OIG: Aetna may have received more than $25 million in MA overpayments

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A new audit by the Department of Health and Human Services' Office of the Inspector General has found that health insurer Aetna received about $25.5 million in Medicare Advantage overpayments in 2015 and '16.

According to the audit, which analyzed seven groups of diagnostic codes at risk of being miscoded, most of the selected diagnosis codes that Aetna submitted to the Centers for Medicare and Medicaid Services for use in CMS' risk adjustment program did not comply with federal requirements.

For 155 of the 210 sampled enrollee-years, the medical records that Aetna provided did not support the diagnosis codes and resulted in $632,070 in overpayments, OIG found. The $25.5 million is an extrapolation based on those sample results.

OIG found that Aetna's policies and procedures to prevent, detect and correct noncompliance with CMS' program requirements, as mandated by federal regulations, "could be improved."

In a lengthy response, Aetna said it saw flaws in OIG's methodology.

"The most problematic of these flaws is OIG's apparent expectation for perfect coding in the MA program," Aetna wrote in a letter to the agency. "Perfect coding is not attainable because coding is highly individualized and variable. OIG finds uniform coding errors because the OIG methodology is designed to produce that outcome."

Aetna cited CMS' assertion that Medicare Advantage Organizations (MAOs) "cannot reasonably be expected to know that every piece of data is correct, nor is that the standard that [CMS], the OIG, and DOJ believe is reasonable to enforce." The methodology's flaw, said Aetna, conflicts with a fundamental assumption of the risk adjustment system: The overreporting of some diagnosis codes offsets the underreporting of others, which achieves overall payment accuracy.

The insurer claimed that providers are the root cause of most coding errors.

WHAT'S THE IMPACT

Under Medicare Advantage, CMS makes monthly payments to MA organizations according to a system of risk adjustment that depends on the health status of each enrollee. Accordingly, MA organizations are paid more for providing benefits to enrollees with diagnoses associated with more intensive use of healthcare resources than to healthier enrollees, who would be expected to require fewer resources.

To determine the health status of enrollees, CMS relies on MA organizations to collect diagnosis codes from their providers and submit these codes to CMS. Some diagnoses are at higher risk for being miscoded, which may result in overpayments from CMS.

OIG, for its part, recommended that Aetna refund the $632,070 in overpayments to the federal government. It also wants the insurer to determine whether the medical records in each case support the diagnosis for the unrelated condition, and refund any resulting overpayments to the government, as well as examine and improve its compliance procedures.

THE LARGER TREND

Diagnostic codes were also at the center of a lawsuit against Cigna, with the insurer agreeing last week to pay $172 million to resolve allegations that it padded its reimbursement by submitting false Medicare Advantage diagnostic codes.

The agreements resolve a False Claims Act lawsuit brought by a whistleblower and the federal government linked to past risk adjustment submissions from certain types of patient records, some dating back more than a decade.
 

Twitter: @JELagasse
Email the writer: Jeff.Lagasse@himssmedia.com