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Practice Matters — Coding: Risk Adjustment and the Future of Physician Pay

Butcher, Lola

doi: 10.1097/01.NT.0000525670.27765.b1
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ARTICLE IN BRIEF

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A federal lawsuit claiming that UnitedHealth Group, the nation's largest Medicare Advantage insurer, is inappropriately coding medical claims for financial gain, puts the spotlight on how medical codes are used for risk adjustment — the root of the Department of Justice's interest and a medical coding topic that every physician practice needs to get smart about.

When the federal government recently joined lawsuits claiming that UnitedHealth Group, the nation's largest Medicare Advantage (MA) insurer, is inappropriately coding medical claims for financial gain, several neurology practices had an “aha” moment: So that's why the insurer's auditors frequently want to dig into their patient records.

The government contends that the MA plans overcharge the Centers for Medicare & Medicaid Services (CMS) after reviewing physicians' medical records and determining that medical codes that yield higher payments are justified.

Although those medical records are key documents in the suits, this conflict is between the Department of Justice (DOJ) and the insurer, and physicians themselves will be bystanders as the coding brouhaha plays out in the court system.

Nonetheless, the case puts the spotlight on how medical codes are used for risk adjustment — the root of the DOJ's interest and a medical coding topic that every physician practice needs to get smart about.

The codes at issue are complicated, tedious, and frustrating for physicians who just want to take care of their patients. But they are already being used to compare physicians to their peers, and as value-based payment systems gain traction, the codes will influence insurance contracting opportunities and physician pay.

“This is going to be an increasingly important way that health care will be evaluated and paid,” said Eric Cheng, MD, FAAN, a neurologist and health services researcher at the David Geffen School of Medicine at the University of California, Los Angeles.

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STUCK IN THE MIDDLE

Elaine C. Jones, MD, FAAN, chair of the Academy's Payment Policy Subcommittee, started getting multiple record-review requests from UnitedHealth Group two years ago. The insurer would send a letter identifying 50 or more records it wanted to review.

“I assumed they were double-checking that I was submitting my bills correctly,” she said.

Each time the auditors left without giving her any feedback — and returned a few months later. “My office manager would ask them, ‘What's the issue?’ and they would say, “This is just part of normal business,'” she said.

Texas Neurology, a large practice in Dallas, knows that routine. The practice receives this type of contact from UnitedHealth Group and other MA plans on an almost monthly basis. Typically, the reviewer asks for 10 patient records for each of the practice's 20 providers. The record request was not random; reviewers wanted to see the records of specific patients who generally had multiple comorbidities.

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“These requests are exhaustive and expensive for us to handle, and we get compensated nothing for it,” said David Evans, MBA, chief operations officer of Texas Neurology. Sometimes the practice receives a written summary saying that coding was inaccurate but with no specific guidance, he said.

“So you're left with not a lot of information, which is obviously concerning as a practice, thinking that you have been told you are not coding correctly — even though the doctor, in our belief, is coding accurately,” he said.

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RISK SCORES 101

The codes at issue in the DOJ lawsuits were introduced in 2005, and they have been controversial almost from the start. The federal government made an estimated $16 billion in improper payments to MA health plans last year, according to the Government Accountability Office, and the inappropriate use of codes was identified as a primary source of the problem.

MA plans, created by Congress as an alternative to standard Medicare, have become quite popular and now cover about one-third of all Medicare beneficiaries. Medicare pays MA plans, operated by private insurance companies, a fixed dollar amount per enrollee per year. Recognizing that some patients are costlier to care for than others, Medicare developed a risk scoring system so that MA plans are paid more for enrolling high-cost patients and less for those in good health. High-cost patients are identified if a health care provider selects a specific set of ICD-10 diagnosis codes called Hierarchical Condition Categories (HCC) codes.

Although the HCC codes are complicated, Dr. Cheng thinks CMS was smart to develop the system. He wants MA plans, which many patients prefer over standard Medicare, to be paid fairly for more complex patients so they will be willing to cover them.

“Before the HCCs were in place, there was no protection for patients who were expected to cost more,” he said. “While some neurologists believe that we can develop a better risk adjustment system than the HCC codes, we all agree that there is a need for risk adjustment.”

What exactly constitutes “fair” will be sorted out in the lawsuits. In a lengthy investigation called “Medicare Advantage Money Grab,” the Center for Public Integrity found that some MA plans “upcode” — that is, exaggerate how sick their patients are — to bill Medicare for higher fees than they are entitled to. Indeed, the Center reported last year that 35 of the 37 MA health plans audited by the government for 2007 were overpaid, often because of inappropriate coding.

In this milieu, several “whistleblowers” — people who claim first-hand knowledge of fraud — have filed lawsuits against MA plans under the False Claims Act, which allows the whistleblower to receive a share of any money recovered.

So far this year, the DOJ has intervened into two such lawsuits against UnitedHealth Group, the largest owner of MA plans in the country. The complaints, pending in U.S. District Court for the Central District of California, allege that UnitedHealth increased its risk-adjustment payments from Medicare inappropriately.

The DOJ, in a publicly released statement, said one of the suits contends that UnitedHealth Group (UHG) “conducted a national Chart Review Program designed to identify additional diagnoses not reported by treating physicians that would increase UHG's risk adjustment payments. However, UHG allegedly ignored information from these chart reviews showing that hundreds of thousands of diagnoses provided by treating physicians and submitted by it to Medicare were invalid and did not support the Medicare payments it had previously requested and obtained.”

The insurer rejected the government's claims and said it will vigorously defend itself. In a statement issued to media organizations, UnitedHealth Group said: “The complaint shows the Department of Justice fundamentally misunderstands or is deliberately ignoring how the Medicare Advantage program works.”

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WHAT IS ACCURATE CODING?

The business of medicine makes medical coding tricky because “accurate” looks different from different viewpoints.

From the provider's perspective, codes should be used to reflect what the provider is monitoring, evaluating, assessing or treating, Evans said. Clinicians are trained not to embellish, which might draw criticism from private insurers or Medicare auditors.

“If you're treating a patient for sleep problems and you don't think that his other chronic conditions have anything to do with your decision-making, you're not going to code for another condition because you're not monitoring it, evaluating it, assessing it or treating it,” Evans said.

That said, patients with comorbidities are generally more expensive to care for, and the CMS created codes specifically to address that. In the eyes of an MA plan, using those codes to generate a high-risk score — and more money from Medicare — makes sense.

In a recent AAN Practice Management webinar, “Coding for Risk: How It Impacts Payment,” Dr. Cheng pointed out that the HCC codes will be increasingly important to physicians as public and private payers introduce “value-based” payment methods.

“The emerging definition of value is your actual costs divided by your expected costs,” he said. Thus, the best way to prove that you are a “high-value” physician is to show that your actual costs are lower than expected costs. And the proper use of HCC codes, which indicate expected costs for a given patient, are used to do just that.

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LINK UP FOR MORE INFORMATION:

•. 2017 AAN Practice Management Webinars: Coding for Risk: How It Impacts Payment: http://bit.ly/NT-CodingWebinar.
    •. Medicare Advantage Program Integrity: CMS's Efforts to Ensure Proper Payments and Identify and Recover Improper Payments, Testimony Before the Subcommittee on Oversight, Committee on Ways and Means, House of Representatives, U.S. Government Accountability Office, July 2017. http://bit.ly/NT-MAprogramintegrity.
      © 2017 American Academy of Neurology