Latest investigative report will increase focus on Medicare Advantage risk adjustment
In a May 9th blog here ( https://www.healthcarelabyrinth.com/will-cms-rein-in-risk-adjustment-submissions/ ), I made the case that a reasonable reform to tackle Medicare Advantage (MA) overpayments may be to bar MA health plans from getting credit from diagnoses reported only via health risk assessments (HRAs) and other manual chart reviews. After all, enrollees should be treated by a physician for any disease states or conditions and providers should know their patients well enough to report all diagnoses over time on encounter or claim submissions.
At the time, there was a growing body of evidence about the impact of HRAs and manual chart reviews on MA plan payments — specifically, that many plans were reporting diagnoses only from HRAs and manual chart reviews and not on subsequent encounters from doctors. The Department of Health and Human Services’ Office of Inspector General (HHS OIG) had already conducted analysis of the issue and is now back with its promised 2024 study.
I am summarizing the previous findings (from HHS OIG and others) below and the new analysis as well. Go to the blog link I noted above for more details as well as my recommendations to tackle this issue and what MA plans would have to do to succeed in a new risk adjustment environment.
Surprisingly, the Centers for Medicare and Medicaid Services (CMS) took issue with some of the HHS OIG recent findings and was not absolutely convinced of the robustness of the analysis and said it needed more validation. That is surprising to me given CMS’ stances in other areas of MA. This might mean CMS is not ready to back reform in this area specifically.
Regardless of CMS’ response to the latest HHS OIG analysis, it is a good bet that Capitol Hill will pick this analysis up and pursue it. There is mounting interest in overpayments on both sides of the aisle. The Democrats want to rein in overpayments to make money available to augment traditional Medicare fee-for-service (FFS) program benefits. While allies of MA, a growing cadre of GOP lawmakers see the issue as corporate welfare and want to rein in spending generally.
Here are the past analyses
- A study published in the respected Health Affairs journal found that MA plans that conduct in-home and other Health Risk Assessments are adding considerably to revenue through coding diagnoses from these encounters. Looking at 2019 data, the study found that when such an HRA is present, risk scores increase by about 12.8 percent on average. Restricting their use for such purposes could save between $4.5 billion to $12.3 billion. The researchers found that “… artificially exaggerated coding intensity, where plans seek to enhance measured health risk through the addition or inflation of diagnoses, may threaten payment rate integrity. One factor that may play a role in escalating coding intensity is health risk assessments (HRAs)—typically in-home reviews of enrollees’ health status—that enable plans to capture information about their enrollees.”
- The HHS OIG studied HRAs for the 2017 calendar year. At the time, HHS OIG found that diagnoses reported only on HRAs-and on no other service records that year led to an estimated $2.6 billion in additional risk-adjusted payments. At the time the HHS OIG said the results “raised concerns about the quality and coordination of care for enrollees, the validity of diagnoses reported on HRAs, and the appropriateness of payments generated by HRAs for 2017.”
- The HHS OIG conducted a separate study of 2016 risk adjustment chart reviews and encounter data published in late 2019 and estimated that $6.7 billion in payments were tied to diagnoses that were only from chart reviews and not tied to any other service event.
- The HHS OIG came back in late 2021 with an additional study using the same data and combined findings for HRAs and manual chart reviews. It found that 20 of the 162 MA plans it had data on drove a disproportionate share of payments related to diagnoses that were reported only on chart reviews and HRAs and no other service events. HHS OIG pegged the overall universe of potential overpayments across all the plans at $9.2 billion. HHS OIG said that the higher share of payments to the 20 plans could not be explained by their enrollment size. The companies generated payments that were more than 25 percent higher than their share of enrolled MA beneficiaries. The 20 companies drove 54% of the $9.2 billion. One company drove 40% of the total amount.
The new analysis
In a new October 24, 2024 analysis titled “Medicare Advantage: Questionable Use of Health Risk Assessments Continues To Drive Up Payments to Plans by Billions,” HHS OIG concludes that “taxpayers fund billions of dollars in overpayments to MA companies each year based on unsupported diagnoses for MA enrollees. It also says: “Unsupported diagnoses inflate risk-adjusted payments and drive improper payments in the MA program.”
Its latest analysis updates its 2016 work that looked at both HRAs and manual chart reviews. It now uses 2022 data. It again found that diagnoses reported only on enrollees’ HRAs and HRA-linked chart reviews meant an estimated $7.5 billion in MA risk-adjusted payments for 2023 for 1.7 million MA enrollees. Again, these diagnoses were not reported on any other encounters or claims submitted to CMS by the MA plans. The HHS OIG says it “raises concerns that either: (1) the diagnoses are inaccurate and thus the payments are improper or (2) enrollees did not receive needed care for serious conditions reported only on HRAs or HRA-linked chart reviews.”
Of the $7.5 billion in payments identified, HHS OIG found the following:
- $3.5 billion was from in-home HRAs.
- $2.7 billion was from facility HRAs.
- $1.3 billion in HRA-linked chart reviews.
- $92 million was from tele-health HRAs.
HHS OIG also says about $4.2 billion of the total was generated from in-home HRAs and associated or linked chart reviews. This was the biggest impact by far and MA plans generated $1,869 in estimated risk adjusted payments for each in-home HRA. Just 13 health conditions drove 75 percent of the estimated $7.5 billion in payments from HRAs and HRA-linked chart reviews.
Most MA plans (157 of 170) generated risk-adjusted payments from HRAs and HRA-linked chart reviews with no other encounter records of visits, procedures, tests, or supplies that contained these diagnoses.
Most MA plans’ (137 of 157) share of these payments was proportional to or lower than their percentage of enrollees. However, the analysis found that just 20 MA plans drove 80% of the $7.5 billion in payments. HHS OIG says these MA plans generated a substantially greater share of payments resulting from HRAs or HRA-linked chart reviews for certain health conditions as well as compared with their percentage of enrollment.
One top MA plan, United Healthcare, drove about two-thirds of risk-adjusted payments from diagnoses reported only on in-home HRAs and HRA-linked chart reviews. It covered only 28 percent of 2022 MA enrollees.
Plans with the highest payments included:
— UnitedHealth Group: $3.7 billion
— Humana: $1.7 billion
— The Cigna Group: $237 million
— Scan Group: $127.6 million
— Alignment Healthcare: $60 million
— Independent Health: $38.7 million
— Viva Health (Triton Health Systems): $23.7 million
— Intermountain Health Care $18.5 million
— HealthPartners: $15.9 million
— Hometown Health Plan (Renown Health): $7.2 million
The statistics that 20 plans drive 80% of payments and one plan drives two-thirds is evidence that there are a handful of bad-actor plans giving the entire industry a bad name. I have made this point often.
The analysis also notes that the top 20 MA companies had a higher percentage of enrollees who were dually eligible and/or eligible for the low-income subsidy (LIS). These folks were disproportionately represented among those with diagnoses that generated payment from HRAs or HRA-linked chart reviews. Many are found in Special Needs Plans (SNPs), which these bigger plans are making major investments in.
HHS OIG recommendations
HHS OIG says CMS needs to make reforms. HHS OIG recommends the following:
- Imposition of additional restrictions on the use of diagnoses reported only on in-home HRAs or chart reviews that are linked to in-home HRAs for risk-adjusted payments.
- Conducting audits to validate diagnoses reported only on in-home HRAs and HRA-linked chart reviews.
- Determining whether certain health conditions that drove payments from in-home HRAs and HRA-linked chart reviews may be more susceptible to misuse.
#radv #riskadjustment #fwa #medicareadvantage
— Marc S. Ryan
