OIG Increases Scrutiny on Medicare Advantage Coding

Featuring: Hannah Maroney + Cara Tucker | Legal Counsel

Federal agencies have recently increased their focus on Medicare Advantage (MA) plan compliance with federal coding requirements, and specifically, the reporting of inaccurate diagnoses codes for enrollees with certain high-risk diagnoses, resulting in increased (though incorrect) payments from Medicare.

So far this year, OIG has audited nine MA plans for coding compliance issues with these high-risk diagnoses codes, and has generally found that MA plans failed to comply with Federal requirements when submitting these codes.

Plan-specific overpayments + false claims

When analyzing a sample audit of Aetna claims, OIG found that patient medical records did not support the diagnoses codes submitted by Aetna. OIG calculates that Aetna is responsible for $632,070 in overpayments associated with the sample reviewed, and as a result estimates that Aetna received at least $25.5 million in overpayments for 2015 and 2016.

Similarly, Cigna has agreed to settle allegations brought by the Justice Department claiming that Cigna violated the False Claims Act by submitting false diagnosis codes and failing to withdraw inaccurate diagnosis codes for enrolled Medicare Advantage patients, resulting in increased Medicare payments.

Specifically, for payment years 2014 to 2019, Cigna allegedly engaged professional healthcare coders to conduct retroactive “chart reviews” which resulted in the submission of previously un-reported additional diagnosis codes to CMS. Moreover, DOJ highlighted that these chart reviews conducted by Cigna also failed to substantiate the diagnoses codes previously submitted by providers before billing Medicare.

Additionally, for payment years 2016 to 2021, DOJ alleges that Cigna “knowingly submitted and/or failed to delete inaccurate and untruthful diagnosis codes for morbid obesity (ICD-10 E66.01 & E66.2, ICD-9 278.01 & 278.03).” As a result, Cigna allegedly utilized the chart reviews to bolster payments with the reporting of additional diagnoses codes while simultaneously failing to report overpayments using the same captured information.

Correction + next steps

OIG recommends that MA plans identify and refund any overpayments while continuing to examine and improve compliance procedures. In July, OIG added to its Work Plan a “Medicare Part C High-Risk Diagnosis Codes Tool Kit.” OIG explained that it will develop this resource to assist MA plans with analyzing the accuracy of data received from providers, and this will be a starting point from which MA plans can research enrollees who receive diagnoses that are at high risk for being miscoded and then take appropriate action as needed.

In light of this increased enforcement activity for MA plans and the OIG toolkit which (when developed) will assist MA plans in analyzing provider coding, it is likely that providers will experience heightened attention in this area, including an increase in pre-payment and post-payment audits by MA plans. As such, from a practical perspective, providers should ensure that proper coding processes and procedures are in place to avoid noncompliance when submitting claims to MA plans.

These materials are for general informational purposes only. These materials do not, and are not intended to, constitute legal or compliance advice, and you should not act or refrain from acting based on any information provided in these materials. Neither Ensemble Health Partners, nor any of its employees, are your lawyers. Please consult with your own legal counsel or compliance professional regarding specific legal or compliance questions you have.