In recent testimony before the United States House Committee on Energy and Commerce Subcommittee on Oversight and Investigations, Christi A. Grimm, Inspector General of the Department of Health and Human Services (HHS) discussed critical issues surrounding risk adjustment in Medicare Advantage (MA) and proposed solutions to address these challenges. Most notably, the recommendation that diagnoses appearing “only on health risk assessments or chart reviews, without evidence of appropriate health care services or meaningful actions by plans to connect enrollees to those services, should be restricted for purposes of risk adjustment calculations.” 1 This could represent a significant shift in not only the capture of diagnosis but also signal a change in overall reimbursement oversight by federal regulators. Here are four additional takeaways with recommendations for risk mitigation:
1. Rising Improper Payments in Medicare and Medicaid: Grimm highlighted the significant issue of improper payments within Medicare and Medicaid managed care programs, emphasizing the need for increased oversight and enforcement to safeguard taxpayer dollars and ensure the integrity of these programs. In FY 2023, HHS-OIG's investigative work yielded approximately $3.16 billion in expected recoveries from improper payments, showcasing the scale of the issue.
Recommendation: Providers can expect ongoing scrutiny of coding, documentation, and audit practices. 2 The integrity of healthcare data is a cornerstone of quality patient care, informed decision-making, and operational efficiency. Regular audits and assessments should be conducted to evaluate compliance with governance policies and identify areas for improvement. Healthcare providers should ensure the accuracy, consistency, and reliability of their documentation by evaluating output against their own internal standards and seeking out best practices from industry experts.
2. Continued Focus on Vulnerabilities in MA Risk Adjustment: The testimony pointed out substantial vulnerabilities in the Medicare Advantage (Part C) risk adjustment process, where plans may receive overpayments by overstating enrollee sickness levels. With the growth of value-based care and scrutiny on accurate capture of Social Determinants of health (SDoH) payers and providers will need to be concerned with inaccuracies in payments, as well as unmet healthcare needs and/or unreported services. 3 On December 14, 2023, the Office of the Inspector General (OIG) released its “Toolkit To Help Decrease Improper Payments in Medicare Advantage Through the Identification of High-Risk Diagnosis Codes.” The toolkit noted that as of November 2023, audits of MA plans have identified almost 70% of submitted diagnosis codes were unsupported based on a review of the medical records. 4
Recommendation: It is an expectation that MA organizations routinely review their own medical records to both identify and if needed, correct any inaccurate coding. Indeed, the Centers for Medicare and Medicaid Services (CMS) “relies on MA organizations not only to collect diagnosis codes from their providers and submit the associated codes to CMS but also to implement an effective compliance program to monitor the accuracy of these diagnosis codes.” 4 Ensure training and provider engagement communications are consistently updated to reflect changing requirements for reporting of chronic conditions and factors influencing health status.
3. Medicaid Managed Care Challenges: Grimm outlined critical areas of concern in Medicaid managed care, including eligibility determination errors, duplicate capitation payments for enrollees registered in multiple states, and payments for deceased enrollees. These issues highlight systemic weaknesses that require urgent attention to prevent further financial losses and ensure accurate and fair program administration.
Recommendation: Payers should continue to have strong controls and oversight of all delegated relationships and business partner agreements, in addition to ensuring state-level adherence to all Medicaid requirements. This framework should define who is accountable for documentation accuracy, how clinical documentation is collected, stored, processed, and maintained, and the policies for data access and sharing.
4. Need for Increased Investment in Oversight and Enforcement: The testimony emphasized the pressing need for additional resources for HHS-OIG to effectively combat fraud, waste, and abuse in health care programs. With the healthcare industry representing a significant portion of the economy, the risks of improper payments and fraud are escalating. Grimm highlighted the necessity for continued and enhanced efforts to address fraud, waste, and abuse in Medicare and Medicaid, ensuring these vital healthcare programs operate efficiently and effectively for beneficiaries.
Recommendation: Embrace the culture of compliance to limit organizational exposure to potential fraudulent behaviors. It is crucial for payers to foster an environment where every team member understands the importance of compliance and is committed to upholding it. Encourage questions, celebrate transparency, and make sure leaders model behavior. When management is aligned and demonstrates a commitment to compliance through their actions, it sets a consistent tone for the rest of the organization.
[1] https://oig.hhs.gov/newsroom/testimony/examining-how-improper-payments-cost-taxpayers-billions-and-weaken-medicare-and-medicaid/
[2] https://www.nytimes.com/2023/01/30/upshot/medicare-overbilling-biden-rule.html
[3] https://www.cms.gov/priorities/health-equity/minority-health/equity-programs/framework
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