CVS Medicare Advantage: Upcoding Allegations
- A recent audit by the Department of Health and Human Services (HHS) Office of the Inspector General (OIG) alleges that Coventry Health and Life Insurance Company, a CVS-run...
- The HHS OIG report,released last week,scrutinized diagnosis codes submitted by Coventry to the Centers for Medicare & Medicaid Services (CMS).
- Regulators have recommended that Coventry conduct a thorough review for similar instances of noncompliance beyond the audit period and reimburse the $7 million, along with any additional identified...
CVS’s Coventry Medicare Advantage plan faces serious allegations. A recent HHS audit accuses the plan of inflating patient diagnoses between 2018 and 2019, resulting in nearly $7 million in overpayments. The audit’s findings raise critical concerns about Medicare Advantage upcoding and the accuracy of risk adjustment programs, especially as upcoding may cost Medicare $600 billion over the next decade. Despite the recommendations, Coventry is disputing the findings and refusing to refund the money. News Directory 3 has the details on the HHS investigation. What’s next for CVS and the future of Medicare Advantage? Discover what’s next.
CVS Medicare Advantage Plan Faces Scrutiny Over Upcoding
A recent audit by the Department of Health and Human Services (HHS) Office of the Inspector General (OIG) alleges that Coventry Health and Life Insurance Company, a CVS-run Medicare Advantage (MA) plan, inflated patient diagnoses between 2018 and 2019.The audit estimates the overpayments to be nearly $7 million, raising concerns about Medicare Advantage upcoding and the accuracy of risk adjustment programs.
The HHS OIG report,released last week,scrutinized diagnosis codes submitted by Coventry to the Centers for Medicare & Medicaid Services (CMS). Auditors steadfast that a significant portion of these diagnoses lacked supporting documentation from actual healthcare providers, suggesting potential Medicare Advantage upcoding.
Regulators have recommended that Coventry conduct a thorough review for similar instances of noncompliance beyond the audit period and reimburse the $7 million, along with any additional identified overpayments. Coventry, however, has rejected these recommendations, largely disagreeing with the audit’s conclusions.
Medicare Advantage plans, now covering a majority of Medicare beneficiaries, receive monthly payments from CMS to manage patient care. These payments are adjusted based on the health needs of enrollees, with higher payments allocated for sicker members. This system relies on accurate diagnosis codes submitted by MA insurers to track enrollee health, but it has inadvertently led to Medicare Advantage upcoding, where insurers may exaggerate health risks to inflate reimbursements.
Upcoding poses a significant financial risk. MedPAC, a congressional advisory group, estimates that MA plans will see a 10% payment increase this year due to upcoding alone. Over the next decade, this practice could result in Medicare overpaying MA plans by $600 billion, according to an analysis by the Commitee for a Responsible Federal Budget.
The HHS OIG audit of Coventry is one of many reviews aimed at verifying the accuracy of diagnosis codes submitted by MA organizations to CMS. The audit, conducted between July 2022 and October 2023, focused on diagnosis codes with a higher risk of miscoding, such as acute stroke, sepsis, and prostate cancer. Auditors found that most medical records provided by Coventry did not support the submitted diagnosis codes, and in many cases, coventry could not provide any verifying patient documentation.
The OIG report stated, ”Coventry’s policies and procedures to prevent, detect, and correct noncompliance with CMS’s programme requirements, as mandated by Federal regulations, could be improved.” The report estimates that Coventry received at least $6,995,522 in net overpayments for 2018 and 2019, representing approximately 0.2% of the $3.5 billion in total reimbursement received from the government during that period.
“We believe OIG’s Draft Report departs from clear and contrary Medicare guidance — including from OIG itself — and contributes to the false impression that MA plans are gaming the system,” said Patrick Jeswald, CVS’ chief compliance officer for Medicare.
In response, Coventry, based in St. louis, argued that the government’s audit methodology was flawed as it focused on high-risk diagnosis codes rather of evaluating coding across its entire population. They contend that conditions might be exaggerated for some patients but underreported for others.
“We have looked critically at our risk adjustment programs and provider contracts and will continue to do so. yet despite all of this work,it will never be possible to ensure the thousands of providers servicing MA members will code the millions of submissions accurately every time,” Jeswald added.
Coventry, which covers nearly 200,000 MA enrollees, has refused to repay the estimated overpayments, arguing that the HHS OIG’s $7 million estimate is flawed and that the OIG lacks the statutory authority to demand a refund.
Upcoding is a widespread issue within the MA industry.The HHS OIG has conducted over twenty similar audits, with most revealing that the majority of diagnosis codes submitted by MA organizations lack supporting evidence. These audits have included plans run by Humana, Cigna, and Centene, among others.
What’s next
CMS is planning to ramp up Medicare Advantage overpayment audits, signaling increased scrutiny of these privatized Medicare plans. Republicans in Congress have also considered targeting fraud, waste, and abuse in Medicare, though some have expressed concerns about potential political backlash.