Medicare Advantage Compliance Audit of Specific Diagnosis Codes That UCare Minnesota (Contract H2459) Submitted to CMS

Why OIG Did This Audit

• Under the Medicare Advantage (MA) program, CMS makes monthly payments to MA organizations based in part on the health status of the enrollees being covered.
• To determine the health status of enrollees, CMS relies on MA organizations to collect diagnosis codes from its providers and submit these codes to CMS. Some diagnoses are at higher risk for being miscoded, which may result in overpayments from CMS.
• This audit of UCare Minnesota (UCare) is part of a series of audits in which we are reviewing high-risk diagnosis codes that MA organizations submitted to CMS for use in its risk adjustment program.

What OIG Found

Most of the selected diagnosis codes that UCare submitted to CMS for use in CMS’s risk adjustment program did not comply with Federal requirements.

• For 254 of the 294 sampled enrollee-years, the medical records that UCare provided did not support the diagnosis codes and resulted in $869,498 in net overpayments.
• On the basis of our sample results, we estimated that UCare received at least $4.7 million in net overpayments for 2018 and 2019.

As demonstrated by the errors found in our sample, UCare’s policies and procedures to prevent, detect, and correct noncompliance with CMS’s program requirements, as mandated by Federal regulations, could be improved.

What OIG Recommends

We recommend that UCare:

1. refund to the Federal Government the $4.7 million of estimated net overpayments;
2. identify, for the high-risk diagnoses included in this report, similar instances of noncompliance that occurred before or 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 diagnoses that are at high risk for being miscoded comply with Federal requirements (when submitted to CMS for use in CMS’s risk adjustment program) and take the necessary steps to enhance those procedures.

UCare disagreed with some of our findings and all of our recommendations.