OIG: Medicare Advantage Plans Improperly Used Chart Reviews, HRAs

Some Medicare Advantage plans may have improperly used chart reviews and health risk assessments to maximize risk-adjusted payments from CMS, a report from the Office of Inspector General revealed.

CMS adjusts risk payments for Medicare Advantage companies with beneficiaries who have serious health diagnoses and higher than normal healthcare costs. To receive risk-adjusted payments, Medicare Advantage companies must report their beneficiaries’ services and diagnoses to CMS using a chart review or a health risk assessment.

A chart review is when a Medicare Advantage plan reviews a member’s medical record to ensure that a provider did not accidentally add or leave out a diagnosis. A health risk assessment is when a healthcare professional gathers health information from a beneficiary to establish a diagnosis or identify gaps in care, the OIG report stated.

OIG investigated the issue because risk-adjusted payments may influence Medicare Advantage plans to exaggerate the health of their beneficiaries.

There were concerns that Medicare Advantage plans were reporting diagnoses through chart reviews and health risk assessments for which beneficiaries did not receive care. According to OIG, unsupported risk-adjusted payments have been responsible for many improper Medicare Advantage payments.

In 2016, OIG found that some Medicare Advantage plans reported diagnoses on chart reviews or health risk assessments only, leading to billions of dollars in improper payments for 2017. OIG’s recent evaluation builds on these previous findings.

OIG looked at data from 162 Medicare Advantage companies and found that 20 plans were responsible for a high share of the $9.2 billion in payments for diagnoses that only appeared on chart reviews and health risk assessments with no other proof of service.

The share of payments that the plans generated was more than 25 percent high than their share of beneficiaries.

One company generated 40 percent of its risk-adjusted payments from misusing charts reviews and health risk assessments, but only served 22 percent of Medicare Advantage beneficiaries, the report noted.

The company was also responsible for around one-third of all payments from diagnoses that were reported on chart reviews and over half of all payments that stemmed from health risk assessments.

In addition, the company conducted most of its health risk assessments in members’ homes, which means they were likely administered by vendors instead of primary care providers, raising concerns about the validity of the reported diagnoses.

OIG offered several recommendations for CMS in response to the misuse and improper payments.

First, OIG recommended that CMS monitor the Medicare Advantage companies that were responsible for a large portion of the risk-adjusted payments from chart reviews and health risk assessments.

Next, CMS should look into the Medicare Advantage plan that had almost half of its payments derived from diagnoses on chart reviews and health risk assessments. The agency should take steps to verify if the payments and reported care were accurate.

Lastly, OIG recommended that CMS routinely monitor Medicare Advantage companies in order to identify plans that are receiving improper risk-adjusted payments due to chart review and health risk assessments.

OIG will provide CMS with information about the health plans included in their evaluations. CMS said it will consider OIG’s recommendations as the agency constructs future policies.

OIG noted how chart reviews and health risk assessments can help Medicare Advantage plans that have beneficiaries who need more expensive care. The risk adjustment program can also help ensure that these beneficiaries continue to have access to healthcare coverage.

These reporting tools can help improve Medicare Advantage, but as the OIG report revealed, they can also be the cause of improper payments if payers misuse them.

Better Medicare Alliance, a Medicare Advantage advocacy organization, responded to the OIG’s assertions about chart reviews and health risk assessments, emphasizing the benefits of these tools.

“Chart reviews and HRAs conducted in Medicare Advantage provide invaluable insights about beneficiaries’ physical, mental health, and social risk factors,” Mary Beth Donahue, president and chief executive officer of Better Medicare Alliance, stated in the response.

Donahue mentioned that the tools have led to a 43 percent lower rate of avoidable hospitalizations, a 5 percent lower rate of readmissions, and higher rates of certain cancer screenings, compared to fee-for-service Medicare.

“[Chart reviews and HRAs] also help to ensure adequate, appropriate funding for the increased healthcare needs of beneficiaries with these complex, chronic conditions,” Donahue added.