Earlier this month, the U.S. Department of Health and Human Services (HHS) Office of the Inspector General (OIG) released a report highlighting concerns about how Medicare Advantage Organizations (MAOs) are using health risk assessments to improve care and health outcomes under the Medicare Advantage (MA) program, as intended, and about the sufficiency of oversight by the Centers for Medicare & Medicaid Services (CMS).
Health risk assessments can be a tool for early identification of health risks to improve beneficiaries’ care and health outcomes. However, some MAOs may be initiating and using the risk assessments, often by hiring companies to conduct them in beneficiaries’ homes, to collect diagnoses and maximize risk-adjustment payments without improving care.
OIG Findings
The OIG found that diagnoses that MAOs reported only on health risk assessments, and not on any other encounter records, resulted in an estimated $2.6 billion in risk-adjusted payments to MAOs for 2017. According to the OIG, this and other findings in the report raise three types of concerns: (1) a data integrity concern that MAOs are not submitting all service records as required; (2) a care coordination concern that beneficiaries are not receiving follow-up care to address diagnoses identified during health risk assessments; and (3) a payment integrity concern that if diagnoses are inaccurate or unsupported, the associated risk-adjusted payments would then be inappropriate.
CMS and the Medicare Payment Advisory Commission (MedPAC) have raised concerns in the past that MAOs may receive financial benefits without improving beneficiaries’ health if MAOs initiate health risk assessments and use them to collect diagnoses without ensuring that beneficiaries receive needed follow-up care. In 2015, CMS stated that it had observed an increase in in-home visits to assess MA enrollees. According to CMS, non-physician practitioners working for companies hired by MAOs often performed these in-home health risk assessments, and the resulting care coordination appeared to vary across plans. CMS previously identified best practices for in-home health risk assessments in its 2016 Call Letter.
OIG pointed to CMS’ and MedPACs’ concerns as rationale for undertaking this study while noting that the MA program provided coverage to 23 million beneficiaries in 2019 at a cost of $264 billion and that unsupported risk-adjusted payments have been a major driver of improper payments in the MA program.
The OIG noted that almost all MAOs in its review had estimated risk-adjusted payments that resulted solely from health risk assessments, but a few drove a large portion of those payments. Overall, 462 MAOs reported diagnoses only on health risk assessments. Ninety-five percent of these MAOs had a payment resulting solely from health risk assessments. For these 438 MAOs, risk-adjusted payments due solely to diagnoses reported on risk assessments varied significantly, ranging from a high of $243.9 million to a low of $1,558 across MAOs.
However, the OIG found that ten MAOs had an estimated $1.2 billion of the risk-adjusted payments that resulted from diagnoses only on health risk assessments. These 10 MAOs belonged to two parent organizations that had $2.1 billion in payments resulting solely from risk assessments. These top two parent organizations had 81 percent of risk-adjusted payments from risk assessments but enrolled just 40 percent of all MA beneficiaries.
In concluding its report, OIG recommended that CMS: (1) require MAOs to implement best practices to ensure care coordination for HRAs; (2) provide targeted oversight of the 10 parent organizations that drove most of the risk-adjusted payments resulting from in-home HRAs; (3) provide targeted oversight of the 20 MAOs that drove risk-adjusted payments resulting from in-home HRAs for beneficiaries who had no other service records in the encounter data; (4) reassess the risks and benefits of allowing in-home HRAs to be used as sources of diagnoses for risk adjustment; and (5) require MAOs to flag any MAO-initiated HRAs in their MA encounter data.