In the intricate world of Medicare Advantage (MA) programs, accurate health care coding and robust compliance audits are not just procedural necessities—they are the bedrock of fiscal integrity and appropriate patient care. The Centers for Medicare & Medicaid Services (CMS) utilizes a risk adjustment system to ensure that MA organizations receive suitable funding based on the health status of their enrollees. This system hinges on the meticulous collection and submission of diagnosis codes, a process that is constantly under scrutiny to prevent inaccuracies and potential overpayments.
Why Health Care Coding and Compliance Audits Are Essential
The risk adjustment model in Medicare Advantage operates on the principle that organizations caring for sicker patient populations should receive higher payments. To achieve this, CMS relies on diagnosis codes submitted by MA organizations, which are then categorized into Hierarchical Condition Categories (HCCs). Essentially, the more complex the health conditions of an enrollee, as reflected in their diagnosis codes and mapped to HCCs, the greater the reimbursement to the MA organization.
Given the financial implications, the accuracy of diagnosis coding is paramount. Health Care Coding And Compliance Audits serve as critical mechanisms to verify that these submitted codes are not only accurate and substantiated by medical records but also compliant with federal regulations. These audits are designed to ensure that payments are appropriate and that the system remains equitable and sustainable. Without rigorous audits, there’s a risk of inflated diagnosis reporting, leading to unwarranted financial gains and potentially compromising the integrity of the Medicare Advantage program.
OIG Audit on MMM Healthcare: Uncovering Coding Discrepancies
A recent audit by the Office of Inspector General (OIG) on MMM Healthcare, LLC, provides a tangible example of the importance of these audits. The OIG’s objective was clear: to assess whether MMM Healthcare adhered to federal requirements when submitting diagnosis codes to CMS for risk adjustment purposes.
The methodology employed by the OIG involved a meticulous review of a sample of 200 enrollees. For these enrollees, MMM Healthcare had submitted diagnosis codes that mapped to HCCs for the year 2017. The OIG then requested and received medical records from MMM to substantiate 688 HCCs associated with this sample group. To ensure impartiality and expertise, an independent medical review contractor was enlisted to evaluate whether the submitted diagnosis codes were in full compliance with federal guidelines.
The findings revealed significant discrepancies. While a substantial portion—580 out of 688—of the sampled HCCs were indeed validated by the medical records, a notable 108 HCCs were not. This lack of validation signaled instances where the submitted diagnosis codes were not adequately supported, leading to overpayments. Among these unvalidated HCCs, 11 cases involved situations where a less severe manifestation of the same condition should have been coded, and another 11 instances where valid diagnosis codes existed in the medical records but were not submitted by MMM.
As a result of these coding inaccuracies, the OIG determined that the risk scores for the sampled enrollees should have been based on 602 HCCs rather than the initially submitted 688. This discrepancy translated to a net overpayment of $165,312 for the sampled enrollees. Extrapolating these findings, the OIG estimated a staggering $59 million in net overpayments for 2017. The audit concluded that these errors stemmed from weaknesses in MMM Healthcare’s policies and procedures aimed at preventing, detecting, and rectifying noncompliance with CMS program requirements.
Recommendations and the Path to Improved Compliance
In light of these findings, the OIG issued clear recommendations to MMM Healthcare. Firstly, they recommended a refund of the $165,312 in identified net overpayments. Secondly, and perhaps more importantly, they urged MMM Healthcare to enhance their existing policies and procedures to proactively prevent, detect, and correct any future noncompliance issues related to diagnosis codes used for risk-adjusted payments.
MMM Healthcare initially contested the findings and recommendations, raising concerns about inconsistencies with HHS and CMS accuracy requirements, the complexities of risk adjustment, and comparisons to other audits. They also disagreed with the OIG’s assessment of their compliance and education programs. However, after a thorough review of MMM’s feedback and additional information, the OIG revised its initial report, reducing the number of HCCs in error and adjusting the overpayment calculation. Despite these adjustments, the core recommendation for improved policies and procedures remained firmly in place, underscoring the ongoing need for robust health care coding and compliance audits within the Medicare Advantage program.
This case underscores that health care coding and compliance audits are not merely about financial recovery. They are fundamental to maintaining the integrity of the Medicare Advantage program, ensuring accurate risk-adjusted payments, and ultimately, supporting the delivery of appropriate health care to enrollees. Continuous improvement in coding accuracy and compliance mechanisms is essential for all organizations participating in Medicare Advantage.
