These days, creativity reigns supreme. We have observed increased “shopping through the HCC list” in an attempt to shoehorn a risk adjusted condition into bits and pieces of the member’s health factors when other, non-risk adjusted medical codes are more appropriate. Rare conditions are reported in droves, defying prevalence statistics from across the U.S. As providers and coding staff move among medical groups, they can bring a few bad habits and dubious creativity to new workplaces, which further exacerbates the issue.
This seems to be the substance behind the Cigna lawsuit: improper diagnostic codes for health conditions that its members did not have, were not recorded in medical records and were not based on clinically reliable information. The Anthem lawsuit is centered on the reporting of diagnoses that were known to be false, and not removing erroneously reported conditions from the patient’s medical profile when they were discovered.
Health plans and medical groups undoubtedly have significant MRA infrastructure, but proper auditing includes three key concepts:
- Knowledge of proper medical coding, documentation and clinical guidelines;
- Independence from real or perceived pressure to overlook inaccurate codes or faulty documentation;
- Neutrality by having an auditor who is not associated with the individual who initially performed the work.
The federal government’s history has been one of “pay & pursue.” Claims are paid and oversight is conducted retrospectively, usually very long after the fact. The same is true in the Medicare Advantage sphere with a significant difference: in fee-for-service payments, recoveries are date of service-specific. For MA plans, who receive monthly payments based on risk scores, the recoupment is retroactive, and CMS’s lookback period is six years from the payment year.
We predict increased scrutiny, with these two MA Plan lawsuits representing the tip of the iceberg in potential recoveries. Not only do we believe that more plans will be the focus of external review, but the providers themselves, who received erroneous payments, are sure to be the next group of targets. For this reason, we strongly encourage every entity that receives federal funds to assure strict adherence to its Compliance Plan and to retain an experienced and external organization to validate its risk adjusted coding.
This Pandora’s Box is open and providers must act quickly to assess their coding, remediate erroneous coding behavior and mitigate recoveries.