This post examines the recent DOJ settlement, analyzes the trend towards enforcement of provider-owned managed care plans, and offers a prediction on what might be coming on the enforcement side.
The Black-and-White Issue: Unsupported Diagnosis Codes
Medicare compensates Medicare Advantage plans based, in part, on diagnosis codes, in an effort to pay more money for insuring sick patients than for less-sick patients. In response to this, some managed care plans have endeavored to find ways to add diagnosis codes because more diagnosis codes in general means more money.
The clear black-and-white line some managed care providers cross is when they add diagnosis codes that are plainly unsupported from a patient’s underlying medical records. Settlements based on that issue have been steadily announced by DOJ over the past several years, with the latest announcement coming on July 31, 2023.
That settlement involved one of Maine’s largest provider groups, Martin’s Pointe Health Care, which like many providers had created its own managed care plan years back, and found itself in the Justice Department’s crosshairs when its manager of “Medicare Risk Adjustment Operations” filed a qui tam in 2018 alleging wrongful chart review.[1] After an investigation, the Justice Department settled with Martin’s Point based on the managed care plan’s purported reporting of diagnosis codes to Medicare “that were unsupported, unsubstantiated, and invalid based on the underlying medical records.”...
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