OIG Investigates SCAN Health for Risk Adjustment Overpayments With Surprising Results

July 26th, 2022 - Aimee L. Wilcox, CPMA, CCS-P, CST, MA, MT
Categories:   Office of Inspector General (OIG)   Risk Adjustment   
1 Vote - Sign in to vote or comment.

Risk adjustment plans are widespread but most often thought of in terms of the Medicare Advantage (MA) programs offered through CMS and managed by private insurance payers. CMS contracts with these MA organizations that provide benefits to Medicare beneficiaries and also provide payment to the MA organizations, are a combination of a base Medicare payment per beneficiary and an additional payment based on the individual risk score of each beneficiary. Depending on the costs of healthcare services accessed during the year, the payer may either incur losses or realize profits from the program. As the base Medicare beneficiary payment is set annually, the only variable that can increase payment per beneficiary is the individual beneficiary's health risk score. 

The health risk score is calculated based on the enrollee’s demographics (e.g., gender, age) and health status. The enrollee’s health status is determined by the various diagnoses assigned to them by acceptable healthcare provider types who have rendered healthcare services to them during the year. MA organizations collect these diagnosis codes from provider billing and identify associated medical records within the specified timeframe that support the documented diagnoses reported. CMS is obligated to perform risk adjustment data validation audits to ensure the right types of providers have performed approved services and documented the diseases the payers have reported to CMS. In essence, they are validating the codes reported that are actually supported by the beneficiary’s medical record. Risk adjustable ICD-10-CM codes are assigned to a Hierarchical Condition Categories (HCCs) code, which in turn has an assigned risk value. The combination of all valid HCCs added together along with the demographic information equals the patient’s overall risk score, which is then calculated to determine a risk score payment that is paid to the MA organization, along with the base Medicare beneficiary payment. The sum of these two components is used to pay for the medical expenses based on enrollee benefits for the year. SCAN, an MA organization headquartered in Long Beach, California, provides coverage to approximately 179,000 Medicare beneficiaries to the tune of approximately $1.9 billion in CMS payments. The Office of Inspector General (OIG) recently audited SCAN Health for potential Risk Adjustment overpayments related to 200 enrollees for which they received payment during the 2015 payment year.

As is typical, the OIG used an independent medical review contractor to perform the risk adjustment data validation (RADV) audit and published the results of their findings. The audit included a review of 1,577 HCC codes for 200 enrollees. Of these HCCs, the OIG validated 1,413, and identified 41 additional HCCs of lesser value that SCAN Health had failed to report, but gave them credit for making the total validated 1,454 out of 1,577, resulting in an overpayment of $54,318.154. 

As always, it is a great exercise for MA organizations to review the details of RADV audits to identify and learn from the RADV auditor’s approach to certain ICD-10 codes and HCC supporting documentation. It is also very important that any MA organization being audited also perform an audit of the RADV auditor’s findings to ensure accuracy and, if possible, identify evidence to support the reporting of each HCC code. 

###

Questions, comments?

If you have questions or comments about this article please contact us.  Comments that provide additional related information may be added here by our Editors.


Latest articles:  (any category)

Medicare Updates -- SNF, Neurostimulators, Ambulance Fee Schedule and more (2022-10-20)
October 27th, 2022 - CMS - MLNConnects
Skilled Nursing Facility Provider Preview Reports: Review by November 14 - Help Your Patients Make Informed Health Care Decisions - Ambulance Fee Schedule: CY 2023 Ambulance Inflation Factor & Productivity Adjustment - Compliance - Implanted Spinal Neurostimulators: Document Medical Records - Claims, Pricers, & Codes...
2023 Evaluation & Management Updates Free Webinar
October 24th, 2022 - Aimee Wilcox
Congratulations on a successful 2021 implementation of the Evaluation and Management (E/M) changes! That was a big change, but now an even bigger change is headed your way for inpatient and all other E/M categories. How great is it that almost all of the E/M categories will now be scored based on medical decision making (MDM) or total provider time? Standardized scoring and one set of E/M guidelines has the potential of bringing about a change or improvement of provider fatigue due to over regulation and documentation burden.
Are Leading Queries Prohibited by Law or Lore?
October 13th, 2022 - Erica E. Remer
AHIMA released its CDI Practice Brief Monday. At Yom Kippur services, I found myself thinking about the question Dr. Ronald Hirsch posed to me the day before. My rabbi was talking in her sermon about the difference between halacha and minhag. Halacha is law; it is the prescriptions...
2023 ICD-10-CM Guideline Changes
October 13th, 2022 - Chris Woolstenhulme
View the ICD-10-CM Guideline Changes for 2023 Chapter 19 (Injury, poisoning, and certain other consequences of external causes [S00-T88])The guidelines clarify that coders do not need to see a change in the patient’s condition to assign an underdosing code. According to the updated guidelines, “Documentation that the patient is taking less ...
Z Codes: Understanding Palliative Care and Related Z Codes
October 11th, 2022 - Gloryanne Bryant
Palliative care is often considered to be hospice and comfort care. Palliative care is sometimes used interchangeably with “comfort care” and then again sometimes with “hospice care.”  But these terms do have slightly different meanings and sometimes the meaning varies depending on who is stating it. The National...
2023 ICD-10-CM Code Changes
October 6th, 2022 - Christine Woolstenhulme, CPC, CMRS, QCC, QMCS
In 2022 there were 159 new codes; the 2023 ICD-10-CM code update includes 1,176 new, 28 revised, and 287 deleted codes, a substantial change from last year. The 2023 ICD-10-CM codes are to be used for discharges from October 1, 2022 through September 30, 2023, and for patient encounters from ...
Yes, You Have What It Takes To Lead Your Practice And Your Profession
September 20th, 2022 - Kem Tolliver
If you’ve been in any healthcare role for more than two years, you’ve seen quite a bit of change. And guess what, it’s not over. We are living and working in uncertain times. This climate requires each of us to step outside of our comfort zones to lead exactly where we stand. It’s not required of one to have a “title” to lead. What is required, however, is a willingness to trust your instincts, look for answers and rely on your team.



Home About Contact Terms Privacy

innoviHealth® - 62 E 300 North, Spanish Fork, UT 84660 - Phone 801-770-4203 (9-5 Mountain)

Copyright © 2000-2022 innoviHealth Systems®, Inc. - CPT® copyright American Medical Association