Physician Practices Examine Risk Adjustment Coding in Wake of Federal Lawsuits

A federal lawsuit claims that UnitedHealth Group, the largest Medicare Advantage insurer in the country, is coding medical claims inappropriately for monetary gain. But while the lawsuit doesn’t involve physician practices, many practices are now paying more attention to risk adjustment coding than ever.

At the heart of the UnitedHealth lawsuit is the claim that the insurer inflated its Medicare Advantage risk scores, which are determined by the level of services required by each beneficiary. Higher risk scores translate into higher payments from the government, and the contention is that this dynamic has created an incentive for plans to squeeze the maximum reimbursement possible.

The federal government claims MA plans overcharge the Centers for Medicare and Medicaid Services after sifting through physicians’ medical records and greenlighting codes that generate higher payments.

A report in Neurology Today advises physicians to be on their toes: The codes, it said, affect physician pay and insurance contracting opportunities. Physicians should monitor the outcome of the lawsuits as value-based payment frameworks continue to spread and gain traction.

High-cost patients in MA plans are identified if a provider selects Hierarchical Condition Categories codes from the larger ICD-10 set, and the importance of those codes only increases as the broader healthcare system transitions from fee-for-service to value-based payment models. While physicians can use these codes to generate a high-risk score and receive more reimbursement for complicated patients, they need to carefully and properly use the HCC codes, which indicate the expected costs for a patient.

According to Neurology Today, the lawsuits suggest the Department of Justice is zeroing in on risk adjustment practices. For its part, UnitedHealth has denied the allegations.

The Government Accountability Office estimates the federal government made about $16 billion in improper payments to MA health plans last year, with the inappropriate use of codes being the primary factor. MA plans now cover about one-third of all Medicare beneficiaries.

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Photo courtesy of: Healthcare Finance News

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