The new report reveals the Centers for Medicare & Medicaid Services (CMS) paid $7.5 billion in Medicare risk-adjustment payments for 2023 for diagnoses that only appeared in Medicare Advantage members’ health risk assessments and no other records.
RELATED: WSJ investigation: Medicare Advantage plans were paid billions for diseases patients never had
The analysis follows a July investigation by the Wall Street Journal that found Medicare Advantage insurers were paid $50 billion from 2018 to 2021 for thousands of questionable diagnoses.
Physicians or other health care professionals conduct health risk assessments to gain information about patients’ health status, health risks, and daily activities. But the Office of Inspector General (OIG) set out to determine whether the assessments lead to follow-up care.
OIG has conducted previous investigations that raised concerns about whether Medicare Advantage organizations use health risk assessments to improve care, as intended. Those reports used 2016 Medicare Advantage encounter data and found that diagnoses reported only on health risk assessments and no other service records led to an estimated $2.6 million in risk-adjusted payments for 2017. Medicare Advantage organizations that have sicker enrollees receive higher risk-adjustment payments to ensure they have enough money to cover the more costly care.
The latest report updates the previous investigation to determine whether the vulnerabilities still exist and the extent to which organizations use chart reviews of the health risk assessments to add diagnoses that may increase their risk adjustment payment.
Analysts found:
· Diagnoses reported only on the health risk assessments and those linked to their chart reviews resulted in an estimated $7.5 billion in risk-adjusted payments for 2023. Most Medicare Advantage organizations (157 of 170) received risk-adjusted payments from the health risk assessments and the linked chart reviews for 1.7 million enrollees with no other encounter records of visits, procedures, tests, or supplies that contained these diagnoses.
OIG said the lack of any other follow-up visits, procedures, tests, or supplies for these diagnoses in the Medicare Advantage encounter data for these enrollees raises concerns that either the diagnoses are inaccurate and led to improper payments or enrollees didn’t receive needed care for serious conditions reported only on the health risk assessments or the linked chart reviews.
· In-home health risk assessments and those linked to chart reviews generated almost two-thirds of the estimated $7.5 billion in risk-adjusted payments. OIG analysts said that they may be more vulnerable to misuse because Medicare Advantage organizations or third-party vendors conduct them instead of members’ own providers. Diagnoses reported only on these types of records heighten concerns about the validity of the diagnoses or the coordination of care for enrollees, the report said.
· On average, Medicare Advantage organizations received $1,869 in estimated risk adjusted payments for each in-home health risk assessment. And, on average, for each facility-based health risk assessment, they received $376 in estimated risk adjustment payments.
· Taken together, in-home health risk assessments and the subset of chart reviews that relied upon them led to an estimated $4.2 billion of the total $7.5 billion in risk-adjustment payments.
· Just 13 health conditions drove 75 percent ($5.6 billion) of the estimated $7.5 billion in 2023 risk-adjusted payments from health risk assessments and their linked chart reviews. Almost half of these payments ($2.7 billion) were generated by in-home health risk assessments.
· Twenty Medicare Advantage organization drove 80 percent of the estimated $7.5 billion in payments. These organizations generated a greater share of payments due to the health risk assessments or their linked chart reviews for certain health conditions, including serious and chronic illnesses, such as diabetes and congestive heart failure.
OIG recommends that CMS take the following actions to prevent further misuse of health risk assessments:
· Impose additional restrictions on the use of diagnoses reported only on in-home health risk assessments or chart reviews that are linked to them for risk-adjusted payments.
· Conduct audits to validate diagnoses reported only on in-home health risk assessments and those linked to chart reviews.
· Determine whether select health conditions that drove payments from in-home health risk assessments and those linked to chart reviews may be more susceptible to misuse among Medicare Advantage organizations.
CMS agreed with the third recommendation but not the other two.