HHS IG Audit: 'Medicare Advantage Compliance Audit of Specific Diagnosis Codes That Cigna-HealthSpring Life & Health Insurance Company Submitted to CMS'

WASHINGTON, April 2 -- The Health and Human Services Inspector General issued the following audit report (No. A-07-19-01192) on March 2023 entitled "Medicare Advantage Compliance Audit of Specific Diagnosis Codes That Cigna-HealthSpring Life & Health Insurance Company, Inc Submitted to CMS" filed under the Centers for Medicare and Medicaid Services.

Here are excerpts:

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Report in Brief

Why OIG Did This Audit

Under the Medicare Advantage (MA) program, the Centers for Medicare & Medicaid Services (CMS) makes monthly payments to MA organizations according to a system of risk adjustment that depends on the health status of each enrollee. Accordingly, MA organizations are paid more for providing benefits to enrollees with diagnoses associated with more intensive use of health care resources than to healthier enrollees, who would be expected to require fewer health care resources.

To determine the health status of enrollees, CMS relies on MA organizations to collect diagnosis codes from their providers and submit these codes to CMS. Some diagnoses are at higher risk for being miscoded, which may result in overpayments from CMS.

For this audit, we reviewed one MA organization, Cigna-HealthSpring Life & Health Insurance Company, Inc. (Cigna), and focused on nine groups of high-risk diagnosis codes. Our objective was to determine whether selected diagnosis codes that Cigna submitted to CMS for use in CMS's risk adjustment program complied with Federal requirements.

How OIG Did This Audit

We sampled 300 unique enrollee-years with the high-risk diagnosis codes for which Cigna received higher payments for 2016 through 2017. We limited our review to the portions of the payments that were associated with these high-risk diagnosis codes, which totaled $720,395.

What OIG Found

With respect to the nine high-risk groups covered by our audit, most of the selected diagnosis codes that Cigna submitted to CMS for use in CMS's risk adjustment program did not comply with Federal requirements. Specifically, for 200 of the 300 sampled enrollee-years, the medical records that Cigna provided did not support the diagnosis codes and resulted in $468,372 in overpayments. As demonstrated by the errors found in our sample, Cigna's policies and procedures to prevent, detect, and correct noncompliance with CMS's program requirements could be improved. On the basis of our sample results, we estimated that Cigna received at least $6.24 million in overpayments for 2016 and 2017.

What OIG Recommends and Cigna Comments

We recommend that Cigna: (1) refund to the Federal Government the $468,372 of overpayments; (2) identify, for the high-risk diagnoses included in this report, similar instances of noncompliance that occurred before or after our audit period and refund any resulting overpayments to the Federal Government; and (3) continue its examination of its existing compliance procedures to identify areas where improvements can be made to ensure that diagnosis codes that are at high risk for being miscoded comply with Federal requirements and take the necessary steps to enhance those procedures.

Cigna did not concur with our recommendations and did not concur with our findings for 6 sampled enrollee-years which, according to Cigna, were supported by the medical records. Cigna did not directly agree or disagree with our findings for the remaining enrollee-years. Cigna did not agree with our audit methodology, use of extrapolation, and standards for data accuracy, coding, and documentation requirements.

After reviewing Cigna's comments and the additional information that Cigna provided, we revised the number of enrollee-years in error from 201 to 200 for this final report. After we had issued our draft report, CMS updated regulations for audits in its risk adjustment program to specify that extrapolated overpayments could only be recouped beginning with payment year 2018. Because our audit period covered payment years 2016 and 2017, we revised our first recommendation to specify a refund of only the overpayments for the sampled enrollee-years. We made no changes to our other recommendations. We followed a reasonable audit methodology and correctly applied applicable Federal requirements underlying the MA program.

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TABLE OF CONTENTS

INTRODUCTION ... 1

Why We Did This Audit ... 1

Objective ... 1

Background ... 2

Medicare Advantage Program ... 2

Risk Adjustment Program ... 2

High-Risk Groups of Diagnoses ... 4

Cigna-HealthSpring Life & Health Insurance Company, Inc ... 6

How We Conducted This Audit ... 6

FINDINGS ... 7

Federal Requirements ... 8

Most of the Selected High-Risk Diagnosis Codes That Cigna-HealthSpring Life & Health Insurance Company Submitted to CMS Did Not Comply With Federal Requirements ... 9

Incorrectly Submitted Diagnosis Codes for Acute Stroke ... 10

Incorrectly Submitted Diagnosis Codes for Acute Heart Attack ... 10

Incorrectly Submitted Diagnosis Codes for Major Depressive Disorder ... 12

Incorrectly Submitted Diagnosis Codes for Embolism ... 12

Incorrectly Submitted Diagnosis Codes for Vascular Claudication ... 13

Incorrectly Submitted Diagnosis Codes for Lung Cancer ... 13

Incorrectly Submitted Diagnosis Codes for Breast Cancer ... 14

Incorrectly Submitted Diagnosis Codes for Colon Cancer ... 15

Incorrectly Submitted Diagnosis Codes for Prostate Cancer ... 16

Summary of Incorrectly Submitted Diagnosis Codes ... 16

The Policies and Procedures That Cigna-HealthSpring Life & Health Insurance Company Had To Prevent, Detect, and Correct Noncompliance With Federal Requirements Could Be Improved ... 17

Cigna-HealthSpring Life & Health Insurance Company Received Overpayments ... 17

RECOMMENDATIONS ... 18

CIGNA-HEALTHSPRING LIFE & HEALTH INSURANCE COMPANY COMMENTS AND OFFICE OF INSPECTOR GENERAL RESPONSE ... 18

Cigna-HealthSpring Life & Health Insurance Company Did Not Concur With the Office of Inspector General's Recommendation That It Refund Overpayments ... 19

Cigna-HealthSpring Life & Health Insurance Company Did Not Agree With the Office of Inspector General's Findings for 6 Sampled Enrollee-Years ... 19

Cigna-HealthSpring Life & Health Insurance Company Stated That the Office of Inspector General's Audits Were Focused Only on Identifying Overpayments ... 20

Cigna-HealthSpring Life & Health Insurance Company Stated That the Office of Inspector General Did Not Follow CMS's Established Risk Adjustment Data Validation Methodology ... 21

Cigna-HealthSpring Life & Health Insurance Company Stated That the Office of Inspector General's Audits Were Inconsistent With CMS Standards for Data Accuracy ... 22

Cigna-HealthSpring Life & Health Insurance Company Did Not Agree With the Office of Inspector General's Use of Extrapolation ... 24

Cigna-HealthSpring Life & Health Insurance Company Did Not Agree With the Office of Inspector General's Medical Record Coding Review Process ... 26

Cigna-HealthSpring Life & Health Insurance Company Did Not Agree With the Office of Inspector General's Use of Medicare Administrative Contractors ... 26

Cigna-HealthSpring Life & Health Insurance Company Stated That Coding and Documentation Standards Used During the Audit Were Not Validly Established ... 27

Cigna-HealthSpring Life & Health Insurance Company Stated That the Office of Inspector General Did Not Provide Any Information Regarding the Independent Medical Review Contractor and the Coding Standards Used for This Audit ... 28

Cigna-HealthSpring Life & Health Insurance Company Stated That the Office of Inspector General Used an Arbitrary Date Range That Prohibited Cigna From Submitting Documentation That Would Substantiate a Diagnosis ... 30

Cigna-HealthSpring Life & Health Insurance Company Stated That the Office of Inspector General Used Problematic Standards To Determine the Validity of Diagnoses ... 31

Cigna-HealthSpring Life & Health Insurance Company Did Not Concur With the Office of Inspector General's Recommendation To Perform Additional Reviews Before or After the Audit Period ... 33

Cigna-HealthSpring Life & Health Insurance Company Comments ... 33

Office of Inspector General Response ... 33

Cigna-HealthSpring Life & Health Insurance Company Did Not Concur With the Office of Inspector General's Recommendation That It Enhance Its Existing Compliance Procedures ... 34

Cigna-HealthSpring Life & Health Insurance Company Comments ... 34

Office of Inspector General Response ... 34

APPENDICES

A: Audit Scope and Methodology ... 36

B: Related Office of Inspector General Reports ... 40

C: Statistical Sampling Methodology ... 42

D: Sample Results and Estimates ... 45

E: Federal Regulations Regarding Compliance Programs That Medicare Advantage Organizations Must Follow ... 46

F: Cigna-HealthSpring Life & Health Insurance Company Comments ... 48

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INTRODUCTION

WHY WE DID THIS AUDIT

Under the Medicare Advantage (MA) program, the Centers for Medicare & Medicaid Services (CMS) makes monthly payments to MA organizations based in part on the characteristics of the enrollees being covered. Using a system of risk adjustment, CMS pays MA organizations the anticipated cost of providing Medicare benefits to a given enrollee, depending on such risk factors as the age, gender, and health status of that individual. Accordingly, MA organizations are paid more for providing benefits to enrollees with diagnoses associated with more intensive use of health care resources relative to healthier enrollees, who would be expected to require fewer health care resources. To determine the health status of enrollees, CMS relies on MA organizations to collect diagnosis codes from their providers and submit these codes to CMS./1

We are auditing MA organizations because some diagnoses are at higher risk for being miscoded, which may result in overpayments from CMS.

This audit is part of a series of audits in which we are reviewing the accuracy of diagnosis codes that MA organizations submitted to CMS./2

Using data mining techniques and considering discussions with medical professionals, we identified diagnoses that were at higher risk for being miscoded and consolidated those diagnoses into specific groups. (For example, we consolidated 29 major depressive disorder diagnoses into 1 group.) This audit covered CignaHealthSpring Life & Health Insurance Company, Inc. (Cigna), for contract number H4513 and focused on nine groups of high-risk diagnosis codes for payment years 2016 and 2017./3

OBJECTIVE

Our objective was to determine whether selected diagnosis codes that Cigna submitted to CMS for use in CMS's risk adjustment program complied with Federal requirements.

BACKGROUND

Medicare Advantage Program

The MA program offers beneficiaries managed care options by allowing them to enroll in private health care plans rather than having their care covered through Medicare's traditional fee-for-service program./4

Beneficiaries who enroll in these plans are known as enrollees. To provide benefits to enrollees, CMS contracts with MA organizations, which in turn contract with providers (including hospitals) and physicians.

Under the MA program, CMS makes advance payments each month to MA organizations for the expected costs of providing health care coverage to enrollees. These payments are not adjusted to reflect the actual costs that the organizations incurred for providing benefits and services. Thus, MA organizations will either realize profits if their actual costs of providing coverage are less than the CMS payments or incur losses if their costs exceed the CMS payments.

For 2020, CMS paid MA organizations $317.1 billion, which represented 34 percent of all Medicare payments for that year.

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FINDINGS

With respect to the nine high-risk groups covered by our audit, most of the selected diagnosis codes that Cigna submitted to CMS for use in CMS's risk adjustment program did not comply with Federal requirements. For 100 of the 300 sampled enrollee-years, the medical records validated the reviewed HCCs./15

For the remaining 200 enrollee-years, however, either the medical records that Cigna provided did not support the diagnosis codes or Cigna could not locate the medical records to support the diagnosis codes and the associated HCCs were therefore not validated. As a result, Cigna received $468,372 in overpayments.

As demonstrated by the errors found in our sample, Cigna's policies and procedures to prevent, detect, and correct noncompliance with CMS's program requirements, as mandated by Federal regulations, could be improved. On the basis of our sample results, we estimated that Cigna received at least $6.24 million in overpayments for 2016 and 2017./16

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RECOMMENDATIONS

We recommend that Cigna-HealthSpring Life & Health Insurance Company, Inc.:

* refund to the Federal Government the $468,372 of overpayments;

* identify, for the high-risk diagnoses included in this report, similar instances of noncompliance that occurred before or after our audit period and refund any resulting overpayments to the Federal Government; and

* continue its examination of its existing compliance procedures to identify areas where improvements can be made to ensure that diagnosis codes that are at high risk for being miscoded comply with Federal requirements (when submitted to CMS for use in CMS's risk adjustment program) and take the necessary steps to enhance those procedures.

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The report is posted at: https://oig.hhs.gov/oas/reports/region7/71901192.pdf