News Analysis by Tim Rowan
May 20, 2019 — U.S. Department of Justice Office of Public Affairs News Bulletin — An owner of a now-defunct Miami, Florida, home health care agency was sentenced today to 30 months in prison for his participation in a scheme that caused Medicare to pay approximately $1 million in false and fraudulent claims for home health care services that were never provided. 1
February 27, 2019 — U.S. Department of Justice Office of Public Affairs News Bulletin — A home health services company owner and a co-conspirator, both Miami, Florida residents, were sentenced to prison today for their roles in a $8.6 million health care fraud scheme. the owner of T.L.C. Health Services of Miami, was sentenced to serve 87 months in prison. 2
December 17, 2018 — U.S. Department of Justice Office of Public Affairs News Bulletin — A Miami, Florida-area woman was sentenced to 78 months in prison to be followed by three years of supervised release today for her role in a $4.65 million health care fraud scheme involving three home health agencies that purported to provide home health services to Medicare patients. 3
December 10, 2019 — U.S. Department of Health and Human Services Office of Inspector General — Billions in Estimated Medicare Advantage Payments From Chart Reviews Raise Concerns
There are dozens of news bulletins like the first three above but the fourth one, released Tuesday, is the first of its kind. Before going on, read these samples again. The pertinent phrases are not underlined or italicized but they certainly stand out to the trained eye. 30 months, 87 months, 78 months, "concerns." The message could not be clearer. If you operate a home health agency, even a fraudulent one, and your name is Margarita Palomino or Norma Zayas or Dennys Hernandez, you will be issued an orange jumpsuit. If you operate an honest agency and occasionally submit clinical documentation with some errors in it, you may not be paid for an episode of care, perhaps even fined.
If, on the other hand, your name is David S. Wichmann and your title is CEO of UnitedHealth Group, Inc., you will "raise concerns." 4
Notice one other little difference: $1 million, $8.6 million, $4.65 million, $Billions. Specifically, the OIG report identified $2.7 billion in payments for services to MA beneficiaries that were never rendered.
United was sued in early 2017 by the Justice Department in United States District Court in Los Angeles, but Tuesday's OIG report named the practice as widespread. The report explains the exploited provision in MA regulations and exactly how the fraudulent billing is perpetrated:
"The risk adjustment program is an important Medicare Advantage payment mechanism. It levels the playing field for MA organizations that enroll sicker beneficiaries who need a more costly level of care. This helps to ensure that sicker beneficiaries have continued access to MA plans. Chart reviews can be a tool to improve the accuracy of risk-adjusted payments by allowing MAOs to add and delete diagnoses in the encounter data based on reviews of patients' records. However, chart reviews—particularly those not linked to service records—may provide MAOs opportunities to circumvent the CMS face-to-face requirement and inflate risk-adjusted payments inappropriately."
So far, it sounds like the chart review program is a necessary provision to ensure MAOs are properly compensated for caring for sicker patients. Then there is the next OIG paragraph: (emphasis added)
"Our findings highlight potential issues about the extent to which chart reviews are leveraged by MAOs and overseen by CMS. Based on our analysis of MA encounter data, we found that:
- MAOs almost always used chart reviews as a tool to add, rather than to delete, diagnoses — over 99 percent of chart reviews in our review added diagnoses
- Diagnoses that MAOs reported only on chart reviews — and not on any service records — resulted in an estimated $6.7 billion in risk-adjusted payments for 2017. 5
- CMS based an estimated $2.7 billion in risk-adjusted payments on chart review diagnoses that MAOs did not link to a specific service provided to the beneficiary?much less a face-to-face visit.
- Although limited to a small number of beneficiaries, almost half of MAOs reviewed had payments from unlinked chart reviews where there was not a single record of a service being provided to the beneficiary in all of 2016.
In its response to a whistleblower complaint filed by an employee familiar with the company's billing practices, a UnitedHealth spokesperson said, "the lawsuit showed that the Justice Department 'fundamentally misunderstands, or is deliberately ignoring, how the Medicare Advantage program works.'" He added that "reviewing patients' charts and correcting errors was 'an appropriate and expected part of the Medicare Advantage program,' and that questions about such activities 'reflect at most a policy disagreement.'"
The whistleblower, James Swoben, informed investigators that United's data analysis flagged opportunities to add diagnoses during chart reviews but ignored instances where the review might have removed diagnoses and lowered payments. Some of the complaints were dismissed by a federal judge in February, 2018 but the department continues to pursue Swoben's accusations about what the suit calls "one-way" chart reviews.
With this as a background, the HHS OIG's December 10 report — that nearly all MA organizations add diagnoses during chart reviews but do not add corresponding services — takes on added significance. What follows is the OIG summary of its report. A link to the complete report can be found below. 4
We undertook this study because of concerns that Medicare Advantage organizations (MAOs) may use chart reviews to increase risk adjusted payments inappropriately. Unsupported risk adjusted payments are a major driver of improper payments in the Medicare Advantage (MA) program, which provided coverage to 20 million beneficiaries in 2018 at a cost of $210 billion. CMS risk-adjusts payments using beneficiaries' diagnoses to pay higher capitated payments to MAOs for sicker beneficiaries?which may create financial incentives for MAOs to make beneficiaries appear as sick as possible. MAOs report these diagnoses via CMS's MA encounter data system based on services and chart reviews (i.e., MAO's reviews of a beneficiary's medical record to identify diagnoses that a provider did not submit or submitted in error). For a diagnosis to be eligible for risk adjustment, it must be documented in a medical record as a result of a face to face visit. Although CMS requires MAOs to identify chart reviews in the encounter data, CMS does not require MAOs to link these chart reviews to a specific service associated with the diagnoses. This may provide MAOs opportunities to circumvent CMS' face-to-face requirement and inflate risk adjusted payments inappropriately.
We analyzed 2016 MA encounter data to determine the 2017 financial impact of diagnoses reported only on chart reviews and not on any service record in the encounter data that year. We also analyzed CMS's responses to a structured questionnaire to identify action taken by CMS to review the impact of chart reviews on MA payments.
Our findings highlight potential issues about the extent to which chart reviews are leveraged by MAOs and overseen by CMS. Based on our analysis of MA encounter data, we found that MAOs almost always used chart reviews as a tool to add, rather than to delete, diagnoses-over 99 percent of chart reviews in our review added diagnoses. In addition, diagnoses that MAOs reported only on chart reviews-and not on any service records-resulted in an estimated $6.7 billion in risk-adjusted payments for 2017. CMS based an estimated $2.7 billion in risk adjusted payments on chart review diagnoses that MAOs did not link to a specific service provided to the beneficiary-much less a face to-face visit. Although limited to a small number of beneficiaries, almost half of MAOs reviewed had payments from unlinked chart reviews where there was not a single record of a service being provided to the beneficiary in all of 2016. Our findings raise potential concerns about the completeness of payment data submitted to CMS, the validity of diagnoses on chart reviews, and the quality of care provided to beneficiaries.
Despite the potential for MAOs to misuse chart reviews, CMS has not reviewed the financial impact of chart reviews in the encounter data on risk adjusted payments. CMS also has not yet performed audits that validate diagnoses reported on chart reviews in the encounter data against beneficiaries' medical records. CMS reported that it plans to begin audits that would include such chart reviews later this year.
We recommend that CMS:
CMS concurred with these recommendations.
5 "CMS's actual risk-adjusted payments to MAOs incorporate diagnoses from both Risk Adjustment Processing System (RAPS) data and encounter data; however, there is no method to identify which diagnoses in the RAPS data are from chart reviews. Risk-adjustment-eligible diagnoses in the encounter data should be in the RAPS data. If MAOs submitted any eligible diagnoses from chart reviews only in the RAPS or only in the encounter data system, our payment estimates could underestimate or overestimate the actual risk-adjusted payments resulting solely from diagnoses on chart reviews."
©2019 by Rowan Consulting Associates, Inc., Colorado Springs, CO. All rights reserved. This article originally appeared in Tim Rowan's Home Care Technology Report. homecaretechreport.com One copy may be printed for personal use; further reproduction by permission only. firstname.lastname@example.org