The Office of Inspector General (OIG) on Tuesday released the findings of its compliance audit of Humana Health Benefit of Louisiana. According to the audit, most of the selected diagnosis codes that Humana submitted to the Centers for Medicare & Medicaid Services’ (CMS) risk adjustment program did not comply with federal requirements.
CMS paid Humana approximately $3 billion in 2017 and 2018 to provide coverage to the 142,921 enrollees in its Medicare Advantage plan based in Louisville, Ky.
But a recent OIG audit to review high-risk diagnoses codes that Medicare Advantage organizations submit to CMS for use in its risk adjustment program, found that medical records did not support many of the diagnosis codes that Humana submitted to the agency, resulting in significant overpayment.
To conduct the audit, OIG identified 6,323 unique enrollee years but limited the review to payments associated with eight coding groups at high risk for miscoding. OIG auditors selected a stratified random sample of 240 enrollee years to review codes for acute stroke, acute myocardial infarction, embolism, sepsis, lung cancer, breast cancer, colon cancer, and prostate cancer.
Auditors found that medical records did not support the diagnosis codes for 218 of the 240 sampled enrollee years, resulting in more than $553,000 in overpayments. Based on the sample results, OIG estimates that Humana received at least $10.5 million in overpayments for 2017 and 2018. Because of federal regulations that were in effect when the OIG issued its draft audit report that limited the use of extrapolation in Risk Adjustment Data Validation (RADV) audits for recovery purposes to payment year 2018 and forward, OIG estimates Humana should repay the government $5.5 million.
In addition to the refund, OIG recommended that Humana identify similar instances of noncompliance that occurred after the audit period and refund any resulting overpayments and review its compliance procedures to identify areas where it can make improvements to ensure diagnosis codes submitted to CMS comply with federal requirements.
Humana did not agree with the findings or the recommendations. The organization said the audit methodology did not follow governing statistical and actuarial principles, the statutory requirements of the Medicare Advantage program, and CMS’ RADV processes. Humana also did not agree with the overpayment estimation methodology and said that its compliance program satisfies all legal and regulatory requirements. OIG said it stands by its findings and recommendations.