OIG to review Medicare Advantage risk-adjustment diagnoses

The Office of Inspector General (OIG) will be taking a closer look at how health risk assessments influence Medicare Advantage risk scores and risk-adjusted payments, according to its recently updated Work Plan.

CMS makes monthly risk-adjusted payments to Medicare Advantage organizations (MAO) for each enrolled beneficiary. The risk-adjustment is based on beneficiaries’ demographic information and clinical diagnoses from the year prior. This currently includes diagnoses documented during health-risk-assessment visits. The diagnoses captured during the health-risk-assessment visit are included even if the diagnoses are not supported by services provided during that year. The OIG plans to investigate the extent to which the diagnoses documented are associated with higher risk scores and higher payments to MAOs.

This addition to the OIG’s Work Plan follows the agency’s trend of scrutinizing MAOs and the extent to which it’s possible for them to influence risk-adjusted payments. A December 2019 OIG report found that CMS based approximately $2.7 billion in risk-adjusted payments on chart review diagnoses that MAOs didn’t link to specific services.