Federal Audit Found Most Sampled Medicare Advantage Diagnosis Codes From Priority Health Lacked Medical Record Support

The HHS Office of Inspector General completed an audit of Priority Health, a Michigan-based Medicare Advantage organization operating under CMS contract H2320, and found that most of the diagnosis codes the plan submitted for use in risk adjustment calculations were not supported by enrollees' medical records.

Of 300 enrollee-years reviewed, 252 had diagnosis codes that did not meet federal requirements, resulting in 828,010 dollars in estimated net overpayments within the sample. Projecting from the sample to the full population, OIG estimated Priority Health received at least 4.4 million dollars in net overpayments for the 2018 and 2019 payment years.

Sepsis codes showed a notable error rate. Of 30 enrollee-years where Priority submitted a sepsis diagnosis, 14 lacked medical record support.

Medicare Advantage risk adjustment pays plans more for members with serious diagnoses, on the theory that sicker enrollees cost more to cover. When a diagnosis cannot be supported by the medical record, the plan may receive payment that does not reflect the patient's actual health status.

OIG recommended that Priority Health refund the overpayments and strengthen internal controls over diagnosis code submissions. The audit is part of OIG's ongoing targeted review of high-risk diagnosis codes submitted by Medicare Advantage organizations nationwide.