Goodsurance

Medicare Advantage

Federal Auditors Found Medicare May Have Overpaid Medicare Advantage Plans 462 Million Dollars for Stroke Diagnoses That Lacked Hospital Records

An OIG audit of 2021 claims found that acute stroke diagnosis codes appearing on physician records across a sample of Medicare Advantage enrollees had no corresponding hospital record, a pattern auditors say inflated risk scores and generated large overpayments.

By the Goodsurance editorial teamSeptember 3, 2026

The Office of Inspector General of the Department of Health and Human Services published a report in May 2026 finding that Medicare may have made approximately 462 million dollars in net overpayments to Medicare Advantage organizations for the 2021 payment year, based on acute stroke diagnosis codes that were not supported by hospital records.

The audit examined a stratified random sample of 97 Medicare Advantage enrollees whose plans submitted acute stroke diagnosis codes in 2020. For every sampled enrollee, the diagnosis appeared on a physician record but no matching acute stroke diagnosis was found in inpatient or outpatient hospital records for the same service year. The OIG concluded that the absence of a hospital record suggests the acute event may not have occurred in the year the code was submitted.

OIG found Medicare Advantage plans may have been overpaid 462 million dollars for acute stroke diagnoses with no matching hospital record.

The discrepancy matters because Medicare pays Medicare Advantage plans a monthly capitation amount that rises when certain serious diagnoses are reported for an enrollee, raising the enrollee's risk score. Acute stroke is a high-acuity diagnosis that significantly increases that score. The OIG estimated that overpayments from this specific coding pattern reached 462 million dollars across all Medicare Advantage plans nationwide for 2021 alone.

The OIG recommended that CMS develop a process to identify and recover overpayments tied to this pattern, and build claims-level edits that would flag future cases where an acute stroke code appears on a physician claim but no corresponding hospital code is found for the same enrollee and year. CMS agreed with the recommendations.

In plain words

Medicare pays extra money each month to private Medicare Advantage plans when their members are sicker. Plans must tell Medicare what health problems each person has. Auditors found that some plans said a member had a stroke, but there was no hospital record of that stroke. When that happens, the plan gets paid too much. Auditors checked a sample of cases and found the same problem every time. They estimated this may have cost Medicare 462 million dollars in just one year. The government said Medicare should find and recover those extra payments.

Understand the basics first

Source: OIG
Read at the source →

More news

Other stories on what is moving in Medicare.

Medicare Advantage

GAO Report Flags 23.7 Billion Dollars in Medicare Advantage Improper Payments and Calls for Stronger Fraud Controls

The Government Accountability Office found that Medicare Advantage improper payments hit an estimated 23.7 billion dollars in fiscal year 2025, representing about 6.1 percent of the program's outlays, while CMS has yet to complete a comprehensive fraud risk assessment.

October 18, 2026

Medicare Advantage

KFF: Nearly Three-Quarters of Medicare Advantage Enrollees Have a Condition That Could Block a Medigap Policy

A KFF analysis published the day before open enrollment opens finds that most people in Medicare Advantage plans carry diagnoses that Medigap insurers can use to deny or reprice coverage if those enrollees try to return to Original Medicare.

October 14, 2026

Medicare Advantage

Medicare Advantage Plans Reversed Nearly All Skilled Nursing Facility Denials on Appeal, OIG Finds

A federal audit of 19 Medicare Advantage organizations found they overturned 95 percent of denied prior authorization requests for skilled nursing facility stays when enrollees appealed, raising questions about the accuracy of initial decisions.

October 11, 2026

Medicare Advantage

MedPAC Analysis Finds Medicare Advantage Provider Directories May Overstate Physician Network Participation

A new presentation to Congress's Medicare advisory body compared plan directories to actual encounter records and found meaningful gaps, raising concerns just as open enrollment opens October 15.

October 10, 2026

Medicare Advantage

CMS Releases Official 2027 Medicare Advantage Star Ratings on Medicare Plan Finder

Scores are now searchable on medicare.gov one week before the October 15 open enrollment start. Fewer plans earned four stars or higher compared with 2026.

October 9, 2026

Medicare Advantage

Federal Appeals Court Judges Question Government's Defense of Medicare Advantage Audit Rule

A Fifth Circuit panel heard oral arguments Monday in Humana's lawsuit over a 2023 CMS rule that changed how Medicare recovers overpayments from Medicare Advantage plans, with judges appearing unreceptive to the administration's position.

October 6, 2026