Introduction
Medicare Advantage (MA) plans have grown to play a major role in senior healthcare in the U.S., but recent federal scrutiny has raised questions regarding payment practices. A new report from the Department of Health and Human Services Office of Inspector General (OIG) suggests that some MA insurers, including UnitedHealth Group and Humana, may have leveraged health risk assessments and chart reviews to secure inflated Medicare payments through a process called upcoding. With billions at stake, federal watchdogs, insurers, and policymakers are taking steps to address and debate the value of home health assessments in Medicare Advantage.
Medicare Advantage and Home Visits: An Overview
The Role of Health Risk Assessments and Chart Reviews
Health risk assessments, particularly those conducted during at-home visits, are used to gather a comprehensive picture of a patient’s health. By performing these assessments, Medicare Advantage plans aim to identify conditions that may require additional care or pose future risks. These assessments often result in risk-adjusted payments, where MA insurers receive higher compensation from Medicare to cover anticipated healthcare needs based on patient health status.
Chart reviews, often accompanying these assessments, have come under scrutiny because they don’t always coincide with other documented medical services. As these reviews and at-home visits contribute to risk-adjusted payments, they play a substantial role in MA insurers’ revenues.
Federal Watchdog Concerns and Allegations of Upcoding
The OIG report has raised concerns that some MA insurers may be inflating diagnosis codes (upcoding) to secure higher Medicare reimbursements. According to the report, upcoding may have contributed to $7.5 billion in risk-adjusted payments in 2023, despite limited clinical documentation of these diagnoses beyond chart reviews. Skepticism arises from the fact that for some enrollees, these assessments didn’t result in follow-up treatments, casting doubt on the accuracy and necessity of certain diagnoses.
12 Key Updates on Medicare Advantage and Federal Concerns
1. Impact of the February Report from HHS OIG
The February 2024 OIG report highlighted $7.5 billion in risk-adjusted payments, primarily based on chart reviews and health assessments without follow-up documentation. The report criticized the prevalence of these practices, suggesting that more oversight is needed to ensure that Medicare payments truly reflect patient needs.
2. Financial Implications of Home Visits in Risk Adjustments
Home visits accounted for $4.2 billion of total Medicare payments, with MA insurers earning an average of $1,869 per home visit compared to just $365 per facility-based chart review. This discrepancy suggests that insurers are receiving more from at-home assessments, which may incentivize their use of in-facility services.
3. UnitedHealth Group’s Dismissal of Federal Findings
UnitedHealth Group, which received the highest share of these risk-adjusted payments at $3.73 billion, has disputed the OIG’s findings. According to a UnitedHealth spokesperson, at-home visits are instrumental in providing comprehensive assessments and follow-up care to Medicare Advantage enrollees. UnitedHealth asserts that the majority of home visits do not increase risk adjustment payments and that these assessments often yield valuable health insights.
4. Other Major Insurers in the Spotlight
Humana received $1.71 billion in risk-adjustment payments in 2023. They maintain that their health risk assessments enhance primary care services by directing patients back to their primary providers for needed follow-up care.
5. Cigna, SCAN, and Alignment’s Payouts in Top Five
Other companies, including Cigna, SCAN Health Plan, and Alignment Healthcare, rounded out the top five recipients of risk-adjusted payments, with payouts of $237 million, $128 million, and $60 million, respectively. These companies have not responded to the report.
6. Conditions Predominantly Driving Medicare Advantage Payments
The OIG report noted that just 13 health conditions accounted for 75% of the risk-adjusted payments. Leading this list were vascular disease, major depressive disorders, and chronic conditions like diabetes and chronic obstructive pulmonary disease (COPD). For these conditions, at-home visits were often used as the primary documentation method, raising concerns about the reliability of such assessments.
Reactions from Insurers and Federal Recommendations
7. UnitedHealth’s Response and Defense of At-Home Visits
UnitedHealth has countered claims that its at-home assessments lead to unnecessary risk adjustments. A spokesperson emphasized that the home visits, which typically last 45-60 minutes, involve highly trained clinicians who conduct detailed evaluations of patients’ health and environments, aiming to identify essential follow-up care. UnitedHealth also cited its positive performance in CMS audits to refute allegations of upcoding.
8. Humana’s Commitment to Transparency and Compliance
Humana echoed similar sentiments, emphasizing its dedication to transparency in risk adjustment and compliance with CMS guidelines. They stated that risk assessments conducted by Humana support primary care physicians and facilitate better care outcomes. Humana has expressed its intention to work closely with CMS to improve health risk assessment accuracy.
9. The Wall Street Journal’s Investigation on Upcoding
The Wall Street Journal’s July 2024 investigation alleged that both UnitedHealth and Humana used at-home assessments to make patients appear sicker, potentially inflating Medicare payments by $50 billion. This claim further fueled discussions on upcoding practices, with both insurers denying the allegations and affirming the importance of comprehensive assessments for quality patient care.
10. Federal Recommendations and Calls for Increased Scrutiny
The OIG has advised CMS to implement stricter guidelines on diagnoses reported through at-home chart reviews. The recommendation includes conducting audits and verifying the accuracy of conditions flagged during these assessments. CMS has not adopted all recommendations but agreed to review certain conditions prone to upcoding.
Conclusion
The ongoing debate around Medicare Advantage payments highlights the need for a balanced approach that prioritizes patient care without inflating costs. Federal watchdogs remain skeptical of the current structure, while insurers defend the value of at-home assessments in improving healthcare access and outcomes for seniors. As scrutiny increases, Medicare Advantage plans may see regulatory changes that promote greater transparency and accountability. For now, the conversation continues, with policymakers and insurers working to find a sustainable solution that safeguards Medicare’s integrity.
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Frequently Asked Questions (FAQs)
1. What is upcoding in Medicare Advantage?
Ans: Upcoding occurs when healthcare providers assign a more severe diagnosis code to secure higher Medicare payments. In the context of Medicare Advantage, it’s suspected that some insurers may use at-home visits and chart reviews to report riskier diagnoses, leading to inflated payments.
2. Why are at-home visits used in Medicare Advantage assessments?
Ans: At-home visits allow clinicians to conduct thorough health assessments, often uncovering conditions that may not be apparent in brief clinical encounters. These visits can help identify needed follow-up care but have come under scrutiny for potentially contributing to inflated Medicare payments.
3. How much did Medicare Advantage pay insurers for at-home assessments?
Ans: Medicare paid approximately $4.2 billion for at-home visits in fiscal year 2023, with insurers receiving significantly higher payments for these assessments compared to facility-based chart reviews.
4. How are federal agencies responding to the OIG report?
Ans: Federal agencies, including CMS, are considering measures to increase oversight of at-home assessments. While not all OIG recommendations have been adopted, CMS is evaluating ways to enhance scrutiny on conditions frequently upcoded during chart reviews.
