19 November 2021

Medicare Advantage Enforcement: DOJ Advances New Theories Based on Retrospective Chart Reviews

Over the past two months, DOJ has filed complaints-in-intervention in two FCA cases premised on allegedly fraudulent diagnosis codes submitted to CMS as a result of retrospective chart reviews.  These cases demonstrate how DOJ has begun to explore new legal theories that articulate a narrower view on the legality of retrospective chart reviews designed to add diagnosis codes.

CMS has repeatedly reiterated, as recently as August 2021, that adding codes through retrospective chart reviews is permissible in certain circumstances.  See Letter from Chiquita Brooks-LaSure, Administrator, CMS, to Christi Grimm, Principal Deputy Inspector General, OIG (Aug. 20, 2021) reprinted in HHS-OIG, Some Medicare Advantage Companies Leveraged Chart Reviews and Health Risk Assessments to Disproportionately Drive Payments, at 21. However, CMS regulations provide only high-level parameters for how chart reviews should be structured, and CMS has never issued any clear sub-regulatory guidance.  As a result, Medicare Advantage Organizations (“MAOs”) and Medicare Advantage (“MA”) providers have been left to piece together the government’s expectations by looking to DOJ’s ongoing enforcement actions.

As discussed here, over the past few years, DOJ’s litigation against alleged MA upcoding has focused on diagnosis codes that are not adequately supported in medical records.  One type of retrospective chart review that has drawn DOJ’s ire in particular are so-called “one-way” chart reviews.  According to DOJ, these reviews are problematic because they are designed to allow MAOs and MA providers to identify and submit previously unsubmitted diagnosis codes, but they do not test the sufficiency of documentation for codes already submitted.  DOJ views these chart reviews as a violation of the obligation to report and return identified overpayments.

But more recently, in complaints-in-intervention filed against two MAOs, DOJ raised broader concerns about codes added through chart reviews, even when they are not “one-way.”  As explained in a press release announcing DOJ’s intervention in multiple qui tams against Kaiser Permanente, for example, DOJ explains that MAOs may “submit diagnoses to CMS only for conditions that required or affected patient care, treatment or management during an in-person encounter in the service year.  In order to increase its Medicare reimbursements, Kaiser allegedly pressured its physicians to create addenda to medical records after the patient encounter, often months or over a year later, to add risk-adjusting diagnoses that patients did not actually have and/or were not actually considered or addressed during the encounter, in violation of Medicare requirements.”  DOJ appears skeptical that a treating practitioner could have sufficiently documented a condition affecting patient care, treatment, or management while contemporaneous coding practices did not result in the submission of an associated diagnosis code.

In light of DOJ’s newly articulated concerns over the extent to which retrospectively abstracted codes are lawful because they may not have affected patient care, treatment, or management at the time of the encounter, MAOs and MA providers should consider reassessing the scope of their retrospective chart reviews to conform with DOJ’s evolving expectations.

A copy of the Kaiser complaint in intervention can be found here.

A copy of the Independent Health complaint in intervention can be found here.

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