WASHINGTON—The Office of the Inspector General (OIG) reviewed Medicare Advantage (MA) companies’ use of health risk assessments (HRAs), which often increase payments to MA plans by billions of dollars. As a result of the review, OIG offered suggestions to the Centers for Medicare and Medicaid Services (CMS).
Why OIG Did This Review
MA companies receive higher risk-adjusted payments from CMS for enrollees who are sicker, which helps to ensure that plans receive sufficient payment to cover more costly care and enrollees have continued access to MA plans. However, taxpayers fund billions of dollars in overpayments to MA companies each year based on unsupported diagnoses for MA enrollees. Unsupported diagnoses can inflate risk-adjusted payments and drive improper payments in the MA program.
Using MA encounter data from 2016, prior OIG work identified two sources of enrollee diagnoses—HRAs and chart reviews—that can be vulnerable to misuse by MA companies. This evaluation aims to update that work and determine whether vulnerabilities persist regarding the appropriateness of resulting risk-adjusted payments and the quality of care for enrollees with diagnoses that were only reported on HRAs in the MA encounter data from 2022. Additionally, this evaluation offers a new examination of the extent to which MA companies use chart reviews of information gathered as part of HRAs, in order to add diagnoses that increase their risk-adjusted payments (HRA-linked chart reviews).
What OIG Found
OIG found that the diagnoses that were only reported on enrollees’ HRAs and HRA-linked chart reviews—not on any other 2022 service records—resulted in an estimated $7.5 billion in MA risk-adjusted payments for 2023. The lack of any other follow-up visits, procedures, tests or supplies for these diagnoses in the MA encounter data for 1.7 million MA enrollees raises concerns that either:
- The diagnoses are inaccurate, and thus, the payments are improper; or
- Enrollees did not receive needed care for serious conditions reported only on HRAs or HRA-linked chart reviews.
The OIG review revealed in-home HRAs and HRA-linked chart reviews generated almost two-thirds of the estimated $7.5 billion in risk-adjusted payments. Therefore, in-home HRAs and HRA-linked chart reviews may be more vulnerable to misuse, because these tools are often administered by MA companies or their third-party vendors and not an enrollees’ own provider. The diagnoses only reported on these types of records heighten concerns about the validity of the diagnoses or the coordination of care for MA enrollees.
Notably, just 20 MA companies alone drove 80% of the estimated $7.5 billion in payments. Additionally, these MA companies generated a greater share of payments resulting from HRAs or HRA-linked chart reviews for certain health conditions, including serious and chronic illnesses like diabetes and congestive heart failure.
What OIG Recommends
In addition to implementing prior OIG recommendations, OIG suggested that CMS should:
- Impose additional restrictions on the use of diagnoses only reported on in-home HRAs or chart reviews that are linked to in-home HRAs for risk-adjusted payments.
- Conduct audits to validate diagnoses only reported on in-home HRAs and HRA-linked chart reviews.
- Determine whether select health conditions that drove payments from in-home HRAs and HRA-linked chart reviews may be more susceptible to misuse among MA companies.
OIG said that CMS concurred with its third recommendation, but not the other two.
