Gateway Health Plan improperly received an estimated $4.3 million in Medicare Advantage (MA) payments after submitting diagnosis codes that federal auditors say were not supported by medical documentation, according to a new compliance audit from the Department of Health and Human Services Office of Inspector General (HHS‑OIG).
The audit found that most of the diagnosis codes that the Pittsburgh‑based MA plan submitted to the Centers for Medicare & Medicaid Services (CMS) for risk‑adjusted payment calculations did not meet federal requirements.
Based on a sample of 286 enrollee‑years, OIG estimated that Gateway Health Plan received at least $4.3 million in net overpayments for 2018 and 2019.
The audit is the latest in a series of OIG reviews focusing on high-risk diagnosis codes used in CMS’ risk-adjustment program. Under the MA payment model, CMS pays health plans a fixed monthly amount for each enrollee, adjusted higher for members with documented diagnoses. The sicker the member, the higher the payment.
During the audit period for payment years 2018 and 2019, CMS paid Gateway approximately $1.5 billion to provide coverage to its 46,550 members.
For the audit, OIG examined 10 categories of high‑risk diagnosis codes submitted to CMS, including acute stroke, acute myocardial infarction, embolism, sepsis, pressure ulcer, and lung, breast, colon, prostate and ovarian cancers.
OIG identified 1,823 unique enrollee-years but focused on payments associated with the high-risk codes. Auditors reviewed a sample of 286 enrollee-years and found that:
- 232 of the medical records either didn’t support the diagnosis codes, or
- Gateway could not locate the medical records at all
OIG said the errors in the sample resulted in $830,334 in net overpayments and an extrapolated total of at least $4.3 million for 2018 and 2019.
The watchdog recommended that Gateway repay the millions in overpayments and refund overpayments based on similar instances of noncompliance that occurred after the audit period. It also suggested the health plan review and strengthen compliance procedures to prevent future miscoding of high‑risk diagnoses.
Gateway disputed OIG’s findings for 38 enrollee‑years and rejected all recommendations. The health plan argued that auditors used a flawed methodology focused only on alleged overpayments, ignored potential underpayments, and lacked the statutory authority to extrapolate sample‑based overpayments to the full population.