The Department of Justice has made diagnosis coding practices in the Medicare Advantage risk adjustment space a top enforcement priority, with settlements mounting across the industry.
The latest resolution involves a $14.1 million settlement with Complete Health Partners Holdings, LLC to resolve allegations that it caused the submission of false diagnosis codes in violation of the False Claims Act.
The underlying case, United States ex rel. Bowers v. Complete Health Partners, Inc., et al., was brought under the qui tam provisions of the FCA by a former employee of two Medicare Advantage Organisation co-defendants.
The government contends that Complete Health “pressured” providers to add diagnosis codes that were not clinically valid, not properly supported by medical records, or not considered in the beneficiary’s care, management, or treatment.
Specifically, coders inserted diagnosis codes within HCC 55, covering drug and alcohol dependence, and HCC 59, covering major depressive, bipolar, and paranoid disorders, directly into the electronic medical record as “suggestions” before a patient visit.
The allegedly fraudulent addition of these codes inflated patients’ risk scores, leading to increased future capitation payments under Medicare’s risk adjustment payment model.
Complete Health is far from the only entity to face government scrutiny, with DOJ pursuing a series of FCA cases against MA plans, provider groups, and vendors across the industry in recent years.
Earlier this year, DOJ entered into a $556 million settlement with a health system related to, among other things, an alleged practice of suggesting additional diagnosis codes after a patient encounter had already occurred.
A $56.5 million settlement was also announced with an in-home health assessment vendor over allegations it caused Medicare Advantage organisations to submit invalid diagnoses of chronic conditions including drug dependence, major depressive disorder, and morbid obesity.
A national health insurer separately agreed to pay $117.7 million to resolve allegations that it operated a chart review program that added diagnosis codes it deemed supported but did not delete codes that lacked support.
The Department of Health and Human Services Office of Inspector General published Medicare Advantage-specific compliance guidance in February, explicitly identifying the use of prompts to add risk-adjusting diagnoses within electronic medical records as “potentially fraudulent and abusive conduct.”
The government’s concerns are closely linked to the alleged effect these coding suggestion processes have on the adoption of inaccurate diagnosis codes, rather than the existence of such processes alone.
Ensuring that coding suggestions reflect diagnoses supported by the medical record, and that providers substantively review suggestions before accepting them, remains a key safeguard against False Claims Act liability.
Diagnosis codes highlighted across these settlements, including those covering substance dependence, mental health conditions, obesity, arthritis, congestive heart failure, arrhythmias, and thrombophilia, are frequent targets of DOJ scrutiny and can be difficult to document in senior populations.
Organisations operating diagnosis coding suggestion programs in the Medicare Advantage space should evaluate whether suggested codes are clinically supported, whether provider review is documented and substantive, and whether incentive structures reward accuracy over volume.