News: OIG audit finds unsupported stroke diagnoses may have led to millions in overpayments

A report from the Office of Inspector General (OIG) estimates that Medicare Advantage (MA) organizations may have received nearly $462 million in improper payments after submitting unsupported acute stroke diagnosis codes to CMS. The OIG targeted acute stroke diagnoses in particular, because prior reviews identified them as a recurring area of risk for miscoding and improper payments. The findings highlight ongoing concerns about documentation quality and diagnosis validation in risk adjustment reporting.

Under MA, CMS uses Hierarchical Condition Categories (HCC) to adjust payments based on the documented health status of each enrollee, with higher payments made for those who have a greater disease burden due to the expectation that they will require more healthcare services. As a result, CMS relies on MA organizations to submit diagnosis codes that are fully supported by provider documentation.

To evaluate compliance, the OIG reviewed diagnosis submissions of 97 individuals enrolled in coordinated care and private fee-for-service MA plans for the 2020 service year. Of the 97 records reviewed, 68 had documentation of a previous stroke rather than an active acute stroke at the time of the encounter. Another 22 records contained no evidence supporting an acute stroke diagnosis. Other deficiencies included an illegible medical record, submission of an incorrect diagnosis code instead of a hemiplegia or hemiparesis code, and documentation signed by a pharmacist rather than an eligible provider.

In every case, auditors found that the acute stroke diagnosis codes submitted by organizations were either unsupported by the medical records or could not be validated because the records were missing. Specifically, medical records for 93 enrollees failed to support the reported diagnoses, while records for four others simply could not be located. The unsupported diagnoses resulted in an estimated $187,122 in potential overpayments within the audit sample, which the OIG projected to approximately $461.96 million in potential net overpayments nationwide.

The audit focused specifically on acute stroke diagnoses that were reported only on physician claims and had no corresponding inpatient or outpatient hospital record during the same service year. The documentation in many cases supported only a personal history of stroke, not an active acute stroke diagnosis.

As a result, the OIG recommended that CMS establish new procedures to prevent unsupported acute stroke diagnoses submitted only on physician records from being used in risk adjustment when no corresponding hospital documentation exists during the same service year. According to the agency, implementing this safeguard could have prevented the estimated $462 million in overpayments. CMS neither agreed nor disagreed with the recommendation in its response to the audit.

For coding and CDI professionals, the audit reinforces the importance of ensuring that acute stroke diagnoses are clearly supported by provider documentation and meet CMS risk active acute stroke, as each has different coding and HCC implications.

Editor’s note: To read the full report from the OIG, click here. To read additional coverage from JustCoding, click here.