Rates of Estimated Payments From Chart Reviews and Health Risk Assessments Across Medicare Advantage Organizations

The Medicare Advantage (MA) program provided coverage to 23 million beneficiaries in 2019 at a cost of $264 billion. CMS risk-adjusts these payments by using beneficiaries' diagnoses to pay higher capitated payments to MA organizations (MAOs) for beneficiaries expected to have greater health care needs. This payment policy may create financial incentives for MAOs to misrepresent beneficiaries' health status and make them appear to have additional illnesses and other conditions that would command higher payment. A previous OIG evaluation identified $6.7 billion in estimated 2017 risk-adjusted payments resulting from diagnoses that MAOs reported only on chart reviews, and not on any records of services provided to beneficiaries in 2016. Findings from this evaluation raise concerns about the completeness of payment data that MAOs submit to CMS, the validity of diagnoses on chart reviews, and the quality of care provided to beneficiaries. A current OIG evaluation examines the extent to which diagnoses solely generated by health risk assessments (HRAs) were associated with higher risk scores and higher MA payments. We will combine data from these evaluations to perform new analyses that will determine whether certain MAOs and parent organizations had higher or lower amounts of risk-adjusted payments from both chart reviews and HRAs relative to their peers.

Announced or Revised	Agency	Title	Component	Report Number(s)	Expected Issue Date (FY)
August 2020	Centers for Medicare and Medicaid Services	Rates of Estimated Payments From Chart Reviews and Health Risk Assessments Across Medicare Advantage Organizations	Office of Evaluation and Inspections	OEI-03-17-00474	2021