What the Inspector General Report on Chart Reviews in Medicare Advantage Says – and Does Not Say

Jeremiah McCoy

Last week, the Office of the Inspector General (OIG) released an analysis on the Centers for Medicare & Medicaid Services (CMS) data regarding Medicare Advantage plans’ use of chart reviews, a tool to confirm a beneficiary’s health risk.

In the analysis, OIG examines the diagnoses submitted solely on review of medical records, also referred to as chart review. These are diagnoses that were not included on claims submitted by providers. In a chart review, plans may delete or add health conditions based on information found in a beneficiary’s medical records.

The findings of the OIG report have been challenged by CMS as inaccurate and incomplete. The report offers recommendations for changes in the processes required by CMS, with which CMS agreed.

In this blog post, Better Medicare Alliance breaks down what the OIG report says and addresses questions raised by this report’s findings and conclusions.

What are chart reviews and what does the OIG study say about their use in Medicare Advantage?

Chart reviews are a CMS tool to support Medicare Advantage plans’ ability to obtain and provide accurate information on patients’ health status from their medical records.

In a chart review, Medicare Advantage plans review a beneficiary’s medical record to ensure that all of the beneficiary’s diagnoses are accurately captured. For example, a patient with both diabetes and cardiac disease might see a cardiologist unrelated to their diabetes. The cardiologist may not include the fact that the patient also has diabetes on the encounter form completed for this appointment. However, during a chart review, a Medicare Advantage plan may find information on the diabetes diagnoses and then include it in the patient’s risk assessment.

In this instance, it is appropriate for the Medicare Advantage plan to add the diagnosis during a chart review to offer a complete picture of the beneficiary’s medical needs. This is important because the Medicare Advantage risk adjustment system is designed to ensure that plans are paid appropriately based on the health status of their members.

The OIG report acknowledges that their study is “limited to a small number of beneficiaries” which may skew its findings. In response, CMS notably disputes some of the results.

Does the OIG report make a judgment on the accuracy of Medicare Advantage chart review data used for the OIG report?

No. The OIG report offered no findings on the accuracy of the data produced by Medicare Advantage chart reviews or medical records. Rather, the OIG report addresses process and administrative changes that CMS can implement to support the Agency’s review of data submissions and chart reviews and not on plan practices or payment changes.

Further, the report indicates that plans use chart reviews as a tool to improve the accuracy of risk adjustment payments consistent with CMS instructions as an allowable function to support more complete and accurate data being submitted to CMS.

Despite no findings of inaccuracies or errors, the study suggests there may be “potential concerns” regarding risk-adjusted payment based on chart review data that is not linked to a specific claim or service. Additional information, however, casts some doubt on these concerns. Specifically:

• In its response to the report, CMS says (see page 35 – 38) that the Agency’s findings on the potential dollar amount of payments to Medicare Advantage that are in question, that  are not linked to a service “seem inaccurate.” Further, CMS stated that OIG’s figures may be inflated by nearly $5 billion since the OIG report did not verify eligible diagnoses when reviewing a medical record, which CMS does.
• OIG acknowledges its study is “limited to a small number of beneficiaries.” The report makes broad observations based on an analysis of a sample size that may not be representative of the full Medicare Advantage population – which stood at over 17 million beneficiaries in 2016 (the year that OIG used for this study). In analyzing only a limited data subset, OIG did not undertake any analysis of the underlying medical records that Medicare Advantage plans reviewed to produce the data in question.
• As reported by OIG, the number of beneficiaries with an unlinked chart review and no service is only 4,000, or less than 0.02% of all enrollees in Medicare Advantage, which provides strong indication that it may be an issue with plans’ ability to link already submitted and accepted Electronic Data Systems data to claims rather than evidence services were not provided.
• OIG has evaluated Medicare Advantage medical record documentation, as in its annual assessment of the Medicare Advantage payment error rate, and found that both the gross and net improper payment error rates have decreased each year over the last five years. In 2019, OIG attributed this to “the submission of more accurate diagnoses by Medicare Advantage organizations.”

Where does Better Medicare Alliance stand?

At the Better Medicare Alliance, we understand that ensuring Medicare Advantage plans receive appropriate payment based on each enrollee’s health status is essential to providing high-quality care and maintaining stability in the program. Medicare Advantage plans must do their part to ensure the risk adjustment data they submit to CMS is accurate, holistic, and reflects the health status of the beneficiaries they serve.

Going forward, BMA will continue to advocate for the continued application of a fee-for-service (FFS) adjustor that accurately reflects the rate of coding errors in the FFS program. In addition, we support the work CMS is doing to improve and evolve the risk adjustment model by phasing in a methodology based fully on encounter data and encourages the work they are doing to ensure the accuracy of this data.

Millions of seniors and individuals with disabilities rely on Medicare Advantage and the care management enabled by the risk-adjusted capitated system of payment. We will continue to work with CMS and other stakeholders across the health care spectrum to improve the accuracy of metrics and processes used to determine Medicare Advantage risk-adjusted payments.

For more information, please see Better Medicare Alliance’s Medicare Advantage risk adjustment white paper, payment validation fact sheet, and encounter data fact sheet.