OIG says Essence overpaid the federal government an estimated $158,000 for certain high-risk diagnoses

Findings from an Office of Inspector General (OIG) audit show that Essence Healthcare Inc. submitted claims with high-risk ICD-10-CM codes for acute stroke and major depressive disorder that did not comply with federal requirements, resulting in at least $158,000 in overpayments to Medicare Advantage (MA).

The OIG focused its audit on high-risk diagnosis codes reimbursed by MA on a monthly basis, according to a risk adjustment system that depends on the health status of each enrollee. Because MA enrollees could have high-risk diagnosis codes documented in more than one year, the OIG classified enrollees according to the condition and year, which it refers to in its audit as “enrollee-years.”

The OIG reviewed 218 unique enrollee-years with high-risk ICD-10-CM codes billed for acute stroke and major depressive disorder between 2012 and 2014. It found that for 75 of the 218 enrollee-years, diagnosis codes were not supported in the medical records or could not be supported because Essence couldn’t locate the medical records. Specifically, of the claims submitted with high-risk ICD-10-CM codes for acute stroke:

• For 46 enrollee-years, the provider should have documented a history of stroke ICD-10-CM code instead of an acute stroke code.
• For one enrollee-year, a noninpatient provider incorrectly documented an ICD-10-CM code that had been ruled out.  
• For one enrollee-year, Essence could not locate the medical record in which the ICD-10-CM code of acute stroke originated.

For claims submitted with high-risk ICD-10-CM codes for major depressive disorder:

• For 23 enrollee-years, the provider should have documented a diagnosis code for a less severe form of depression, instead of one for major depressive disorder.
• For four enrollee-years, Essence could not locate the medical records from which the diagnosis code for major depressive disorder originated.

The errors occurred because the policies that Essence has in place to detect and correct noncompliant Medicare claims were not always effective, according to the OIG. The OIG recommends that Essence refund the federal government $158,904 in overpayments. Additionally, the OIG recommends that Essence:

• Enhance its policies and procedures for identifying noncompliance with federal requirements for all diagnosis codes used to calculate risk-adjusted payments.
• Identify instances of noncompliance that occurred during the audit period but were not included in the sample, as well as instances of noncompliance that occurred outside of the audit period.