Boost your MA compliance efforts: 4 tips from OIG’s deputy inspector general

During her recent keynote presentation at RISE’s Medicare Advantage Member Accounting and Reconciliation Summit, Ann Maxwell, deputy inspector general for evaluation and inspection for the Department of Health and Human Services (HHS) Office of Inspector General (OIG), outlined the watchdog’s risk adjustment priorities and steps that Medicare Advantage (MA) plans can do to improve compliance.

Spoiler alert: High-risk diagnosis codes, chart reviews, and health risk assessments continue to be focus areas.

Maxwell kicked off the virtual event by setting the stage of the current regulatory landscape and administration priorities: MA plans are being reimbursed on average at about 122 percent of the cost of traditional Medicare and are facing increasing oversight; the Centers for Medicare & Medicaid Services (CMS) is accelerating Risk Adjustment Data Validation (RADV) audits to confirm that the diagnoses submitted by MA plans are supported in medical records; and HHS Secretary Robert F. Kennedy Jr. is focusing on whole-person care, prevention, lifestyle, and long-term health. 

Top OIG priorities

One of OIG’s main goals is to ensure that the MA is functioning well with minimal fraud, waste, and abuse, Maxwell explained. There are three areas that guide OIG oversight:

Access to care: MA now covers over 30 million seniors and other vulnerable populations. Maxwell said access to services is a foundational principle for care. Without access, members can’t get the care they need. So, the OIG has been evaluating how well managed care is working for the people it is meant to serve. And, she said, the watchdog has seen some troubling patterns where managed care organizations may deny care to enrollees or deny payments to providers.

Financial oversight: In 2024, the federal government spent $462 billion on MA, Maxwell said. CMS and OIG audits have uncovered billions of dollars in overpayments due to submissions of diagnosis codes that weren’t supported in the actual medical records. She said the OIG remains committed to ensuring that all aspects of payments (such as risk-adjusted and capitated payments) are accurate.

Data accuracy: Accurate data is vital to ensure that the OIG safeguards program dollars, Maxwell said. Therefore, it’s critical that plans collect and use accurate data to effectively administer the program. In addition, she said comprehensive, reliable data is the only way to make use of the tremendous promises of artificial intelligence (AI) to more efficiently manage and oversee these programs.

“The emerging AI tools, as wonderful as they are and as magical as they seem sometimes, are really only as strong as the information we feed into them. AI algorithms cannot effectively identify patterns, detect anomalies, or flag potential risks if they're based on inaccurate, poor-quality data,” she said. “In fact, poor-quality data can lead those algorithms to the wrong conclusions, just wasting time and misdirecting oversight efforts."

MA risk adjustment vulnerabilities

Maxwell said the risk adjustment model can work well because it promotes health equity by recognizing the clinical complexity of some patients and that it will cost more to care for them. CMS will risk adjust those payments and provide plans with higher payments for their sicker populations who have higher than average medical costs. The OIG, she said, supports paying more for patients who need more care. It keeps the model sustainable and fair.

But the risk adjustment model also can lead to a complex set of incentives to maximize payments by making enrollees appear to be sicker than they really are, according to Maxwell. “It’s the difference between coding for care and coding for cash flow,” she said.

Four areas of concern:

Diagnosis codes: In 2023, the watchdog found that approximately 70 percent of diagnosis codes weren’t supported in the associated medical records. In some cases, this may be due to inaccurate diagnosis, Maxwell said, but in others, it appeared plans purposely submitted high-risk codes related to acute stroke, acute heart attack, embolism, and lung, breast and prostate cancer that didn’t correspond to care. Maxwell describes this problem as a systemic issue that demands attention and accountability across the entire industry.

 “Miscoded diagnosis codes are a serious compliance issue, and we are not going to let the issue drop,” she said, adding that the OIG is continuing to examine high-risk diagnosis codes and conducing audits on medical record documentation to ensure that it supports submitted diagnosis codes.

Chart reviews: CMS allows plans to conduct chart reviews to help improve submission of diagnosis codes and the accuracy of risk assessment payments. The process allows plans to retroactively assess medical charts and add or delete diagnoses to improve accuracy. Maxwell said when the OIG evaluated MA plans’ use of chart reviews, analysts found that 99 percent of the time plans added diagnosis codes and rarely deleted diagnosis codes.

In the chart review audits conducted by the OIG, none of the enrollees with the additional diagnosis codes received medical care for these diagnoses. In one example, a member had a diagnosis added on a chart review that resulted in a $229,00 risk adjustment payment to the plan. But the enrollee didn’t receive care related to the diagnosis or those payments, she said.

Maxwell said the OIG is conducting ongoing work on unlinked chart reviews, which occur when managed care plans do not specify the date of service to support diagnosis codes referred to in the chart review.

Health risk assessments (HRAs): The assessments are intended to identify risky health behaviors, such as smoking, that may impact an MA member’s need for care. Like chart reviews, HRAs can be used to substantiate risk adjustment.

Last year OIG found that diagnoses were only being reported on HRAs or HRA-linked chart reviews and no other service records. Those codes led to an additional and questionable $7.5 billion in risk adjustment payments for 2023. While some of these codes may be explained by missing data and inaccurate records, the extent of the problem makes OIG concerned that it is due to upcoding to maximize payments. Most of the overpayments, she said, were generated by in-home HRAs.

“If we make the assumption that these are all accurately being diagnosed, whether it’s in the home or not, then why are we not seeing enrollees getting care? Why are enrollees not receiving care to treat those conditions, especially when we’re seeing the conditions are pretty serious in nature,” she wondered.

She said she was pleased that UnitedHealthcare and Humana—two managed care plans that received the most revenue tied to in-home HRAs—have been working on proposed reforms that limit payments on these diagnoses if they are only documented in those tools. “I’m really gratified to see this movement by some of the plans already in response to these concerns,” she said. “Their approach demonstrates that improving care and coordination and holding in-home HRAs to higher standards is not only possible but is already underway.”

Provider fraud: The OIG is also concerned by fraud committed by providers and suppliers against managed care plans, according to Maxwell. These fraud schemes impact both plans and the federal government. “Simply put,” she said, “it's bad for business, your business, our business, and we want to help you stop that.” She said the OIG believes that partnering with managed care organization is key to prevent and detect fraud.

How to improve compliance

To address these vulnerabilities within MA, Maxwell offered four suggestions:

Continue to invest in compliance measures: Maxwell urged plans to invest time, equipment, and training into collecting, analyzing, interpreting, and making data-driven decisions. She encouraged plans to conduct internal audits and risk assessments to identify internal weaknesses and address those areas before the OIG, CMS or DOJ show up for an audit. Areas to focus on: How chart reviews are used to support risk adjustment payments, how your plan uses HRAs and in-home HRAs, and what kinds of treatment are patients receiving for diagnoses identified by those tools. She also suggested that plans review the OIG’s 2023 General Compliance Program Guidance.

Audit your data for accuracy: If medical records aren’t complete and don’t include all the services for the patient, it may appear to the OIG that members aren’t getting care for the diagnoses submitted to justify higher risk adjustment payments. She suggested that plans download the OIG’s toolkit that is designed to help MA plans improve the accuracy of diagnoses that are at high risk for being miscoded. The toolkit, she said, is a practical, hands-on reference guide that was compiled based on a decade of audits and evaluations. She said plans could replicate the techniques the OIG used to identify and evaluate the high-risk diagnosis codes.

Support coordinated care following in-home HRAs: Follow the lead of UnitedHealth and Humana to ensure that members receive care for diagnoses identified in these assessments. “Getting care to the people who need it is the fundamental goal of Medicare and Medicare Advantage,” she said. “We encourage you to think about ensuring that you're getting the proper payments, of course, but those payments are in fact being used to supply the care that patients need.”

Partner with the OIG: “We remain interested in working with you to find efficient and effective ways of delivering care and fighting fraud, waste, and abuse. We are always looking for ways to actively partner with plans. That’s why I’m here today so we can open up channels of communication,” she said, adding “We want what you want. We want a Medicare Advantage program that delivers meaningful care to patients and functions well. So, let's do that together. Let's work to deliver on Medicare Advantage.”