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Audit (A-02-09-01014)

10-05-2012
Risk Adjustment Data Validation of Payments Made to Excellus Health Plan, Inc., for Calendar Year 2007 (Contract Number H3351)

Executive Summary

The diagnoses that Excellus Health Plan, Inc. (Excellus), submitted to CMS for use in CMS's risk score calculations did not always comply with Federal requirements. As a result of these unsupported diagnoses, Excellus received $158,000 in overpayments from CMS. Based on our sample results, we estimated that Excellus was overpaid approximately $41.6 million in calendar year 2007.

The risk scores calculated using the diagnoses that Excellus submitted for 53 of the 98 beneficiaries in our sample were valid. The risk scores for the remaining 45 beneficiaries were invalid. Medicare Advantage (MA) organizations, including Excellus, submit diagnoses to CMS. CMS categorizes the diagnoses into groups of clinically related diseases called Hierarchical Condition Categories and uses the categories and demographic characteristics to calculate a risk score for each beneficiary. CMS then uses the risk scores to adjust the monthly capitated payments to MA organizations for the next payment period.

The risk scores for the remaining 45 beneficiaries were invalid because the diagnoses were not supported for 1 or more of the following reasons: (1) documentation did not support the associated diagnosis, (2) Excellus did not provide any documentation to support the associated diagnosis, or (3) the diagnosis was unconfirmed.

We recommended that Excellus (1) refund to the Federal Government $158,000 in overpayments identified for the sampled beneficiaries, (2) work with CMS to determine the correct contract-level adjustment for the projected $41.6 million of overpayments, and (3) improve its current practices to ensure compliance with the Federal requirements. Excellus generally disagreed with our findings.

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