Introduction
The United States Department of Health and Human Services Office of Inspector General (HHS OIG) recently released an audit report detailing its review of Humana Health Plan, Inc. The audit examined diagnosis codes Humana submitted to the Centers for Medicare and Medicaid Services (CMS) for higher payments under CMS’s risk adjustment program. The findings reveal that Humana received substantial overpayments due to unsupported diagnosis codes, prompting HHS OIG to recommend a significant refund.
Overview of HHS OIG Audit Findings
The HHS OIG conducted an in-depth audit to examine whether Humana’s submissions to CMS complied with federal requirements for risk adjustment payments. The focus was on high-risk diagnosis codes used by Humana in 2017 and 2018. It found substantial discrepancies in these submissions, which, when extrapolated, amounted to an estimated $13.1 million in overpayments from CMS to Humana.
Details of CMS Overpayments
High-Risk Diagnosis Codes
In the risk adjustment process, certain diagnosis codes indicate a higher risk of medical expenses and thus qualify for higher payments. It focused on eight specific high-risk diagnosis groups for which Humana claimed additional CMS payments. These codes represented conditions that typically require more complex and costly care.
Audit Sampling and Results
To evaluate the accuracy of Humana’s submissions, HHS OIG selected a stratified random sample of 240 unique enrollee-years. In this sample, it reviewed $642,816 of payments associated with high-risk diagnosis codes.
For 202 of these 240 enrollee-years, the selected diagnosis codes submitted to CMS were not adequately supported by medical records. This discrepancy led to an estimated $497,225 in overpayments in the sampled group. Extrapolating from the sample, it estimated that Humana received at least $13.1 million in total overpayments for 2017 and 2018.
HHS OIG’s Recommendations for Humana
Based on its findings, HHS OIG made several recommendations to Humana:
1. Refund $6.8 Million to CMS: Although the overall estimated overpayment was $13.1 million, federal regulations limit the extrapolation of findings for certain recovery purposes. Therefore, HHS OIG recommended that Humana refund $6.8 million to CMS—$274,151 for 2017 and $6,503,234 for 2018.
2. Improve Compliance Processes: HHS OIG advised Humana to enhance its internal compliance processes to prevent future errors. By implementing stronger verification systems, Humana could ensure that high-risk diagnosis codes are accurately reported.
3. Identify Additional Non-Compliant Instances: HHS OIG recommended that Humana conduct further reviews of high-risk diagnosis codes from the audited period and beyond. Any additional overpayments identified should be refunded to CMS.
Humana’s Response to the HHS OIG Audit
Humana did not fully agree with its findings and recommendations. The company contested both the audit methodology and the overpayment estimation process. Specifically, Humana disagreed with the errors identified for 33 enrollee-years and provided supplementary information to HHS OIG. After reviewing this additional data, it made adjustments to the audit, reducing the number of enrollee-years classified as errors and modifying the recommended refund amount accordingly.
Despite these adjustments, HHS OIG upheld its conclusions regarding the need for compliance improvements and for Humana to address non-compliance for high-risk diagnosis codes.
Implications for Compliance and Risk Adjustment
The audit underscores the importance of compliance in CMS’s risk adjustment programs. The findings suggest that Medicare Advantage organizations like Humana must maintain rigorous documentation and verification processes to ensure accurate diagnosis coding. For insurers, this serves as a reminder to:
Invest in Compliance Infrastructure: Strengthening data validation and audit processes is crucial for meeting CMS requirements and avoiding overpayments.
Enhance Documentation Standards: Proper documentation supports each diagnosis code submitted to CMS, reducing the risk of discrepancies.
Regularly Audit Coding Practices: By conducting internal audits, companies can proactively identify potential compliance gaps and address them before they become issues.
Conclusion
The HHS OIG’s audit of Humana highlights critical areas for improvement in diagnosis code accuracy and compliance with CMS risk adjustment regulations. For insurers, these findings underscore the importance of accurate documentation and compliance in submitting diagnosis codes for Medicare Advantage programs, which ultimately helps maintain the integrity of CMS’s risk adjustment model.
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FAQs
Q1: What prompted HHS OIG to audit Humana?
Ans: The audit focused on high-risk diagnosis codes submitted by Humana for CMS payments in 2017 and 2018. HHS OIG aimed to assess whether these codes complied with federal requirements under the CMS risk adjustment program.
Q2: How much did HHS OIG recommend Humana refund?
Ans: HHS OIG recommended that Humana refund $6.8 million of the estimated $13.1 million in overpayments.
Q3: Did Humana agree with HHS OIG’s findings?
Ans: No, Humana disagreed with some of the findings, particularly regarding the audit methodology and the classification of certain errors. The company provided additional data, which led to a partial reduction in the recommended refund amount.
Q4: What are high-risk diagnosis codes?
Ans: High-risk diagnosis codes are specific codes that indicate conditions requiring more complex care. These codes qualify for higher CMS payments due to their associated healthcare costs.
Q5: How does this audit affect Humana’s future compliance practices?
Ans: The audit findings emphasize the need for improved compliance procedures. HHS OIG has recommended that Humana enhance its internal processes to prevent similar issues in the future.
