OIG: Medicare Advantage plans may be using health assessments to inflate payment

Medicare Advantage organizations may be improperly using health risk assessments to increase risk-adjusted reimbursement, according to a report HHS' Office of Inspector General issued in September. 

Risk-adjusted payments aim to level the financial playing field for Medicare Advantage plans that may enroll beneficiaries that require a costlier level of care than their peers. However, unsupported risk-adjusted payments could be a major driver of improper payments in the Medicare Advantage program, according to the OIG.

In its analysis of 2016 Medicare Advantage encounter data — or records that show patient diagnoses and the services they received — the OIG found that in 2017, the government paid Medicare Advantage organizations about $2.6 billion in risk-adjusted payments that were only based on health risk assessment data and not encounter data.

For 80 percent of these payments, Medicare Advantage organizations used in-house risk assessment data. Most in-house assessments were conducted by companies that partner with or are hired by the Medicare Advantage organizations and "not likely conducted by the beneficiary's own primary care provider," according to the OIG.

"Twenty [Medicare Advantage organizations] generated millions in payments from in-home [health risk assessments] for beneficiaries for whom there was not a single record of any other service being provided in 2016," the OIG said. 

This raises three concerns, according to the OIG:

  • Medicare Advantage organizations may not be submitting all required service records.
  • Beneficiaries may not be getting follow-up care to address diagnoses identified during health risk assessments.
  • Associated risk-adjusted payments may be inappropriate because diagnoses are inaccurate or not supported.

The OIG recommended that CMS increase its oversight of risk-adjusted payments.

This is the second report in the past month in which OIG has highlighted potential issues among Medicare Advantage organizations. In August, the OIG said CMS' encounter data continues to lack identifiers for ordering providers, which are used to identify potential fraud and abuse.

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