OIG Finds CMS Overpaid Geisinger Medicare Advantage Plan by Over $566K

The Office of the Inspector General (OIG) found that most of the audited diagnosis codes that Geisinger Health Plan sent to CMS for its Medicare Advantage plan were non-compliant.

The office audited 270 unique enrollee-years with high-risk codes. The audit focused on the years 2016 and 2017. OIG split the diagnosis codes into nine high-risk groups: acute stroke, acute heart attack, breast cancer, colon cancer, embolism, lung cancer, major depressive disorder, prostate cancer, and vascular claudication.

Out of the 270 enrollee-years, all but 46 enrollee-years were non-compliant. This means that either the health plan could not produce evidence for the diagnosis codes or the evidence that the health plan offered did not reinforce the diagnosis codes.

The payment for all the diagnoses—complaint and noncompliant together—was $706,678. Of this, OIG considered $566,476 overpayments. This could mean that from 2016 through 2017 Geisinger received a minimum of $6.5 million in overpayments.

Acute stroke, acute heart attack, and breast cancer each had 30 enrollee-years’ worth of unsupported diagnosis codes. These three diseases had the highest rates of enrollee-years with unsupported diagnosis codes, but they were not far ahead of the other groups. Colon cancer and prostate cancer had 29 enrollee-years of unsupported diagnosis codes and embolism and lung cancer each had 27 enrollee-years’ worth.

The exceptions were major depressive disorder and vascular claudication, which is pain caused in appendages by restricted blood flow. Major depressive disorder had eight enrollee-years of unsupported diagnosis codes and 22 enrollee-years of supported diagnosis codes. Vascular clauditation was a more even split—14 unsupported enrollee-years and 16 supported enrollee-years.

Lung cancer unsupported diagnosis codes resulted in the highest level of overpayments. The disease cost CMS $181,092 across 2016 and 2017 for the 27 unsupported enrollee-years.

OIG offered three recommended actions. First, the health plan should refund the government the amount that it was overpaid for those two years ($566,476). Second, Geisinger Health Plan should change its compliance process.

Lastly, the payer should assess its submissions from before and after 2016 and 2017 to catch any other unsupported diagnosis codes and refund the government. This could mean returning over $6.5 million to the federal government, according to OIG’s estimates.

After OIG issued this recommendation, CMS finalized changes to Medicare Advantage Risk Adjustment Data Validation (RADV) audits barring payers from refunding for extrapolated overpayments before 2018. OIG adjusted its recommendation, requesting only that Geisinger Health Plan refund the 224 enrollee-years.

The health plan did not deny the existence of the 224 enrollee-years of unsupported diagnosis codes and promised to erase those codes. However, Geisinger rejected OIG’s conclusions about auditing the years outside of 2016 and 2017 and refunding the government for net overpayments from those timeframes.

The adjusted RADV rule, finalized in February 2023 four years after CMS first proposed the rule, has been the source of much contention in the health insurance industry. While major payer executives voiced support for risk adjustment in general, many disagreed with the decision to omit the fee-for-service adjuster. Cases like this will test the rule’s impact, in this circumstance related to limiting the timeframe for extrapolation of overpayments.