You should expect to see Medicare providing more oversight and audits on chart reviews, specifically ones that result in additional patient diagnoses and payment. A U.S. Department of Health and Human Services Office of Inspector General (OIG) December 2019 report has raised concerns over billions of dollars in Medicare Advantage payments generated from chart reviews.

Many chronically ill patients who require a more costly level of care rely on Medicare’s risk adjustment program. While chart reviews can help improve the accuracy of payments for these patients, sometimes Medicare Advantage Organizations (MAOs) use these to inflate the payments.

The OIG reports that “diagnoses that MAOs reported only on chart reviews — and not on any service records — resulted in an estimated $6.7 billion in risk-adjusted payments for 2017.”

Medicare Advantage Payments From Chart Reviews Under Scrutiny

A chart contains patient information including demographics, vitals, visit notes, blood labs, imaging and x-rays, progress notes, and other pertinent information, which all affect how much time it takes to care for, treat, and counsel the patient. During a chart review, MAOs’ review this documentation to add diagnoses that haven’t been submitted or delete a diagnosis that doesn’t belong.

Because CMS pays higher rates to MAOs for sicker beneficiaries with higher risk scores, this could open the door for fraudulent diagnosis on chart reviews — to get paid more by making the patient look sicker than he/she is. CMS estimated that Medicare paid $40 billion in unsupported overpayments from 2013-2016.

A key finding in this report is that MAOs almost always used chart reviews as a tool to add, rather than to delete, diagnoses. CMS has two specific requirements for a diagnosis to be eligible for risk adjustment.

The diagnosis must be documented in the medical record by a medical professional in the proper setting during the prior year, and it must be documented as a result of a face-to-face visit. The OIG report raises concerns that a lack of oversight may give MAOs a means to circumvent these requirements.

Specifically, the report found that “CMS based an estimated $2.7 billion in risk-adjusted payments on chart review diagnoses that MAOs did not link to a specific service provided to the beneficiary ― much less a face-to-face visit.”

Unlinked Chart Reviews

While CMS allows MAOs to submit additional diagnoses, all diagnoses submitted on unlinked chart reviews are supposed to be supported by medical record documentation from a face-to-face visit with the beneficiary.

While this didn’t apply to several beneficiaries, almost half of MAOs reviewed had payments from unlinked chart reviews where there was not a single record of a service being provided to the beneficiary in all of 2016.

OIG recommended that Medicare should reassess the risks and benefits to allowing unlinked chart reviews to be used as sources of diagnoses for risk adjustment.

Primary Concerns

The three main concerns of this report are that:

• the data MAOs are submitting isn’t entirely accurate,
• risk-adjusted payments could be inappropriate if the diagnosis is inaccurate or unsupported, and
• beneficiaries might not be receiving the proper care.

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