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September 2018

Editor's Note: Taking 'Advantage' of Medicare
By Lee DeOrio
For The Record
Vol. 30 No. 8 P. 3

Health care organizations want money. Physicians want money. The federal government wants money. Payers want to get paid. None of those statements is a surprise.

In the midst of this battle to claim a portion of the pie, rules are made to make sure providers are receiving what they deserve. Somewhere amidst this chaos sits the patients.

The latest tug of war centers on Medicare Advantage plans, where, like in most reimbursement situations, documentation makes all the difference. Recently, it came to light that health insurer Anthem earned $102 million in additional Medicare Advantage risk-adjustment payments in 2014 and more than $112 million in 2015. The secret to its success? Retrospective chart review, a process that cost Anthem approximately $18 million each year to carry out.

I'm no math genius, but that seems like a nice tidy return on investment.

Medicare Advantage is set up in such a way that it pays off big time for health care organizations to hire third parties to scour their charts for diagnosis codes that may have been missed. In fact, Anthem's return is a drop in the bucket when compared with the motherlode UnitedHealth Group achieved. According to a whistle-blower lawsuit, UnitedHealth obtained $455 million for 2012, $758 million for 2013, and $882 million for the 2014 payment year in additional Medicare Advantage risk-adjustment payments as a result of its medical record reviews.

Is this practice on the up and up? Despite how it looks, I would argue "yes." If hurried coders don't pick up all valid conditions that affect the managed care organization (MCO) because they don't affect that one specific encounter, then the MCO is right to fill in its missing data. The MCO needs a year's worth of conditions that have been treated in order to assign an accurate risk adjustment factor.

If physician practices, emergency departments, hospitals, and clinics haven't been thorough and accurate in their case-by-case coding, then the MCO could be unfairly impacted when the Centers for Medicare & Medicaid Services (CMS) decides how much to offer per patient for the year.

The real issue is that hierarchical condition category (HCC) coding is new and extremely difficult. For example, if a hospital reports "probable cancer," the coder must code the cancer as if it exists. If the follow-up pathology rules out the cancer and shows a benign tumor, the hospital reports cancer and the follow-up visit reports a benign tumor, but the HCC should report only the benign tumor, which may reduce the final risk adjustment.

Do HCC auditors and MCOs examine consecutive charts in depth, or do they merely add up all the codes for the entire year and pull out the duplicates?

Of course, this could all be a moot point if CMS chooses to tweak the payment system so Advantage plans are not paid more than traditional Medicare fee-for-service providers when they submit additional diagnostic codes.