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Risk Adjustment Priorities: Connecting Medicare Advantage Supplemental Data & Encounter Data

After the November release of the Office of the Inspector General of the U.S. Department of Health and Human Services (OIG) report, 2022 Top Unimplemented Recommendations for HHS programs, I wrote a LinkedIn post about the Medicare Advantage-related recommendations. Recommendations that should capture the attention of all MAOs.

The OIG found that MAOs use retrospective chart reviews and prospective in-home assessments to supplement encounter data for calculating risk scores. A 2021 OIG report states, "Unsupported risk-adjusted payments have been a major driver of improper payments in the Medicare Advantage program."

One OIG recommendation is for CMS to monitor and provide oversight for MAOs with a disproportionate share of chart review and HRA risk-adjusted payments. This likely wasn’t a surprise to many. For several years, OIG has shared large health plan audit findings and expressed concern about retrospective chart reviews.

Review completeness, accuracy, and two-way coding garner the most attention. For in-home assessments, allegations include providers not showing up, conducting an unrealistic number of assessments, and making diagnoses without the appropriate equipment or training.

Risk adjustment processes under scrutiny

Headlines about OIG and DOJ allegations and settlements abound. OIG investigates claims resulting in $14.5M in overpayments. Department of Justice files False Claims act lawsuit. The Supreme Court denies an MAO’s petition challenging CMS’ overpayment rule.

The OIG conducts targeted audits of health plans, which differ from CMS Risk Adjustment Data Validation (RADV) audits. These audits can include site visits to review the plan’s risk adjustment process, coding, policies and procedures, and sample submission data.

Writing about the OIG’s September 2021 report, The National Law Review notes, “…both OIG and the U.S. Department of Justice (DOJ) have indicated that MA plans are a priority focus for False Claims Act enforcement…OIG and DOJ leadership have expressly stated that their enforcement priorities include MA plans that, in the government’s view, improperly manipulate the risk adjustment process.

Late last year, Better Medicare Alliance issued recommendations regarding MA. The group’s mission is to build a healthy future by advocating for a strong Medicare Advantage. They recommend annual CMS RADV audits of every Medicare Advantage plan. CMS already does this for plans participating in the ACA marketplace. They also recommend implementing best practices for in-home HRAs to ensure quality and value to MA beneficiaries.

With more focus and attention from government agencies and advocacy groups on overpayments in the Medicare Advantage risk adjustment program, MAOs can expect future CMS guidance.

Monitoring & re-evaluation is a continuous process

Connecting data is the #1 problem behind this issue. As I wrote on LinkedIn, there are practices MAOs need to consider and, ideally, adopt. First and foremost, continuously monitor your ability to link supplemental data to encounters. It’s required within ACA risk adjustment and could be applied to Medicare Advantage. Determining when and where additional information was identified is imperative.

HHS guidance for ACA supplemental diagnoses codes explains that codes can be submitted when relevant diagnoses are missing or omitted in claims or encounters. They must be linked to a previously submitted and accepted claim and related to services performed during the visit.  At Pareto Intelligence, we anticipate greater emphasis from CMS on supplemental claims linking in the future.

Beyond the ability to link data, a holistic risk adjustment strategy that facilitates complete and precise documentation during the point of care is critical. MAOs can gain meaningful insights that validate practices and identify opportunities for course corrections. It’s essential to assess whether your risk adjustment programs are solely intended to support risk score improvement or do they also support risk score accuracy.

Mitigating exposure

Regularly re-evaluating your risk adjustment strategy ensures you take the appropriate steps to mitigate potential exposure to audit findings. The OIG report didn’t uncover wrongdoing. As the National Law Review article notes, “There is nothing inherently suspect with MA companies conducting chart reviews and HRAs that result in accurate risk adjustments.”

Feel free to contact me to learn more about risk accuracy and what Medicare Advantage organizations can do to improve their risk adjustment process.

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