A recent report by the Department of Health and Human Services Office of Inspector General (HHS-OIG), “Billions in Estimated Medicare Advantage Payments From Chart Reviews Raise Concerns,” questioned the use of chart reviews by Medicare Advantage (MA) plans. HHS OIG is concerned that the Medicare rules have enabled MA plans to make patients appear sicker than they really are to receive higher risk-adjusted payments from the Centers for Medicare & Medicaid Services (CMS).
Currently, chart reviews allow MA organizations to add and delete diagnoses in the encounter data based on a review of records. However, the chart review can sometimes circumvent CMS’ face-to-face requirement and can also allow the MA organization to add unnecessary diagnoses to make patients appear sicker and therefore get more money.
In writing the report, OIG reviewed encounter data from 2016 that was used to determine risk-adjusted payments in 2017 and found several issues. According to the report, diagnoses that were reported only on chart reviews (not on any service records) resulted in roughly $6.7 billion in risk-adjusted payments for 2017. Further, CMS based about $2.7 billion in risk-adjusted payments on chart review diagnoses that weren’t even linked to a specific service provided to the beneficiary.
While limited to a small number of beneficiaries, almost half of MA organizations had payments from unlinked chart reviews where there was no record of a service being provided to the beneficiary in 2016. OIG also found that while MA plans can add or delete diagnoses during a chart review, they almost always added instead of deleted diagnoses.
The findings from the report raise concerns about payment integrity and accuracy of diagnoses. “There may be a quality-of-care concern that beneficiaries are not receiving needed services for potentially serious diagnoses listed on chart reviews, but with no service records,” OIG said.
OIG also took issue with CMS no reviewing the financial impact of chart reviews in encounter data on risk-adjusted payments. “CMS has not yet performed audits that validate diagnoses reported on chart reviews in the encounter data against beneficiaries’ medical records,” OIG said. “CMS reported that it plans to begin audits that would include such chart reviews later this year.”
In conclusion, HHS OIG recommends that CMS provide targeted audits for risk-adjusted payments for chart reviews and then reassess whether to permit chart reviews not linked to a service record to be used as a source of diagnosis. CMS agreed with the recommendations.