YES HIM Consulting, Inc. Your Consulting Firm for Auditing, Coding and Education

Medicare Advantage Insurers Use Reviews to Get Higher Payments

Medicare Advantage Insurers Use Reviews to Get Higher Payments

 

The U.S. Department of Health and Human Services’ Office of Inspector General (OIG) has flagged payments billed by health insurance companies to the federal Medicare Advantage program after an investigation revealed they might be overstating patients’ diagnoses without the proper documentation to receive larger payments (oig.hhs.gov, 2019). Based on the 2016 Medicare Advantage encounter data analyzed by the OIG, it was found that “Medicare Advantage Organizations almost always used chart reviews as a tool to add – rather than delete – diagnoses; over 99% of chart reviews in our analysis added diagnoses” (oig.hhs.gov, 2019).

Medicare AdvantageAs a result, insurers were able to get an extra $6.7 billion in payments in 2017 from the Centers for Medicare and Medicaid Services (Modern Healthcare, 2019). The OIG stated in its report that for a diagnosis to qualify for a risk-adjusted payment, it must be documented and supported by a medical record from a face-to-face doctor visit. The study found that many of these diagnoses were unsupported by the necessary documentation (oig.hhs.gov, 2019).

In a previous article, YES HIM Consulting discusses the background of Medicare Advantage and how the payments are calculated: “The Centers for Medicare and Medicaid Services pays each Medicare Advantage Organization (MAO) a monthly per-person amount for each beneficiary enrolled in its plan. The plan payment rates are determined by the plan’s bid, which is submitted to CMS on an annual basis. The per-person amount paid to each plan for enrolled beneficiaries is adjusted to account for differences in health status between enrolled beneficiaries.”

Medicare AdvantageAnd, since MAOs are paid more for sicker patients due to the higher medical costs, insurers will go to great lengths to find as many diagnoses to tack on for greater payments, including hiring third-party vendors to audit medical charts and identify additional diagnoses. The OIG report found that in 2016, “a total of 553 Medicare Advantage Organizations submitted 52.6 million chart reviews for risk-adjustment purposes, for an average of more than 95,000 reviews per insurer” (Modern Healthcare, 2019).

However, a spokesperson for America’s Health Insurance Plans says the report from the OIG may be inaccurate, because it analyzed encounter data, which is often considered incomplete or incorrect, and not the actual medical records (Modern Healthcare, 2019). This method would potentially reduce insurers’ payments.

This instance is not the first time that MAOs’ risk-adjusted payments have come under scrutiny. A different audit by the OIG revealed that Medicare Advantage plans were overpaid by millions of dollars due to over-exaggerated, unsupported risk scores (Modern Healthcare, 2014). In the OIG’s latest report, 40.6 million chart reviews were submitted, ultimately adding diagnoses, and almost half of those reviews (41%) had no records of an office visit, test, procedure or other methods to justify such diagnoses (Modern Healthcare, 2019). In addition, an OIG report from 2018 found that MAOs inappropriately denied medical claims to increase profits (The New York Times, 2018).

Medicare AdvantageTo more accurately support these risk adjustments going forward, the OIG laid out several recommendations: First, the Centers for Medicare and Medicaid Services oversee the MAOs that received payments from unlinked chart reviews and no service records; Next, they conduct audits that confirm the diagnoses listed on chart reviews; And lastly, scrutinize the risks and benefits for accepting unlinked chart reviews for risk adjustment consideration (oig.hhs.gov, 2019).

YES HIM Consulting

Medicare Advantage

Subscribe to our Newsletter

YES HIM Consulting, Inc. Largo, Fl.
Office: (727) 531-3839       Fax: (727) 240-4592