OIG: Some MA companies used chart reviews, HRAs to drive $9.2B payments
OIG suspected MA companies have financial incentives to make beneficiaries appear as sick as possible.
Photo: Sam Edwards/Getty Images
A new report examining Medicare Advantage plans released by the Department of Health and Human Services' Office of the Inspector General found that some MA plans are leveraging chart reviews and health risk assessments to drive up to $9.2 billion in payments.
The Centers for Medicare and Medicaid Services risk-adjusts payments by using beneficiaries' diagnoses to pay higher capitated payments to companies with contracts under Medicare Advantage for those expected to have higher-than-average medical costs.
OIG said it suspected this may create financial incentives for MA companies to make beneficiaries appear as sick as possible. For CMS to risk-adjust payments, MA companies report beneficiaries' diagnoses -- based on services provided to beneficiaries -- to CMS's MA encounter data system and the Risk Adjustment Processing System.
Chart reviews and health risk assessments (HRAs) are allowable sources of diagnoses for risk adjustment. A chart review is an MA company's review of a beneficiary's medical record to identify diagnoses that a provider didn't submit, or submitted in error. An HRA occurs when a healthcare professional collects information from a beneficiary about their health in order to diagnose them, and identify possible gaps in care.
OIG undertook the evaluation because the agency was concerned that some MA companies may use both chart reviews and HRAs 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, OIG said.
The risk adjustment program is an important payment mechanism for MA. It levels the playing field for MA companies that enroll beneficiaries who need a costlier level of care, which helps to ensure they have continued access to MA plans.
Chart reviews and HRAs can be tools for improving the MA program. But two prior OIG evaluations found that the diagnoses that MA companies reported only on chart reviews or HRAs in 2016 encounter data -- in effect, on no other service records -- resulted in billions in risk-adjusted payments for 2017.
Those prior evaluations raised concerns about the completeness of encounter data; the validity of submitted diagnoses on chart reviews or HRAs; and the quality of care provided to MA beneficiaries. The current analysis builds on those two evaluations to identify MA companies that disproportionately drove increases in risk adjusted payments from both chart reviews and HRAs.
WHAT'S THE IMPACT
The findings raised some concerns. OIG found that 20 of the 162 MA companies studied drove a disproportionate share of the $9.2 billion in payments from diagnoses that were reported only on chart reviews and HRAs, and on no other service records.
These companies' higher share of payments could not be explained by the size of their beneficiary enrollment. Each company generated a share of payments from these chart reviews and HRAs that was more than 25% higher than its share of enrolled MA beneficiaries.
Among these 20 MA companies, one company stood out in particular. This company, which OIG did not identify, had 40% of the risk-adjusted payments from both mechanisms, yet enrolled only 22% of MA beneficiaries. And the company accounted for about a third of all payments from diagnoses reported solely on chart reviews, and more than half of all payments from diagnoses reported solely on HRAs.
Also, almost all of its HRAs were conducted in beneficiaries' homes. Since in-home HRAs are often conducted by vendors hired by MA companies -- and not likely conducted by beneficiaries' primary care providers -- this raises particular concerns about the quality of care coordination, and the validity of diagnoses that were reported on the HRAs, OIG said.
THE LARGER TREND
The agency recommended that CMS provide oversight of the 20 MA companies that had a disproportionate share of the risk-adjusted payments from chart reviews and HRAs, and take additional actions to determine the appropriateness of payments and care for the one MA company that substantially drove risk adjusted payments.
OIG also suggested that CMS should perform periodic monitoring to identify MA companies that had a disproportionate share of risk adjusted payments.
The agency said it would provide CMS with information to help it enact these measures. CMS, for its part, was noncommittal, saying it would take the recommendations under consideration as part of its ongoing process to determine future policy options.
Twitter: @JELagasse
Email the writer: jeff.lagasse@himssmedia.com
