In June of this year, the House Committee on Energy and Commerce held an oversight hearing on Medicare Advantage (MA) plans. Multiple witnesses confirmed instances of MA plans “upcoding” ––which has been defined as, “systematically assessing enrollees as having more health conditions and being sicker on average than is actually the case.” In other words, exaggerating patient illnesses to artificially inflate monthly payments from the government. The resulting report revealed upcoding accounted for $12 billion in additional payments in one year alone.
Medicare Advantage plans maintain that their coding is more accurate and complete. The upcoding issue is not new. In fact, the U.S. Congress required CMS to implement a 3.4% reduction to risk scores beginning in 2010, a figure that was raised to 5.9% in 2018. CMS has the authority to increase the adjustment further but has yet to do so.
Fast forward to October 2022, and the U.S. Department of Justice (DOJ) filed a civil healthcare fraud lawsuit against Cigna and its subsidiary Medicare Advantage Organizations, seeking damages and penalties under the False Claims Act following allegations the insurer defrauded Medicare out of tens of millions of dollars by upcoding.
This is just the beginning of what will prove to be a lengthy, revealing, and expensive period for some health plans.
According to federal audits, eight of the ten largest MA plans, representing more than two-thirds of the market, have submitted inflated bills. And four of the five largest payers, including Elevance, Humana, Kaiser, and UnitedHealth, have faced federal fraud lawsuits.
Diagnosis coding applications have been available to assist healthcare providers and coders in identifying opportunities to choose codes that qualify for higher reimbursement. The software can prompt the user to code a more serious or complex diagnosis; for example, one with complications or higher risk.
However, if the patient does not actually have the more complex condition, and the documentation does not reflect evidence and treatment of that condition, the resulting upcoding can lead to civil fraud allegations if discovered in an audit.
Another capability provided by these coding and analytics applications is automated reviews of a patient chart to identify conditions or diagnoses that might qualify for higher reimbursement. This process is commonly referred to as “suspecting,” and its purpose is to find conditions and record a diagnosis code that will generate additional revenue. As in the case with upcoding, this capability should be directed toward managing a condition and documenting its assessment, evaluation, and treatment.
These incidents illustrate that, far too often, the focus is on the coding of the condition (whether real or not), and not on the caring for the patient. The disturbing trend is being noticed and covered widely in the mainstream and trade press and will no doubt lead to many more actions like that taken against Cigna by the DOJ.
Medicare Advantage and similar value-based care initiatives are designed to reduce the long-term costs of providing care to patients with chronic conditions. Giving clinicians the ability to identify and code a condition is not enough; we must also provide them with tools to manage, evaluate, assess, treat, and document the delivered care. Again, the focus needs to be on the caring rather than coding.
Despite the many marketing claims to the contrary, most electronic health records (EHRs) remain little more than static repositories of information that exist more to justify diagnoses and billing, rather than to empower clinicians to improve patient care. To improve the care––and outcomes––of chronic conditions, a new set of tools for clinical management of patients at the point of care is needed. Such tools should include, in addition to the ability to select a proper diagnosis code, the following capabilities:
- Diagnostically relevant prompting of documentation requirements for each diagnosis that reflect acceptable management, evaluation, assessment, and treatment of each specific diagnosis
- The ability to click on any diagnosis and filter the patient record for the “hallmark” indicators and status of any diagnosis, including symptoms, history, physical exam findings, test orders and results, therapies, and evidence of sequalae and complications related to the diagnosis––to make management of the condition much easier for the provider
- A diagnostically focused longitudinal view of clinically relevant information for the condition
- Presentation of all other actions needed to satisfy compliance requirements for E&M coding, clinical quality measures, and enterprise guidelines for specific clinical situations.
Too many healthcare stakeholders have been focused on the wrong issues for far too long. It is long past time to transition from the view of the patient medical record as an inert platform to facilitate coding and billing, to a diagnostically interactive tool to enable the coordination of better patient care.
David Lareau is CEO of Medicomp Systems where he is responsible for operations and product management, including customer relations and marketing.