News: OIG audit estimates $4.4 million in net overpayments to Priority Health

The Office of Inspector General (OIG) conducted an audit of Medicare Advantage (MA) organizations because some diagnoses are at a higher risk for being miscoded, which may result in overpayments from CMS. The audit is part of a larger series of audits in which we are reviewing the accuracy of diagnosis codes that MA organizations submitted to CMS.

This audit covered Priority Health (“Priority”) for contract number H2320 and focused on 10 groups of high-risk diagnosis codes for payment years 2018 and 2019. The objective was to determine whether selected diagnosis codes that Priority submitted to CMS for use thin CMS’s risk adjustment program complied with federal requirements.

The OIG found that most of the selected diagnosis codes that Priority submitted to CMS for use in its risk adjustment program did not comply with federal requirements. Out of the 300 sampled enrollee-years, 252 had medical records that did not support the diagnosis codes, which resulted in $828,010 in net overpayments. From the sample results, the OIG estimates that Priority received at least $4.4 million in net overpayments for 2018 and 2019.

This resulted in the following recommendations for Priority from the OIG:

1. Refund to the Federal Government the $4.4 million of estimated net overpayments.
2. Identify, for the high-risk diagnoses included in this report, similar instances of noncompliance that occurred after our audit period and refund any resulting overpayments to the Federal Government.
3. Continue its examination of its existing compliance procedures to identify areas where improvements can be made to ensure that diagnoses that are at high risk for being miscoded comply with Federal requirements (when submitted to CMS for use in CMS’s risk adjustment program) and take the necessary steps to enhance those procedures.

Priority disagreed with some of the OIG’s findings and with the OIG’s recommendation to identify similar instances of noncompliance that occurred after the audit period, and the recommendation that it refund overpayments. It also disagreed with the OIG’s recommendation to continue to examine its existing compliance procedures and take necessary steps to enhance them.

Editor’s note: To read the full report, click here. To read the report highlights, click here.