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Medicare Advantage Compliance Audit of Specific Diagnosis Codes That MediGold (Contract H3668) Submitted to CMS

Issued on  | Posted on  | Report number: A-07-20-01198

Why OIG Did This Audit

Under the Medicare Advantage (MA) program, the Centers for Medicare & Medicaid Services (CMS) makes monthly payments to MA organizations according to a system of risk adjustment that depends on the health status of each enrollee. Accordingly, MA organizations are paid more for providing benefits to enrollees with diagnoses associated with more intensive use of health care resources than to healthier enrollees, who would be expected to require fewer health care resources.

To determine the health status of enrollees, CMS relies on MA organizations to collect diagnosis codes from their providers and submit these codes to CMS. Some diagnoses are at higher risk for being miscoded, which may result in overpayments from CMS.

For this audit, we reviewed one MA organization, MediGold, and focused on seven groups of high-risk diagnosis codes. Our objective was to determine whether selected diagnosis codes that MediGold submitted to CMS for use in CMS's risk adjustment program complied with Federal requirements.

How OIG Did This Audit

We selected a stratified random sample of 210 unique enrollee-years with the high-risk diagnosis codes for which MediGold received higher payments for 2017 through 2018. We limited our review to the portions of the payments that were associated with these high-risk diagnosis codes, which totaled $567,570.

What OIG Found

With respect to the seven high-risk groups covered by our audit, most of the selected diagnosis codes that MediGold submitted to CMS for use in CMS's risk adjustment program did not comply with Federal requirements. Specifically, for 189 of the 210 sampled enrollee-years, the medical records that MediGold provided did not support the diagnosis codes and resulted in $469,907 in net overpayments. As demonstrated by the errors found in our sample, MediGold's policies and procedures to prevent, detect, and correct noncompliance with CMS's program requirements could be improved. On the basis of our sample results, we estimated that MediGold received at least $3.7 million of net overpayments for 2017 and 2018. Because of Federal regulations that limit the use of extrapolation in Risk Adjustment Data Validation audits for recovery purposes to payment years 2018 and forward, we are reporting the overall estimated overpayment amount but are recommending a refund of $2.2 million in net overpayments ($224,001 for the sampled enrollee-years from 2017 and an estimated $2 million for 2018).

What OIG Recommends and MediGold Comments

We recommend that MediGold: (1) refund to the Federal Government the $2.2 million of estimated net overpayments; (2) identify, for the high-risk diagnoses included in this report, similar instances of noncompliance that occurred before and after our audit period and refund any resulting overpayments to the Federal Government; and (3) continue its examination of its existing compliance procedures to identify areas where improvements can be made to ensure that diagnosis codes that are at high risk for being miscoded comply with Federal requirements and take the necessary steps to enhance those procedures.

MediGold disagreed with some of our findings and requested that we withdraw all of our recommendations. Specifically, MediGold did not agree with our findings for 30 of the 194 enrollee-years in error identified in our draft report and provided additional information for our consideration. MediGold did not directly agree or disagree with our findings for the remaining 164 enrollee-years. MediGold did not agree with our audit methodology, use of extrapolation, standards for data accuracy, and medical record review process. After reviewing MediGold's comments and the additional information MediGold provided, we reduced the number of enrollee-years in error and revised the amount in our first recommendation. We maintain that our second and third recommendations remain valid.

Centers for Medicare and Medicaid Services
Contracts Managed Care Financial Stewardship
Medicare C