Yet Another Medicare Advantage Cheating Scheme

July 6, 2021

Medicare Advantage Chart Reviews Are Associated With Billions in Additional Payments for Some Plans
Medical Care
February, 2021
By David J. Meyers and Amal Trivedi.  

From the Abstract: 

Background: In the Medicare Advantage (MA) program, private plans receive capitated payments that are adjusted based on their enrollees’ number and type of clinical conditions. Plans have the ability to review charts to identify additional conditions that are not present in claims data, thereby increasing risk-adjusted payments.. . .

Results: Chart reviews were associated with a $2.3 billion increase in payments to plans, a 3.7% increase in Medicare spending to MA plans. Just 10% of plans accounted for 42% of the $2.3 billion in additional spending attributed to chart review. Among these plans, the relative increase in risk score from chart review was 17.2%. For-profit plans engaged in chart reviews substantially more frequently than nonprofit plans.

Comment by David Himmelstein and Steffie Woolhandler

It’s long been known that Medicare Advantage (MA) plans selectively recruit low-cost Medicare enrollees and evict the expensively-ill, such as those who require nursing home care. As a result, Medicare pays MA plans 4% more than it would cost to care for their patients in the traditional Medicare program.

In response, CMS has tried to risk adjust MA plan premiums based on patients’ diagnoses. MA plans have counter-attacked by pressing clinicians to more assiduously code every diagnosis that might raise the risk score. That’s entirely legal. But this study shows that they’ve  gone even further than that, combing through patients’ medical records for possible indicators of diagnoses that physicians never entered as actual diagnoses. So if, for instance, a doctor never mentioned renal failure, but noted a slightly high creatinine level on one blood test (which might have come down on a subsequent test), that might trigger an MA plan to claim the extra payment for renal failure.

After 40 years of unsuccessful attempts to rein-in MA plans’ profit-driven efforts to cheat the taxpayers, it’s time to end the MA program and return to fully public Medicare.