OIG says $2.6B paid out under MA risk adjustment with scant encounter data

Dive Brief:

  • Medicare Advantage health plans billed the federal government $2.6 billion in 2016 for more than 617,000 patients whose risk-adjusted medical conditions were diagnosed without their physician present, a new report from the HHS Office of the Inspector General concludes.
  • Further, the OIG report showed that 80% of those health risk assessments were taking place at a patient’s home and were often conducted by providers contracted by the heal plan, as opposed to their actual physician. Indeed, more than 12,000 patients were declared risk-adjusted yet received no further medical services during the calendar year. OIG cautioned such practices could deprive patients with chronic health conditions sorely needed coordinated care.
  • In response to the report, CMS said it would monitor the 30 health plans most responsible for such charges. However, it rejected several other recommendations from OIG, including establishing best practices for conducting in-home diagnoses and compelling health plans to flag any encounters where patients received in-home diagnoses.

Dive Insight:

For years, CMS has been touting coordinated, value-based care for the most vulnerable Medicare enrollees, but some MA health plans are not always practicing that philosophy.

According to the Thursday report, more than 617,000 enrollees in MA plans were diagnosed in 2016 with issues such as depression, vascular disease and diabetes, but done so by a provider other than their own physician. Despite what might seem to be a dicey form of diagnosis, this entitled the plans to additional payments from Medicare under its risk-adjusted program. In one case, more than $50,000 in additional payments were collected by the health plan in a single year for a single patient.

More than 460 Medicare Advantage plans engaged in this practice in 2016. However, nearly half of the money went to just 10 unidentified insurers, which collectively reaped $1.2 billion in risk-adjusted payments without their enrollees seeing their own doctor.

Moreover, $60.9 million was paid out on behalf of more than 12,000 patients who didn’t receive any other medical services in 2016. Twenty unidentified MA health plans shared in nearly $44 million in those payments, according to the OIG report.

The department’s findings seem to jibe with a report it released last month concluding that many MA plans do not collect enough encounter data to prevent fraud.

The Medicare Payment Advisory Commission had flagged such practices four years ago, but CMS did not take any action at the time.

OIG made five recommendations to rectify the situation: establish best practices for in-home diagnoses; establish targeted oversight of the 10 plans that reaped the most payments; establish targeted oversight of the 20 plans that received payments without the patients receiving any further medical services in 2016; reassess the risk and benefits of conducting such diagnoses at home; and flag such diagnoses in encounter data.

CMS said it would conduct the targeted oversight of the 30 health plans, but rejected the other recommendations, saying the health plans were in the best position to decide how to share home-based diagnosis data and that it did not want to conduct the notice-and-comment process behind rulemaking because “there is not a regulatory medium available at this time.”

In a relatively rare pushback, OIG stuck by its recommendation for creating best practices for home-based risk assessments because it “calls into question how effectively Medicare Advantage organizations are using health risk assessments to help coordinate care for… beneficiaries.”

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