U.S. Department ofHealth and Human Services
Office of Inspector General
Issue Brief
February 2023, OEI-03-21-00380
The Inability To Identify Denied Claims in Medicare Advantage
Hinders Fraud Oversight
This issue briefsummarizes results from our evaluation of
Key Takeaways
Medicare Advantage (MA) encounter data and examines
whether the lack of an indicator to identify payment Althoughmost2019MAencounterrecords
denials in the data hinders efforts to combat fraud, waste, containedapaymentadjustment,
and abuse. (In this issue brief, we use the term denied identifyingwhethertheseadjustmentsare
claim to refer to a record that contains a service for paymentdenialsischallengingand
which the payer denied payment to the provider.) imprecise.
RequiringMAOstodefinitivelyidentify
Why OIG Did This Review
paymentdenialsonencounterrecords
Detailed data about the services provided to enrollees are
submittedforMAwouldenhanceprogram
essentialfor combating fraud and abuse in Medicare and oversightandhelpcombatfraud.
Medicaid. The oversight entities tasked with
safeguarding these programs rely on service-leveldata todetectpotentially inappropriate billing
patterns and investigate suspected fraud and abuse. In the MA program, the Centers for Medicare
& Medicaid Services (CMS) does not require MA organizations (MAOs) toinclude an indicator that
identifies denied claims in their MA encounter data. Instead, MAOs must submitclaim adjustment
reason codes (hereafter adjustment codes)when MAOs donot pay the actualamountbilled by the
provider (e.g., the MAO pays a lesser amount). Adjustment codes explain reasons for any payment
adjustments to the claim, including denials, reductions, or increases in payment. In contrast, for
Medicare fee-for-service and Medicaid (including Medicaid managed care), CMSs records ofservices do
include denied-claim indicators.
How OIG Did This Review
We analyzed 2019 MA encounter records to determine the extentto which these records contained
adjustment codes. We reviewed adjustment code descriptions and MAO paymentamounts to identify
records that may contain payment denials. We interviewed and/or administered questionnaires to CMS
staff regarding the methods used to identify payment denials in the Medicare and Medicaid data. To
identify how the lack of a denied-claim indicator affects their work, we interviewed and/or administered
questionnaires to stafffrom oversight entities tasked with safeguarding MA program integrity. These
oversight entities include staff from CMSs Center for Program Integrity and the Medicare Drug Integrity
Contractors (MEDICs)(hereafter CMS program integrity staff); OIG investigators and data analysts; and
health care fraud staff at the DepartmentofJustice (DOJ). Finally, we also interviewed staff from CMSs
Medicare Plan Payment Group (hereafter CMSs MA payment group)to determine the reasons why
CMS does not require MAOs to submita denied-claim indicator on MA encounter records.
What OIG Found
We found that adjustment codes are not a definitive method for identifying denied claims in the MA
encounter data. The descriptions for some adjustment codes are too vague to clearly identify whether the MAO denied payment for a service. For example, adjustment code 261 (The procedure or service is
inconsistent with the patients history) does not specify whether paymentwas denied. The descriptions
for other adjustment codes seem to indicate that the MAO denied payment for the service, yet we
found instances in which MAOs reported payments for these services. We also found that most
2019 MA encounter records contained at least 1 adjustment code and 55 million ofthese records
contained codes that may indicate the denialof payments by MAOs. However, without adefinitive
method for identifying denied claims in the MA encounter data, the fullscope ofpayment denials in the
data is unclear.
In addition, oversight entitiesincluding CMSprogram integrity staff; OIG investigators and analysts;
and DOJ health care fraud staffreported that a denied-claim indicator in the MA encounter data
would improve the efficiency, scope,and accuracy oftheir efforts to combat fraud, waste, and abuse.
Once identified, denied claims may be (1)analyzed to detect potential fraud schemes or (2)removed
from analyses ofinappropriate billing patterns among paid claims. Without an indicator, oversight
entities must make separate requests to MAOs asking them to identify denied claims in a subset oftheir
data, which adds time and burden to investigations. The lack of an indicator limits the scope of efforts
to determine the full impact ofpotential fraud activities in MA. For example, without an indicator, itis
challenging or impossible for oversight entities to:
 exclude denied claims and reviewonly paid claims in the MA encounter data;
 calculate financialexposure due to fraud;
 investigate complaints that certain MAOs inappropriately deny paymentsto their providers; and
 examine suspected providers billing activities across many plans.
However, for Medicare fee-for-service and Medicaid, oversight entities can use the available
denied-claim indicators to analyze data and perform enhanced program oversight.
Despite oversight entities reporting the potential benefits ofa denied-claim indicator to MA program
integrity, CMSs MA payment group reported that MAOs are not required to submit a denied-claim
indicator in MA because the MA payment group does not need this indicator to determine MA
payments or to understand which services were provided to enrollees. CMSs MA payment group
raised concerns about the potential burden onMAOs ofrequiring a denied-claim indicator on their
encounter records. However, the private companies that cover most MA enrollees alsohave contracts
for Medicaid managed carewhere CMS requires a denied-claim indicator on encounter recordsand
thus have demonstrated their ability to make accommodations in their systems andreportthese
indicators. Once any initialchallenges ofmodifying MAOs systems are addressed, the inclusion ofa
denied-claim indicator in the MA encounter data may reduce the burden on MAOs ofproviding
denied-claim information to oversightentities for fraud analyses. Finally, CMS may eventually need a
denied-claim indicator to determine MA payments ifit transitions tousing the MA encounter data to
estimate costs and set MA payments as ithas previously stated that it will do in the future.
What OIG Recommends
To strengthen MA program oversight and combat fraud, we recommend that CMS require MAOs to
definitively indicate on MA encounter data records when they have denied payment for a service on a
claim. CMS did not concur or nonconcur with our recommendation. BACKGROUND
MAOs must submit claim adjustment reason codes on MA encounter records when
MAOs deny claims billed by providers. These adjustment codes are used when MAOs
deny payment, and also to explain any other changes the MAOs make tothe billed
amount when determining payment for the claim. CMS does not require MAOs to
include an indicator to solely identify which services were denied payment. (In this
issue brief, we use the term denied claim torefer to a record that contains a service
for which the payer denied payment to the provider.)
This issue briefpresents detailed findings on (1) whether there is a definitive method
to identify denied claims in the MA encounter data; (2)how the lack of a denied-claim
indicator affects the efforts ofCMS program integrity staff, OIG investigators and
analysts, and DOJ health care fraud staff whoare tasked with safeguarding MA
program integrity; and (3)the reasons why CMS has not required MAOs to submit
denied-claim indicators.
Payments to MAOs and providers in the MA program
The MA program covered 27 million people in 2021 at a cost of$340 billion.1 Under
MA, CMS contracts with private companies, known as MAOs, to provide coverage of
Part A and B services through private health plan options.2 For each person enrolled,
MAOs receive a capitated payment from CMS.3 Tocalculate capitated payments,
CMSrequires MAOs to submitrecords ofservices provided to enrollees.4 These
encounter records often (though not always)begin as claims that health care
providers submitto MAOs for payment. MAOs must submitrecords ofall services to
CMS, including records ofdenied claimsi.e., records that contain a service for which
the payer denied payment to the provider for the service.5
CMSs payments to MAOs. CMS pays MAOs a capitated payment that reflects the
predicted costofproviding care to each enrollee. CMS calculates risk-adjusted
payments to pay MAOs more for enrollees with higher expected health care costs.
For risk adjustment, MAOs submitencounter records to CMSs EncounterData System
that contain information on each service or medicalitem that an enrollee receives
from a provider.6 CMSuses these encounter records to identify diagnoses for
calculating risk-adjusted payments. Toestimate the expected health care costs
associated with the diagnoses reported on MA encounter records, CMS currently uses
health care costs for Medicare fee-for-service enrollees.7 As early as 2010, CMS
announcedplans to eventually transition tousing the MA encounter data to estimate
these expected costs.8 This transition has the potentialto improve the accuracy of
capitated payments to MAOs by compensating MAOs for the costofproviding care
IssueBrief: TheInabilityToIdentifyDeniedClaimsinMedicareAdvantageHindersFraudOversight
OEI-03-21-00380 Background|1 to enrollees in MA, rather than in Medicare fee-for-service.9,10 CMShas not
announceda specific proposal or timeline for this transition.
MAOs payments to providers. CMS requires MAOs to provideor pay providers
forservices covered byMedicare Parts A and B that are reasonable and necessary
for the diagnosis, treatment, and prevention of medicalconditions.11 MAOs may
contract with providers (i.e., in-network providers)through various provider payment
arrangements based on (1)fee-for-service claims for services rendered (with or
without links to quality and value), (2)alternative payment models that may include
capitated payments, or (3) population-based payments that may include bundled
services. Overall, MAOs predominantly use fee-for-service provider payment
arrangements in which providers submitclaims to MAOs for reimbursementof
services rendered.12
CMS allows MAOs to deny payments to providers. When providers submitclaims
to MAOs, CMS allows MAOs to make decisions aboutwhether to reimburse or deny
paymentfor services that enrollees received.13 MAOs may deny paymentfor various
reasons,14 such as lack of medicalnecessity, noncoverage by the plan, provider
ineligibility, and administrative reasons. When an MAO denies paymentto a provider
after a service occurs, theenrollee may be required to pay for the service out of
pocket, or the provider may never receive reimbursement for the service. Therefore, if
MAOs inappropriately deny payments, this may contribute to financialharm to
enrollees or providers and may discourage providers from ordering needed health
care.15
Denied claims in the Medicare and Medicaid data
Denied claims in the MA encounter data. Although CMS requires MAOs to submit
records ofservices for which payment was denied to the Encounter Data System, it
does not require MAOs to submita denied-claim indicator on their MA encounter
records that would identify the services for which the MAOs denied payment. MAOs
include adjustment codes on MA encounter records that describe why they did not
pay the actualamount billed by the provider. Adjustment codes explain reasons for
any payment adjustments to the claim, including denials, reductions, or increases in
payment.16,17 In cases in which MAOs deny claims billed by providers, MAOs are
required to submitadjustment codes. CMS instructs MAOs toinclude any adjustment
codes on the header portion of the encounter record or certain claim lines ofthe
encounter record, as appropriate. As ofOctober 2022, therewere 294 active
adjustment codes.18,19
Denied claims in CMSs data for Medicare fee-for-service and Medicaid. For
Medicare fee-for-service, CMS requires an indicator on records ofservices that
definitively identifies claims for which CMS denied paymentto the provider. For
Medicaid (including Medicaid managed care and Medicaid fee-for-service), CMS
IssueBrief: TheInabilityToIdentifyDeniedClaimsinMedicareAdvantageHindersFraudOversight
OEI-03-21-00380 Background|2 requires a denied-claim indicator on records ofservices that States submitto the
Transformed Medicaid StatisticalInformation System (T-MSIS), as shown in Exhibit 1.20
In addition toidentifying whether the State or managed care plan denied paymentfor
an entire record, CMSrequires States to definitively identify when only certain
portions (i.e., claim lines)ofthese records were denied. Although adjustment codes
are not used to identify denied claims for Medicare fee-for-service and Medicaid,
adjustment codes may be included on these records ofservices to explain any
adjustments to the billed amounts.
Exhibit 1: CMS does not require a denied-claim indicator in MA, but does in
Medicare fee-for-service and Medicaid.
Source:OIGsummaryofCMSsrequirementsforsubmittingrecordsofservice.
Note:ThepayerisCMSforMedicarefee-for-serviceandistheStateorMedicaidmanagedcareplanfor
Medicaid.
Using the MA encounter data for program oversight
Program integrity. To safeguard the integrity ofthe MA program, oversight entities
rely on having comprehensive data aboutthe services provided to MA enrollees. The
MA encounter data are a toolused by CMS, OIG, DOJ, and other oversight entities to
prevent anddetect MA fraud, waste, and abuse, such as by investigating allegations
ofproviders billing for services that were never provided. For example, CMS, OIG, and
DOJ reviewed MA encounter data and Medicare fee-for-service claims data as part of
their efforts to investigate companies and providers that potentially defrauded
taxpayers outof$900 million.21
IssueBrief: TheInabilityToIdentifyDeniedClaimsinMedicareAdvantageHindersFraudOversight
OEI-03-21-00380 Background|3 Prior OIG work identified the need for comprehensive encounter data to safeguard
MA program integrity. CMSs MEDICthe contractor tasked with detecting and
preventing fraud, waste, and abuse in MA and Part Dmay analyze MA encounter
data to carry out its oversight activities, such as identifying providers that accepted
more than one paymentfor the same service. However, a 2018 OIG report found that
the MEDIC did not have access to certain variables in the MA encounterdata needed
to effectively carry out its activities.22 At the time ofthis review, CMS contracted with
a single MEDIC, but CMSnow contracts with twoMEDICs: the Program Plan Integrity
MEDIC and the Investigations MEDIC. OIG recommended that CMSprovide the
MEDIC with centralized access to all MA encounter data. CMS concurredwith this
recommendation but has not yet implemented it.
Quality of care. CMS has the authority to use the MA encounter data to conduct
quality review and improvement activities.23 A 2017 Government Accountability
Office (GAO) report noted that CMS was developing plans to use the MA encounter
data to reviewhow MA plans coordinate care.24 However, CMS currently does not
use MA encounter data to review enrollees quality ofcare, including access to care,
and instead uses other data sources. CMShas not yet determined whether itwill use
the MA encounter data to develop retrospectivequality ofcare metrics.
Prior OIG work about MAOs payment denials
The capitated payment modelused in MA creates a potentialincentive for MAOs to
inappropriately deny paymentfor health care services in an attempt to increase their
profits. A 2018 OIG reportanalyzed the annual performance data that MAOs
submitted to CMS and found that MAOs denied 36 million payment requests in 2016
for services provided to enrollees.25 This report found that a high percentage of
appealed denials were overturned,which raises concerns thatsome providers were
denied payments for services that MAOs are required to provide. A 2022 OIG
evaluation conducted medicalrecord reviews for a sample ofMA denials of payments
and services. This reportfound that 18 percent ofpayment denials were for services
that met Medicare coverage rules and MAO billing rules and should have been
approved bythe MAOs.26
IssueBrief: TheInabilityToIdentifyDeniedClaimsinMedicareAdvantageHindersFraudOversight
OEI-03-21-00380 Background|4 RESULTS
There is no definitive method to identify denied claims in the MA
encounter data
Adjustment codes provide an imprecise and challenging method to identify denied
claims in the MA encounter data because some adjustment code descriptions (1) are
too vague or (2)seem to indicate that the MAO denied paymentfor a service even
though MAOs also reported payment amounts for that service. When we requesteda
method from CMSto identify denied claims in the MA encounter data, CMSinformed
us that itdid not have a list of definitive adjustmentcodes or other method for
identifying denials.
Some adjustment code descriptions are too vague to clearly
identify whether the MAO denied payment
Some adjustment codes provide little information regarding whether the billed
amount was reduced, increased, or denied by the MAO. For example, adjustment
codes 216 (Based on the findings of a review organization) and 261 (The procedure
or service is inconsistentwith the patients history) are too ambiguous to indicate
whether payment was denied.27 Using only these vague adjustmentcode
descriptions without a denied-claim indicator, one might inappropriately include or
exclude these types ofadjustment codes from any analyses ofdenied claims.
MAOs reported payment amounts for some services where they
also reported adjustment codes that seemed to indicate denial of
payment
MAOs reported paymentamounts on millions of claim lines, despite these lines
containing adjustment codes that seemed to indicate payment denials. For example,
on 2.1 million encounterrecords, MAOs reported payment amounts for claim lines
containing adjustment code A1 (Claim/service denied). These contradictions
highlight the need for a more definitive way ofidentifying denied claims within MA
encounter data.
Fifty-five million MA encounter records contained adjustment
codes that may indicate a payment denial
Without a definitive method for identifying denied claims, the fullscope ofpayment
denials in the data is unclear. Ofthe 772 million MA encounter records submitted by
MAOs toCMS for 2019, 86 percentcontained at least 1 adjustment code.28 From
IssueBrief:TheInabilityToIdentifyDeniedClaimsinMedicareAdvantageHindersFraudOversight
OEI-03-21-00380 Results|5 these records, we identified 55 million records with an adjustment code that may
indicate that the MAO denied payment for the service. We excluded adjustment
codes with vague descriptions when selecting our list of 55 codes that may signal
paymentdenials, even though suchexcluded codes may have represented actual
denials. Among the top 5 adjustment codes that may indicate apotential payment
denial, MAOs reported code 96 (Noncovered charge(s)) on nearly 16 million
encounter records submitted for 4.9 million enrollees, as shown in Exhibit2.
Appendix A contains a fulllist of the 269 adjustmentcodes which appeared on
2019 MA encounter records, including the 55 codes that may indicate payment
denials.
Exhibit 2: Millions of encounter records contained one of the top five
adjustment codes that may indicate that MAOs denied payments to
providers.
Adjustment Description Numberof2019MA
Code EncounterRecords1
96 Noncoveredcharge(s). 15,810,573
18 Exactduplicateclaim/service. 7,911,595
A1 Claim/servicedenied. 6,881,112
50 Thesearenoncoveredservicesbecausethisisnot 4,332,382
deemedamedicalnecessitybythepayer.
B13 Previouslypaid. Paymentforthisclaim/servicemay 3,143,094
havebeenprovidedinapreviouspayment.
Source:OIGanalysisofMAencounterrecordsfor2019fromCMSsIntegratedDataRepository.
1ThesearethenumberofMAencounterrecordsthatcontainedanadjustmentcodeontheheaderand/orclaim
lineportionoftherecord.
The lack of a denied-claim indicator in the MA encounter
data hinders program integrity oversight
The lack of a denied-claim indicator in the MA encounter data
creates challenges for the CMS program integrity staff; OIG
investigators and data analysts; and DOJ health care fraud staff
who use MA encounterdata to combat MA fraud, waste, and
abuse. Efforts to identify denied claims add time and burdento
their analyses and investigations. Further, because they are
unable to definitively identify denied claims throughout the MA
data, oversight entities are unable to obtain a complete and
accurate understanding ofbilling and payment patterns across paid and/or denied
MA claims for all plans and providers.
IssueBrief:TheInabilityToIdentifyDeniedClaimsinMedicareAdvantageHindersFraudOversight
OEI-03-21-00380 Results|6 Oversight entities noted that certain types ofanalyses are challenging or impossible
to perform due to the lack of a denied-claim indicator in the MA data, including
analyses that:
 exclude denied claims and reviewonly paid claims in the MA encounter data
to accurately identify inappropriate payments to providers;
 calculate financialexposure due to fraud;
 investigate complaints that certain MAOs inappropriately deny paymentsto
their providers;
 examine suspected providers billing activities across many plans;
 determine accurately whether known fraud schemes from other health care
programs are occurring in MA; and
 analyze MAOs reasons for denial of certain procedures andcompare this
information across plans in a particular geographic area to understand fraud
patterns and alert plans topotentialschemes.
The lack of a denied-claim indicator in MA substantially increases the time and
resources needed for program integrity activities, such as investigating
allegations of provider fraud. Any attempts by
oversight staff to identify denied claims in the
MA program increase staff workload, as shown in
Exhibit 3. To definitively identify denied claims in
the MA encounter data, the MEDICs, OIG, and
DOJmust request that MAOs (or providers)
identify the denied claims in a subsetof MA
encounter data. While able to furnish this
information, MAOs vary in the timeframe needed
to gather and submitthis information to oversight entities. The MEDICs estimated
that itmay take up to 60 days or more for MAOs to provide the requested data. In
addition, the type and format ofdata provided vary across MAOs, requiring even
more time for oversight entities to decipher data formats and identify denied claims.
IssueBrief:TheInabilityToIdentifyDeniedClaimsinMedicareAdvantageHindersFraudOversight
OEI-03-21-00380 Results|7 Exhibit 3: The lack of a denied-claim indicator necessitates additional steps
to investigate allegations of provider fraud in MA as compared to CMSs
other health care programs.
Source:OIGanalysisofoversightentitiesresponsesto2022OIGinterviewsandquestionnaires.
The lack of a denied-claim indicator limits the scope and accuracy of efforts to
conduct analyses and detect fraud, waste, and abuse. Because MA encounter data
do not contain a denied-claim indicator, oversightentities are unable to use MA
encounter data to obtain a complete and accurate picture ofbilling and payment
patterns across numerous plans and/or providers.29 Without requesting and receiving
data from MAOs, oversight staff are unable to accurately distinguish between paid
and denied claims. When requestingthat MAOs identify their denied claims, staff
must limit their data request to selectMAOs. For example, the MEDICs may request
data from only the top three to five plans impacted by potential fraud due to the time
and resources involved in requesting, understanding, and analyzing MAOs data. This
limits the scope ofprogram integrity contractors efforts to determine the fullimpact
ofa providers fraud activities across allplans. In addition, without removing denied
claims from their analyses ofthe MA encounter data, the MEDICs may not be able to
accurately identify the top plans impacted by potentialfraud.
IssueBrief:TheInabilityToIdentifyDeniedClaimsinMedicareAdvantageHindersFraudOversight
OEI-03-21-00380 Results|8 Oversight entities rely on denied-claim indicators in Medicare
fee-for-service and Medicaid to enhance program oversight
Although CMS does not require a denied-claim indicator on MA encounter records, it
does for records ofservices for other health care programs. Toconduct analyses to
combat fraud, waste, and abuse in the Medicare fee-for-service and Medicaid
programs, CMS program integrity staff; OIG investigators and data analysts; and DOJ
health care fraud staff use denied-claim indicators to identify denied claims in the
paymentdata. Once identified, these denied claims may be (1)analyzed to detect
potential fraud schemesor (2) removed from analyses ofinappropriate billing
patterns among paid claims. When such analyses are conducted, denied-claim
indicators provide an efficient and definitive method to identify denied claims in the
Medicare fee-for-service and Medicaid data.
For other CMS health care programs, oversight entities use denied-claim
indicators to identify and analyze denied claims for known or potential fraud
schemes. CMS, OIG, and DOJ reviewdenied claims in their efforts to identify
providers that engage in fraud. A claim can be denied for various reasons, and the
denialmay indicate an intentby the
provider to engage in fraud. For example,
as part of the national enforcement
initiative known as Operation Brace
Yourself, CMS, OIG, and DOJ reviewed
denied claims in Medicare fee-for-service
to identify medicalequipmentsuppliers
that billed for services that were never
provided. OIG routinely identifies these
types offraudulent billing practices in
medicalequipment fraud investigations.
For other analyses, CMS and OIG may use
denied claims to understand the providers intent or to predict and/or identify
potential fraud. CMS may also detect potential fraud by analyzing the percentage of
denied claims occurring within a certain timeframe for a provider. The use ofdenied-
claim indicators enhances the scope ofoversight activities for these other CMS health
care programs.
To enhance the accuracy and efficiency of fraud analyses for other CMS health
care programs, oversight entities often remove denied claims to focus only on
paid claims. By focusing only on paid claims, CMS, OIG,
and DOJ can more accurately identify inappropriate billing
patterns or fraud schemes in which providers received
compensation. Excluding denied claims can also be more
efficient, as it reduces the volume of claims under review. In
addition, oversight entities may remove denied claims from
analyses to estimate the dollar amountthat Medicare or
IssueBrief:TheInabilityToIdentifyDeniedClaimsinMedicareAdvantageHindersFraudOversight
OEI-03-21-00380 Results|9 Medicaid paid to providers or insurers due to fraudulent activities. For example, for
purposes ofa sentencingrecommendation, understanding which claims were denied
and which were paid would be helpfulin determining loss amounts.
CMSs MA payment group reported that CMS does not require
MAOs to submit a denied-claim indicator because such an
indicator is not currently needed to determine payments to
MAOs
According to CMSs MA payment group, CMS does not require MAOs to submita
denied-claim indicator because theMA paymentgroup does not need this indicator
to determine MA risk-adjusted payments or to understandwhat services have been
provided to enrollees. CMSs MA paymentgroup noted that itwould be an
unnecessaryburden on MAOs to modify their systems to submitthis information
because themain purpose ofthe MA encounter data is tocollect information on MA
enrollees service utilization and determine MA payments. Currently, theelectronic
form that MAOs use to submitencounter recordsto CMS does not contain a field for
a denied-claim indicator. CMSs MA payment group said that to use this form to
collect a denied-claim indicator, CMS would need to (1)explore repurposing an
unused field on this electronic form or (2)request industry-wide modification to this
electronic form. Notably, the private companies that cover most MA enrollees also
have contracts to offer Medicaid managed care plans, and Medicaid requires the
submission of denied-claim indicators. As such,MAOs that also have Medicaid lines
ofbusiness have demonstrated their ability to make accommodations in their systems
to meet this requirementfor submitting denied-claim indicators for Medicaid
managed care encounter data. In addition, an indicator in the MA encounter data
may reducethe burdenon MAOs to provide information on their denied claims to
oversight entities.
Although CMS does not currently need adenied-claim indicator to determine
risk-adjusted payments,such an indicator could be relevant to determining accurate
MA payments if CMS transitions to using the MA encounterdatarather than
Medicare fee-for-service datatoestimate expected health care costs. While CMS
has not announced any specific plans or timeframes for making this transition, it has
announced its intentto eventually use the MA encounter data to estimate these
expected costs. This transition has the potential to improve the accuracyofcapitated
payments to MAOs by compensating MAOs for the cost ofproviding care to enrollees
in MA, rather than in Medicare fee-for-service. If CMS goes forward with this
transition, it willnot be able to definitively exclude denied claims, which may lead to
overestimating expectedcosts and limitpotentialcost savings to the MA program.
Currently, when CMS estimates expected costs using Medicare fee-for-service data, it
excludes denied claims from these calculations.
IssueBrief:TheInabilityToIdentifyDeniedClaimsinMedicareAdvantageHindersFraudOversight
OEI-03-21-00380 Results|10 CONCLUSION AND RECOMMENDATIONS
Knowing whether MAOs paid or denied claims is critical for oversight entities that use
the MA encounter data to detect inappropriate billing patterns and investigate fraud,
waste, and abuse effectively and efficiently. However, CMS does not require MAOs to
include adenied-claim indicator on encounter records to identify denied claims in the
MA encounter data.
Requiring a denied-claim indicator on MA encounter data would enhance program
oversight and be consistent with program integrity efforts in Medicare fee-for-service
and Medicaid. For these other CMS health care programs, oversight entities rely on
denied-claim indicators when using payment data to combat fraud, waste, and abuse.
CMS program integrity staff; OIG investigators and data analysts; and DOJhealth care
fraud staff reported that the lack of adenied-claim indicator in the MA encounter
data hinders the efficiency, scope, and accuracyoftheir program integrity oversight,
rendering itmore difficultto ensure that the MA program is operating properly.
Requiring MAOs to submitadenied-claim indicator in the MA encounter data would
enhance efforts to combat fraud, waste, and abuse in MA. A denied-claim indicator
also could be leveraged to reviewpotentialconcerns with access to care in MA, as
inappropriate paymentdenials may discourage providers from ordering needed care.
In addition, such an indicator in the MA encounter data may reduce the burden on
MAOs ofidentifying their denied claims for oversight entities. Finally, in the future, a
denied-claim indicator may also be needed ifCMS implements its plan to use MA
encounter data to enhance the accuracy of MA payments.
We recommend that CMS:
Require MAOs to definitively indicate on MA encounter data
records when they have denied payment for a service on a claim
To enhance the MA program, CMS should implement changes in the way MAOs
submitdata sothat it is apparent when the MAO has not paid a claim for a reported
service. Thelack ofsuch an indicator in the MA encounter data limits the efficiency,
scope, and accuracy ofoversightentities efforts tocombat fraud, waste, and abuse in
MA. Although changesin submission willnecessitate changes to MAOs systems,
companies have demonstrated their ability to report these indicators for Medicaid
managed care. Further,once any initialchallenges are addressed, an indicator will
greatly improve efforts toensure theintegrity of MA for the futureand may reduce
the burden toMAOs ofsubmitting denied-claim information to oversight entities for
fraud analyses. Specifically, CMS could implement changes that would require MAOs
to identify whether theMAO denied paymentfor the entire record or only certain
IssueBrief:TheInabilityToIdentifyDeniedClaimsinMedicareAdvantageHindersFraudOversight
OEI-03-21-00380 ConclusionandRecommendations|11 services (i.e.,claim lines) included on the record. Finally, CMS should provide
oversight entities, including the MEDICs and DOJ staff, with access to any data that
identify when the MAO has denied payment for aclaim.
IssueBrief:TheInabilityToIdentifyDeniedClaimsinMedicareAdvantageHindersFraudOversight
OEI-03-21-00380 ConclusionandRecommendations|12 AGENCY COMMENTS AND OIG RESPONSE
CMSdid not concur or nonconcur with our recommendation to require MAOs to
definitively indicate on MA encounter data records when they have denied payment
for a service on a claim. Instead, CMS acknowledged the potential ofthis information
to aid program integrity efforts but stated that it has not determined the feasibility
and burdenon MAOs of implementing this recommendation. CMS noted that to
make this determination, itwould need to assess what additional information MAOs
would be able to provide, ifany, given the existing format that MAOs use to report
encounter data. CMS alsostated that it willuse the information in this report to
enhance program integrity efforts as appropriate.
OIG understands CMSs need to balance administrative burden and reporting
requirements with the program integrity benefits. With respect to requiring MAOs to
definitively indicate when they have denied payment for a service on a claim, the
program integrity benefits would be substantial. For example, the ability to identify
denied claims in the MA encounterdata is criticalfor detecting inappropriate billing
patterns and pursuing fraud investigations. In addition, the availability ofa denied-
claim indicator in the MA encounterdata may (1) enhance CMSs and other entities
ability toperform reviews ofaccess to care in MA; (2)reduce some burden on MAOs
ofsubmitting denied-claim information to oversight entities for fraud analyses; and
(3)be needed if CMS implements its plan to use MA encounter data to enhance the
accuracy ofMA payments. We also note that many ofthe companies that participate
in MA have demonstrated their ability to report these indicators for their Medicaid
managed care plans.
OIG encourages CMS to implement this recommendation. We ask that, in its Final
Management Decision, CMS clarify its concurrence or nonconcurrence with our
recommendation; provide the resultsof its assessments offeasibility and burden or its
plans to make such assessments ifthey are needed; and detailits plans to enhance
program integrity on the basis ofthis report.
The fulltext of CMSs comments canbe found in Appendix B.
IssueBrief:TheInabilityToIdentifyDeniedClaimsinMedicareAdvantageHindersFraudOversight
OEI-03-21-00380 AgencyCommentsandOIGResponse|13 METHODOLOGY
Analysis of the 2019 MA encounter data
In May 2022, we extracted 772 million MA encounter recordsfrom CMSs Integrated
Data Repository for allrecords with dates ofservice in 2019 to identify the 667 million
encounter records that contained adjustment codes. We began this evaluation during
the COVID-19 pandemic. Because this evaluation examined the volume of MA
encounter records containing adjustment codes, we expected that if we selected a
timeframe during the pandemic, our results mightnot be indicative of the fullscope
ofpayment adjustments in the MA encounter data. Therefore, we focused the
analysis on records ofservices provided in 2019the most recent fullyear that
preceded the COVID-19 pandemic.
We summarized the number and types ofreasons that MAOs gave for paying
differently from providers billed for services provided to MA enrollees. Of the 755
MAOs that submitted MA encounterrecords for 2019, 51 didnot submit any records
containing an adjustment code.30 Data elements for adjustment codes are located on
both the header and claim line portion of the encounter record. While most MAOs
either always or mainly reported their adjustment codes at the claim line level, other
MAOs reported their codes at the header and/or line level.31 We also determined the
number andpercentageof MA encounter records in which the MAO reported an
adjustment code and a payment amount on the header portion of the record and/or
the line portion ofthe record.
Identification of adjustment codes that indicate potential denied claims. To
identify potentialdenied claims, we identified 55 million records containing
adjustment codes (1)with descriptions that reasonably indicate that the MAO may
have denied payment for the service,and (2)for which MAOs did not reportpayment
to providers on more than half ofthe records that contained the adjustment code.
Interviews and questionnaires
To determine whether there is a definitive method to identify denied claims in the MA
encounter data, we summarized responses to interviews and/or questionnaires
administered to CMS (including program integrity staff and its MA payment group).
In addition, we summarized responses to interviews and/or questionnaires
administered to CMS (including program integrity staff and Medicaid data staff)
regarding methods for identifying denied claims in the Medicare fee-for-service and
Medicaid data.
To identify whether the lack of a denied-claim indicator on services in the MA
encounter data hinders MA program oversight, we summarized responses to
interviews and questionnaires administered to CMS (including program integrity staff
IssueBrief:TheInabilityToIdentifyDeniedClaimsinMedicareAdvantageHindersFraudOversight
OEI-03-21-00380 Methodology|14 and the MEDICs); OIG investigators and data analysts; and DOJ health care fraud staff,
regarding:
 their use of denied-claim indicators in Medicare fee-for-service and Medicaid
data to conduct analyses to detect and prevent fraud, waste, and abuse; and
 the impactthat the lack ofa denied-claim indicator in MA has on their ability
to conduct analyses to detect and prevent fraud, waste, and abuse.
We alsosummarized responses from CMSs MA payment group to questions that
addressed:
 CMSs reasons for not requiring a denied-claim indicator in the MA encounter
data; and
 the potentialchallenges ofrequiring a denied-claim indicator in the MA
encounter data.
Standards
We conducted this study in accordance with the Quality Standardsfor Inspection and
Evaluation issued by theCouncil ofthe Inspectors Generalon Integrity and Efficiency.
IssueBrief:TheInabilityToIdentifyDeniedClaimsinMedicareAdvantageHindersFraudOversight
OEI-03-21-00380 Methodology|15 APPENDIX A
List of 269 adjustment codes included on MA encounter records
submitted by MAOs to CMS for 2019
We identified 269 adjustment codes that appeared on MA encounter records
submitted by MAOs to CMS for 2019. As shown in ExhibitA-1, the number ofrecords
with each code ranged from almost 540 million to just1 record. The 55 adjustment
codes that OIG identified as indicators ofpotentialdenied claim encounters are
identified in the table by a blue highlight.
Exhibit A-1: Number of 2019 MA encounter records that contained an adjustment code
Numberof
2019MA
Adjustment Encounter
Description
Code Recordswith
Adjustment
Codes1
Chargeexceedsfeeschedule/maximumallowableorcontracted/legislated
45 538,277,812
feearrangement.
3 Co-paymentamount. 182,907,217
253 Sequestration-reductioninFederalpayment. 171,992,197
2 Coinsuranceamount. 54,577,461
24 Chargesarecoveredunderacapitationagreement/managedcareplan. 46,072,731
131 Claimspecificnegotiateddiscount. 21,608,675
Thebenefitforthisserviceisincludedinthepayment/allowancefor
97 17,926,544
anotherservice/procedurethathasalreadybeenadjudicated.
96 Noncoveredcharge(s). 15,810,573
94 Processedinexcessofcharges. 15,135,161
1 Deductibleamount. 12,988,531
Processedbasedonmultipleorconcurrentprocedurerules(Forexample
59 12,426,279
multiplesurgeryordiagnosticimaging,concurrentanesthesia).
246 Thisnonpayablecodeisforrequiredreportingonly. 10,612,553
16 Claim/servicelacksinformationorhassubmission/billingerror(s). 8,825,406
18 Exactduplicateclaim/service. 7,911,595
Theimpactofpriorpayer(s)adjudicationincludingpaymentsand/or
23 7,709,108
adjustments.
104 Managedcarewithholding. 7,301,122
A1 Claim/servicedenied. 6,881,112
234 Thisprocedureisnotpaidseparately. 5,596,714
AdjustmentcodeformandatedFederal,State,orlocallaw/regulationthat
223 isnotalreadycoveredbyanothercodeandismandatedbeforeanewcode 5,489,008
canbecreated.
IssueBrief:TheInabilityToIdentifyDeniedClaimsinMedicareAdvantageHindersFraudOversight
OEI-03-21-00380 AppendixA|16 Thesearenon-coveredservicesbecausethisisnotdeemedamedical
50 4,332,382
necessitybythepayer.
Previouslypaid. Paymentforthisclaim/servicemayhavebeenprovidedin
B13 3,143,094
apreviouspayment.
29 Thetimelimitforfilinghasexpired. 2,780,330
4 Theprocedurecodeisinconsistentwiththemodifierused. 2,686,536
225 Penaltyorinterestpaymentbypayer. 2,497,563
Anattachment/otherdocumentationisrequiredtoadjudicatethis
252 2,237,899
claim/service.
197 Precertification/authorization/notification/pre-treatmentabsent. 2,095,508
Thisservice/equipment/drugisnotcoveredunderthepatientscurrent
204 1,547,601
benefitplan.
102 Majormedicaladjustment. 1,450,018
B9 Patientisenrolledinahospice. 1,400,268
242 Servicesnotprovidedbynetwork/primarycareproviders. 1,227,822
11 Thediagnosisisinconsistentwiththeprocedure. 1,190,175
243 Servicesnotauthorizedbynetwork/primarycareproviders. 1,170,363
Claim/servicenotcoveredbythispayer/contractor. Youmustsendthe
109 1,160,412
claim/servicetothecorrectpayer/contractor.
119 Benefitmaximumforthistimeperiodoroccurrencehasbeenreached. 1,018,597
22 Thiscaremaybecoveredbyanotherpayerpercoordinationofbenefits. 785,529
Exceedsthecontractedmaximumnumberofhours/days/unitsbythis
222 723,684
providerforthisperiod. Thisisnotpatientspecific.
Theclaim/servicehasbeentransferredtotheproperpayer/processorfor
B11 721,835
processing. Claim/servicenotcoveredbythispayer/processor.
Paymentadjustedbecausethepayerdeemstheinformationsubmitted
151 692,499
doesnotsupportthismany/frequencyofservices.
272 Coverage/programguidelineswerenotmet. 642,528
Thisservice/procedurerequiresthataqualifyingservice/procedurebe
B15 receivedandcovered. Thequalifyingotherservice/procedurehasnotbeen 616,142
received/adjudicated.
Deniedforfailureofthisprovider,anotherproviderorthesubscriberto
228 601,228
supplyrequestedinformationtoapreviouspayerfortheiradjudication.
143 Portionofpaymentdeferred. 581,616
5 Theprocedurecode/typeofbillisinconsistentwiththeplaceofservice. 525,403
Thisproviderwasnotcertified/eligibletobepaidforthisprocedure/service
B7 475,740
onthisdateofservice.
6 Theprocedure/revenuecodeisinconsistentwiththepatientsage. 435,712
170 Paymentisdeniedwhenperformed/billedbythistypeofprovider. 392,344
256 Servicenotpayablepermanagedcarecontract. 392,050
182 Proceduremodifierwasinvalidonthedateofservice. 388,790
288 Referralabsent. 334,652
Payerdeemstheinformationsubmitteddoesnotsupportthislevelof
150 325,294
service.
186 Levelofcarechangeadjustment. 299,443
Informationrequestedfromthebilling/renderingproviderwasnot
226 278,929
providedornotprovidedtimelyorwasinsufficient/incomplete.
144 Incentiveadjustment,e.g.preferredproduct/service. 259,933
IssueBrief:TheInabilityToIdentifyDeniedClaimsinMedicareAdvantageHindersFraudOversight
OEI-03-21-00380 AppendixA|17 B16 Newpatientqualificationswerenotmet. 247,896
39 Servicesdeniedatthetimeauthorization/pre-certificationwasrequested. 219,565
Procedure/treatment/drugisdeemedexperimental/investigationalbythe
55 218,582
payer.
167 This(these)diagnosis(es)is(are)notcovered. 212,389
185 Therenderingproviderisnoteligibletoperformtheservicebilled. 202,652
273 Coverage/programguidelineswereexceeded. 196,378
Claimreceivedbythemedicalplan,butbenefitsnotavailableunderthis
297 plan. Submittheseservicestothepatientsvisionplanforfurther 192,532
consideration.
181 Procedurecodewasinvalidonthedateofservice. 181,633
146 Diagnosiswasinvalidforthedate(s)ofservicereported. 178,318
237 Legislated/regulatorypenalty. 171,227
Thisprocedureorprocedure/modifiercombinationisnotcompatiblewith
anotherprocedureorprocedure/modifiercombinationprovidedonthe
236 170,529
samedayaccordingtotheNationalCorrectCodingInitiativeorworkers
compensationStateregulations/feeschedulerequirements.
192 Nonstandardadjustmentcodefrompaperremittance. 167,228
203 Discontinuedorreducedservice. 162,812
198 Precertification/notification/authorization/pre-treatmentexceeded. 161,957
133 Thedispositionofthisservicelineispendingfurtherreview. 152,712
245 Providerperformanceprogramwithhold. 146,630
95 Planproceduresnotfollowed. 145,625
147 Providercontracted/negotiatedrateexpiredornotonfile. 130,146
Treatmentwasdeemedbythepayertohavebeenrenderedinan
58 114,618
inappropriateorinvalidplaceofservice.
Theapplicablefeeschedule/feedatabasedoesnotcontainthebilledcode.
Pleaseresubmitabillwiththeappropriatefeeschedule/feedatabase
P7 114,478
code(s)thatbestdescribetheservice(s)providedandsupporting
documentationifrequired.
Originalpaymentdecisionisbeingmaintained. Uponreview,itwas
193 109,607
determinedthatthisclaimwasprocessedproperly.
161 Providerperformancebonus. 109,168
107 Therelatedorqualifyingclaim/servicewasnotidentifiedonthisclaim. 92,929
108 Rent/purchaseguidelineswerenotmet. 91,720
231 Mutuallyexclusiveprocedurescannotbedoneinthesameday/setting. 91,474
Priorcontractualreductionsrelatedtoacurrentperiodicpaymentaspart
271 ofacontractualpaymentschedulewhendeferredamountshavebeen 88,821
previouslyreported.
137 Regulatorysurcharges,assessments,allowancesorhealthrelatedtaxes. 88,195
Allowedamounthasbeenreducedbecauseacomponentofthebasic
B10 procedure/testwaspaid. Thebeneficiaryisnotliableformorethanthe 86,826
chargelimitforthebasicprocedure/test.
Theprocedurecodeisinconsistentwiththeprovidertype/specialty
8 84,203
(taxonomy).
Precertification/authorization/notification/pre-treatmentnumbermaybe
284 81,303
validbutdoesnotapplytothebilledservices.
129 Priorprocessinginformationappearsincorrect. 76,863
IssueBrief:TheInabilityToIdentifyDeniedClaimsinMedicareAdvantageHindersFraudOversight
OEI-03-21-00380 AppendixA|18 Perregulatoryorotheragreement. Theprovidercannotcollectthis
209 amountfromthepatient. However,thisamountmaybebilledto 75,415
subsequentpayer. Refundtopatientifcollected.
Claimreceivedbythemedicalplan,butbenefitsnotavailableunderthis
280 plan. Submittheseservicestothepatientspharmacyplanforfurther 72,796
consideration.
Thisisanon-coveredservicebecauseitisaroutine/preventiveexamora
49 diagnostic/screeningproceduredoneinconjunctionwitha 72,441
routine/preventiveexam.
100 Paymentmadetopatient/insured/responsibleparty. 71,372
31 Patientcannotbeidentifiedasourinsured. 69,878
Attachment/otherdocumentationreferencedontheclaimwasnot
163 63,894
received.
216 Basedonthefindingsofarevieworganization. 63,794
B20 Procedure/servicewaspartiallyorfullyfurnishedbyanotherprovider. 58,005
44 Prompt-paydiscount. 56,028
105 Taxwithholding. 53,374
27 Expensesincurredaftercoverageterminated. 46,905
78 Non-covereddays/roomchargeadjustment. 45,219
35 Lifetimebenefitmaximumhasbeenreached. 43,425
Payerdeemstheinformationsubmitteddoesnotsupportthislengthof
152 42,424
service.
Theattachment/otherdocumentationthatwasreceivedwasincompleteor
251 41,398
deficient. Thenecessaryinformationisstillneededtoprocesstheclaim.
54 Multiplephysicians/assistantsarenotcoveredinthiscase. 39,601
115 Procedurepostponed,canceled,ordelayed. 39,589
Nototherwiseclassifiedorunlistedprocedurecode(CPT/HCPCS)was
189 38,598
billedwhenthereisaspecificprocedurecodeforthisprocedure/service.
Predetermination:anticipatedpaymentuponcompletionofservicesor
101 38,335
claimadjudication.
172 Paymentisadjustedwhenperformed/billedbyaproviderofthisspecialty. 35,513
20 Thisinjury/illnessiscoveredbytheliabilitycarrier. 33,149
7 Theprocedure/revenuecodeisinconsistentwiththepatientsgender. 32,334
PaymentisincludedintheallowanceforaSkilledNursingFacility(SNF)
190 30,609
qualifiedstay.
B12 Servicesnotdocumentedinpatientsmedicalrecords. 29,500
B14 Onlyonevisitorconsultationperphysicianperdayiscovered. 29,222
Procedure/treatmenthasnotbeendeemedproventobeeffectivebythe
56 25,877
payer.
Paymentisdeniedwhenperformed/billedbythistypeofproviderinthis
171 25,692
typeoffacility.
Indemnificationadjustment-compensationforoutstandingmember
121 24,652
responsibility.
Thebenefitforthisserviceisincludedinthepayment/allowancefor
P14 24,581
anotherservice/procedurethathasbeenperformedonthesameday.
208 NationalProviderIdentifier-notmatched. 24,032
Chargesforoutpatientservicesarenotcoveredwhenperformedwithina
60 23,882
periodoftimepriortoorafterinpatientservices.
IssueBrief:TheInabilityToIdentifyDeniedClaimsinMedicareAdvantageHindersFraudOversight
OEI-03-21-00380 AppendixA|19 89 Professionalfeesremovedfromcharges. 22,813
70 Costoutlier-adjustmenttocompensateforadditionalcosts. 22,802
Patientisresponsibleforamountofthisclaim/servicethroughsetaside
201 21,908
arrangementorotheragreement.
199 Revenuecodeandprocedurecodedonotmatch. 21,838
202 Noncoveredpersonalcomfortorconvenienceservices. 19,643
21 Thisinjury/illnessistheliabilityoftheno-faultcarrier. 19,268
10 Thediagnosisisinconsistentwiththepatientsgender. 17,518
Thisisawork-relatedinjury/illnessandthustheliabilityoftheworkers
19 17,392
compensationcarrier.
215 Basedonsubrogationofathird-partysettlement. 14,743
9 Thediagnosisisinconsistentwiththepatientsage. 14,368
142 MonthlyMedicaidpatientliabilityamount. 13,560
140 Patient/Insuredhealthidentificationnumberandnamedonotmatch. 12,873
Informationrequestedfromthepatient/insured/responsiblepartywasnot
227 12,855
providedorwasinsufficient/incomplete.
26 Expensesincurredpriortocoverage. 12,657
169 Alternatebenefithasbeenprovided. 11,957
183 Thereferringproviderisnoteligibletorefertheservicebilled. 11,735
206 NationalProviderIdentifiermissing. 11,137
B22 Thispaymentisadjustedbasedonthediagnosis. 10,883
40 Chargesdonotmeetqualificationsforemergent/urgentcare. 9,501
103 Providerpromotionaldiscount(e.g.,seniorcitizendiscount). 9,348
235 Salestax. 8,573
110 Billingdatepredatesservicedate. 8,052
249 Thisclaimhasbeenidentifiedasareadmission. 7,876
135 Interimbillscannotbeprocessed. 7,555
A8 UngroupableDRG. 6,859
Attachment/otherdocumentationreferencedontheclaimwasnotreceived
164 6,506
inatimelyfashion.
Informationfromanotherproviderwasnotprovidedorwas
148 6,465
insufficient/incomplete.
132 Prearrangeddemonstrationprojectadjustment. 6,365
Theattachment/otherdocumentationthatwasreceivedwastheincorrect
250 5,349
attachment/document. Theexpectedattachment/documentisstillmissing.
Paymentadjustedbecausepre-certification/authorizationnotreceivedina
210 5,229
timelyfashion.
B8 Alternativeserviceswereavailable,andshouldhavebeenutilized. 5,066
B1 Non-coveredvisits. 4,796
287 Referralexceeded. 4,704
178 Patienthasnotmettherequiredspenddownrequirements. 4,569
274 Fee/ServicenotpayableperpatientCareCoordinationarrangement. 4,482
134 Technicalfeesremovedfromcharges. 3,954
153 Payerdeemstheinformationsubmitteddoesnotsupportthisdosage. 3,797
Lifetimebenefitmaximumhasbeenreachedforthisservice/benefit
149 3,200
category.
195 Refundissuedtoanerroneousprioritypayerforthisclaim/service. 2,823
130 Claimsubmissionfee. 2,598
IssueBrief:TheInabilityToIdentifyDeniedClaimsinMedicareAdvantageHindersFraudOversight
OEI-03-21-00380 AppendixA|20 177 Patienthasnotmettherequiredeligibilityrequirements. 2,528
112 Servicenotfurnisheddirectlytothepatientand/ornotdocumented. 2,527
69 Dayoutlieramount. 2,435
Precertification/authorization/notification/pre-treatmentnumbermaybe
296 1,904
validbutdoesnotapplytotheprovider.
91 Dispensingfeeadjustment. 1,799
Claimspanseligibleandineligibleperiodsofcoverage. Rebillseparate
239 1,791
claims.
Claimreceivedbythemedicalplan,butbenefitsnotavailableunderthis
291 plan. Claimhasbeenforwardedtothepatientsdentalplanforfurther 1,735
consideration.
Claimreceivedbythemedicalplan,butbenefitsnotavailableunderthis
300 plan. ClaimhasbeenforwardedtothepatientsBehavioralHealthPlanfor 1,634
furtherconsideration.
136 Failuretofollowpriorpayerscoveragerules. 1,319
Claimreceivedbythemedicalplan,butbenefitsnotavailableunderthis
270 plan. Submittheseservicestothepatientsdentalplanforfurther 1,104
consideration.
85 Patientinterestadjustment. 1,084
B4 Latefilingpenalty. 1,079
261 Theprocedureorserviceisinconsistentwiththepatientshistory. 1,071
200 Expensesincurredduringlapseincoverage. 1,023
Theprescribing/orderingproviderisnoteligibletoprescribe/orderthe
184 1,005
servicebilled.
ProcedurebilledisnotauthorizedperyourClinicalLaboratory
B23 959
ImprovementAmendment(CLIA)proficiencytest.
Patientidentificationcompromisedbyidentitytheft. Identityverification
224 844
requiredforprocessingthisandfutureclaims.
51 Thesearenon-coveredservicesbecausethisisa pre-existingcondition. 770
179 Patienthasnotmettherequiredwaitingrequirements. 750
106 Patientpaymentoption/electionnotineffect. 702
118 ESRDnetworksupportadjustment. 642
286 Appealtimelimitsnotmet. 622
299 Thebillingproviderisnoteligibletoreceivepaymentfortheservicebilled. 615
ConsumerSpendingAccountpayments(includesbutisnotlimitedto
187 FlexibleSpendingAccount,HealthSavingsAccount,HealthReimbursement 568
Account,etc.).
282 Theprocedure/revenuecodeisinconsistentwiththetypeofbill. 467
211 NationalDrugCodes(NDC)noteligibleforrebate,arenotcovered. 448
Claimreceivedbythemedicalplan,butbenefitsnotavailableunderthis
298 plan. Claimhasbeenforwardedtothepatientsvisionplanforfurther 439
consideration.
207 NationalProvideridentifier-invalidformat. 421
155 Patientrefusedtheservice/procedure. 418
Theseservicesweresubmittedafterthispayersresponsibilityfor
166 392
processingclaimsunderthisplanended.
160 Injury/illnesswastheresultofanactivitythatisabenefitexclusion. 375
173 Service/equipmentwasnotprescribedbyaphysician. 375
IssueBrief:TheInabilityToIdentifyDeniedClaimsinMedicareAdvantageHindersFraudOversight
OEI-03-21-00380 AppendixA|21 A5 MedicareclaimPPScapitalcostoutlieramount. 366
276 Servicesdeniedbythepriorpayer(s)arenotcoveredbythispayer. 332
Thedispositionoftheclaim/serviceisundeterminedduringthepremium
paymentgraceperiod,perHealthInsuranceExchangerequirements. This
257 330
claim/servicewillbereversedandcorrectedwhenthegraceperiodends
(duetopremiumpaymentorlackofpremiumpayment).
P8 Claimisunderinvestigation. 326
PaymentdeniedbasedontheMedicalPaymentsCoverage(MPC)and/or
P21 PersonalInjuryProtection(PIP)benefitsjurisdictionalregulations,or 306
paymentpolicies.
12 Thediagnosisisinconsistentwiththeprovidertype. 284
32 Ourrecordsindicatethepatientisnotaneligibledependent. 271
Contractedfundingagreement-subscriberisemployedbytheproviderof
139 268
services.
13 Thedateofdeathprecedesthedateofservice. 264
114 Procedure/productnotapprovedbytheFoodandDrugAdministration. 227
Notawork-relatedinjury/illnessandthusnottheliabilityoftheworkers
P2 215
compensationcarrier.
Services/chargesrelatedtothetreatmentofahospital-acquiredcondition
233 212
orpreventablemedicalerror.
A0 Patientrefundamount. 202
Claim/servicenotcoveredwhenpatientisincustody/incarcerated.
258 165
ApplicableFederal,Stateorlocalauthoritymaycovertheclaim/service.
260 ProcessedunderMedicaidACAEnhancedFeeSchedule. 157
34 Insuredhasnocoveragefornewborns. 144
14 Thedateofbirthfollowsthedateofservice. 140
240 Thediagnosisisinconsistentwiththepatientsbirthweight. 135
Procedureisnotlistedinthejurisdictionfeeschedule. Anallowancehas
P18 114
beenmadeforacomparableservice.
111 Notcoveredunlesstheprovideracceptsassignment. 113
TheClaimspanstwocalendaryears. Pleaseresubmitoneclaimper
268 104
calendaryear.
265 Adjustmentforadministrativecost. 100
MedicalPaymentsCoverage(MPC)orPersonalInjuryProtection(PIP)
P23 99
benefitsjurisdictionalfeescheduleadjustment.
Basedonpayerreasonableandcustomaryfees. Nomaximumallowable
P5 94
definedbylegislatedfeearrangement.
279 Servicesnotprovidedbypreferrednetworkproviders. 92
267 Claim/servicespansmultiplemonths. 87
266 Adjustmentforcompoundpreparationcost. 80
Claimreceivedbythemedicalplan,butbenefitsnotavailableunderthis
301 plan. SubmittheseservicestothepatientsBehavioralHealthPlanfor 80
furtherconsideration.
Medicalprovidernotauthorized/certifiedtoprovidetreatmenttoinjured
P16 76
workersinthisjurisdiction.
Thisproduct/procedureisonlycoveredwhenusedaccordingtoFDA
188 75
recommendations.
IssueBrief:TheInabilityToIdentifyDeniedClaimsinMedicareAdvantageHindersFraudOversight
OEI-03-21-00380 AppendixA|22 Priorpayers(orpayers)patientresponsibility(deductible,coinsurance,co-
275 73
payment)notcovered.
175 Prescriptionisincomplete. 66
33 Insuredhasnodependentcoverage. 64
232 Institutionaltransferamount. 49
174 Servicewasnotprescribedpriortodelivery. 47
Workerscompensationclaimadjudicatedasnon-compensable. ThisPayer
P4 42
notliableforclaimorservice/treatment.
Servicesbyanimmediaterelativeoramemberofthesamehouseholdare
53 37
notcovered.
PaymentadjustedbasedontheMedicalPaymentsCoverage(MPC)and/or
P22 PersonalInjuryProtection(PIP)benefitsjurisdictionalregulations,or 28
paymentpolicies.
158 Service/procedurewasprovidedoutsideoftheUnitedStates. 22
P12 Workerscompensationjurisdictionalfeescheduleadjustment. 21
76 Disproportionateshareadjustment. 17
Anesthesiaperformedbytheoperatingphysician,theassistantsurgeonor
194 16
theattendingphysician.
180 Patienthasnotmettherequiredresidencyrequirements. 15
Thedispositionoftherelatedproperty&casualtyclaim(injuryorillness)is
P11 14
pendingduetolitigation.
128 Newbornsservicesarecoveredinthemothersallowance. 13
212 Administrativesurchargesarenotcovered. 13
Claimspanseligibleandineligibleperiodsofcoverage,thisisthereduction
238 13
fortheineligibleperiod.
Paymentreducedtozeroduetolitigation. Additionalinformationwillbe
P10 12
sentfollowingtheconclusionoflitigation.
74 Indirectmedicaleducationadjustment. 9
Non-compliancewiththephysicianself-referralprohibitionlegislationor
213 9
payerpolicy.
PartialchargeamountnotconsideredbyMedicareduetotheinitialclaim
229 8
typeofbillbeing12X.
Transportationisonlycoveredtotheclosestfacilitythatcanprovidethe
117 7
necessarycare.
Claimreceivedbythemedicalplan,butbenefitsnotavailableunderthis
292 plan. Claimhasbeenforwardedtothepatientspharmacyplanforfurther 7
consideration.
Paymentreducedordeniedbasedonworkerscompensationjurisdictional
P13 7
regulationsorpaymentpolicies,useonlyifnoothercodeisapplicable.
Theadvanceindemnificationnoticesignedbythepatientdidnotcomply
116 6
withrequirements.
176 Prescriptionisnotcurrent. 6
P9 NoavailableorcorrelatingCPT/HCPCScodetodescribethisservice. 6
219 Basedonextentofinjury. 5
P24 PaymentadjustedbasedonPreferredProviderOrganization(PPO). 5
Claimreceivedbythedentalplan,butbenefitsnotavailableunderthis
254 plan. Submittheseservicestothepatientsmedicalplanforfurther 4
consideration.
IssueBrief:TheInabilityToIdentifyDeniedClaimsinMedicareAdvantageHindersFraudOversight
OEI-03-21-00380 AppendixA|23 295 PharmacyDirect/IndirectRemuneration(DIR). 4
A6 Priorhospitalizationor30-daytransferrequirementnotmet. 4
75 Directmedicaleducationadjustment. 3
Deductibleforprofessionalservicerenderedinaninstitutionalsettingand
247 3
billedonaninstitutionalclaim.
283 Attendingproviderisnoteligibletoprovidedirectionofcare. 3
285 Appealproceduresnotfollowed. 3
Workerscompensationcasesettled. Patientisresponsibleforamountof
P3 thisclaim/servicethroughWCMedicaresetasidearrangementorother 3
agreement.
66 Blooddeductible. 2
90 Ingredientcostadjustment. 2
263 Adjustmentforshippingcost. 2
61 Adjustedforfailuretoobtainsecondsurgicalopinion. 1
157 Service/procedurewasprovidedasaresultofanactofwar. 1
205 Pharmacydiscountcardprocessingfee. 1
241 LowIncomeSubsidy(LIS)co-paymentamount. 1
Coinsuranceforprofessionalservicerenderedinaninstitutionalsettingand
248 1
billedonaninstitutionalclaim.
264 Adjustmentforpostagecost. 1
269 Anesthesianotcoveredforthisservice/procedure. 1
Thedispositionoftheclaim/serviceisundeterminedduringthepremium
paymentgraceperiod,perHealthInsuranceSHOPExchangerequirements.
277 1
Thisclaim/servicewillbereversedandcorrectedwhenthegraceperiod
ends(duetopremiumpaymentorlackofpremiumpayment).
278 Performanceprogramproficiencyrequirementsnotmet. 1
State-mandatedrequirementforpropertyandcasualty,seeclaimpayment
P1 1
remarkscodeforspecificexplanation.
Procedurehasarelativevalueofzerointhejurisdictionfeeschedule,
P19 1
thereforenopaymentisdue.
P6 Basedonentitlementtobenefits. 1
Source:OIGanalysisof2019MAencounterrecordsfromCMSsIntegratedDataRepository.
1ThesearethenumberofMAencounterrecordsthatcontainedanadjustmentcodeontheheaderand/orlineportionoftherecord.
IssueBrief:TheInabilityToIdentifyDeniedClaimsinMedicareAdvantageHindersFraudOversight
OEI-03-21-00380 AppendixA|24 AGENCY COMMENTS
DATE: January 30, 2023
TO: AnnMaxwell
Deputy Inspector General for Evaluationand Inspections
Office of Inspector General
FROM: Chiquita Brooks-LaSure
Administrator
Centers for Medicare & Medicaid Services
SUBJECT: Office of Inspector General (OIG) Draft Issue Brief: The Inability to Identify
Denied Claims inMedicare Advantage Hinders Fraud Oversight (OEI-03-21-
00380)
The Centers for Medicare & Medicaid Services (CMS) appreciates the opportunity to review and
comment onthe Office of Inspector Generals (OIG) draft report. CMS is committed to its
oversight and enforcement of the requirements of the Medicare Advantage program.
CMS pays eachMedicare Advantage Organization(MAO) a monthly per-personamount for
each beneficiary enrolled inits plan. The per-personamount is adjusted for the risk of the
beneficiary, whichtakes into account differences inhealthstatus betweenenrolled beneficiaries.
Beneficiary risk scores are calculated withdiagnoses thatMAOs report to CMS. Diagnosis codes
used for risk adjustment must meet specific criteria, including thatthe diagnosis is documented
inthe medical record. MAOs must submit encounter data records to CMS inorder to report each
item and service furnished to anenrollee under the MAplanand provided to anenrollee,
regardless of the payment status of any claim (i.e. regardless of whether a claim is accepted or
denied for payment, as long as the item or service was received by the enrollee). Aclaim may be
denied for many administrative or coverage reasons. Aprovider may correct and re-submit a
claim thatwas denied for technicalreasons, and the MAO may subsequently pay it. The MAO is
not required to submit anupdate to CMS whenthe claim is paid because CMS collects encounter
data for risk adjustment, and payment status of a claim is not relevant to risk adjustment.
However, MAOs are required to submit adjustment reasoncodes when they have not paid the
exactamount that the provider billed. These codes explainchanges to the paid amount, suchas a
denial, reduction, or increase inpayment.
To ensure that MAOs are being paid appropriately, CMS conducts annual audits of a sample of
MAOs to evaluate compliance withthe terms of the MAOs contracts with CMS; inparticular,
the requirements associated withaccess to medical services, drugs, and other enrollee protections
required by Medicare. CMS also targets audits to areas of concern, suchas service types witha
highrate of denial. CMS notifies plans of noncompliance, suchas whenit believes a plans
coverage is more restrictive thanunder originalMedicare and represents a possible barrier to
accessing care. MAOs are required to submit corrective actionplans to address cited
IssueBrief:TheInabilityToIdentifyDeniedClaimsinMedicareAdvantageHindersFraudOversight
OEI-03-21-00380 AppendixB|25 deficiencies. Plans that are found to have repeated violations are subject to increasing penalties,
including Civil Monetary Penalties, intermediate sanctions (suspensionof payment, enrollment,
and/or marketing activities), and evencontract terminations. Inrecent years, CMS has increased
the transparency of audit findings by publishing them onthe Medicare.gov website and
developing a publicly available audit annual report with best practices MAOs canadopt to
continue improving performance. CMS is also committed to ensuring that diagnoses that MAOs
submit for risk adjustment are accurate. For example, CMS uses contract-level Risk Adjustment
Data Validation(RADV) audits to validate that diagnoses used for risk adjustment meetprogram
rules. RADVaudits measure the accuracy of the plan-submitted diagnostic informationthrough
medical record and coding reviews, and uses the results of these audits to identify overpayments
for individual MA contracts.
CMS appreciates the OIGs efforts inassessing Medicare Advantage data and will consider how
to use the informationfrom the report to further enhance program integrity efforts.
OIGs recommendations and CMS'responses are below.
OIG Recommendation
CMS should require MAOs to definitively indicate onMAencounter data records whenthey
have denied payment for a service ona claim.
CMS Response
CMS has focused onthe collectionof encounter data for risk adjustment purposes inthe MA
program. The payment status of a claim (i.e. whether a claim is accepted or denied for payment)
for anitem or service is not necessary for the purposes of risk adjustment. Further, a claim
submitted by a provider may be denied by the MAO for many administrative or coverage
reasons. Inaddition, the fields and codes onthe encounter data submission form are industry
standards that CMS does not have unilateral control over.
While this data could potentially be helpful for program integrity purposes, CMS has been
mindful of balancing immediate needs withlong-term goals for the use of the data, as well as
planburden. As a result, we have not made a determinationregarding the feasibility and burden
indefinitively indicating onMA encounter data records whenanMAO has denied payment for
anitem or service. CMS would need to assess what additional information plans would be able
to provide, if any, giventhe existing format inuse for plans to report encounters.
Finally, it is important to be aware of the fact that CMS does not receive all denied claims. For
example, plans cannot submit encounters to CMS for denied claims insituations whenthe claim
cannot be processed througha plans adjudicationsystem. Therefore, identifying records within
the encounter data system will not provide agencies withinformationonall denied claims.
Oversight agencies may still need to reachout to plans inorder to obtaininformationonall
denied claims. CMS will continue to focus data collectionefforts onfields inthe encounter data
record necessary for risk adjustment purposes, but will use the information inthis report to
further enhance program integrity efforts as appropriate.
CMS thanks OIG for their efforts onthis issue and looks forward to working with OIG onthis and
other issues inthe future.
IssueBrief:TheInabilityToIdentifyDeniedClaimsinMedicareAdvantageHindersFraudOversight
OEI-03-21-00380 AppendixB|26 ACKNOWLEDGMENTS AND CONTACT
Acknowledgments
Jacqualine Reid served as the team leader for this study. Others in the Office of
Evaluation and Inspections who conducted the study include Sadie Ellington and
Karolina Hill. Office of Evaluation and Inspections staff who provided support include
Joe Chiarenzelli, Rob Gibbons, Christine Moritz, Linda Ragone, and Sarah Swisher.
We would also like toacknowledge the contributions of other Office ofInspector
Generalstaff, including MarissaBaron, Julie Brown, and Francis Verslues.
This issue briefwas prepared under the direction of David Tawes, Acting Regional
Inspector Generalfor Evaluation and Inspections in the Philadelphia regionaloffice,
and Joanna Bisgaier, Deputy RegionalInspector General.
Contact
To obtain additionalinformation concerning this report, contact the Office ofPublic
Affairs at Public.Affairs@oig.hhs.gov. OIG reports and other information can be found
on the OIG website at oig.hhs.gov.
Office ofInspector General
U.S. Department ofHealth and Human Services
330 Independence Avenue, SW
Washington, DC 20201
IssueBrief:TheInabilityToIdentifyDeniedClaimsinMedicareAdvantageHindersFraudOversight
OEI-03-21-00380 AcknowledgmentsandContact|27 EENNDDNNOOTTEESS
1CMS,CMSFinancialReportFiscalYear2021,November2021,p.46. Accessedathttps://www.cms.gov/files/document/cms-
financial-report-fiscal-year-2021.pdfonMarch2,2022.
2AnMAOistheprivateentitythatcontractswithCMStoprovidecoverageofMedicarePartAandBservicesthroughprivate
ENDNOTES
healthplanoptions. MAOsdonotcoverhospicecostsforenrolleesthesecostsarecoveredthroughMedicare
fee-for-service. However,MAOsmayprovidesupplementalbenefitsthatarenotincludedinMedicarefee-for-service. MAOs
mayalsoofferprescriptiondrugcoverageunderMedicarePartD. MAisalsoknownasMedicarePartC.
3CMS,MedicareManagedCareManual,PaymentstoMedicareAdvantageOrganizations,Pub.No.100-16(Rev.118,September
19,2014),ch.8,10. Accessedathttps://www.cms.gov/regulations-and-guidance/guidance/manuals/
downloads/mc86c08.pdfonJuly25,2022.
442CFR422.310(b);CMS,EncounterDataSubmissionandProcessingGuide,MedicareAdvantageProgram,October2020,
ch.3,p.17. Accessedathttps://www.csscoperations.com/internet/csscw3_files.nsf/F/CSSCED_Submission_Processing_Guide
_20201009.pdf/$FILE/ED_Submission_Processing_Guide_20201009.pdfonMay17,2021.
5CMS,EncounterDataSubmissionandProcessingGuide,MedicareAdvantageProgram,October2020,ch.2,p.7. Accessedat
https://www.csscoperations.com/internet/csscw3_files.nsf/F/CSSCED_Submission_Processing_Guide_20201009.pdf/$FILE/ED_Su
bmission_Processing_Guide_20201009.pdfonMay17,2021.
6SocialSecurityAct,1853(a)(3)(B);42CFR422.310(b).
7CMS,MedicareManagedCareManual,RiskAdjustment,Pub.No.100-16(Rev.118,September19,2014),ch.7,70.1.
Accessedathttps://www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/Downloads/mc86c07.pdfon July26,2022.
8CMS,AnnouncementofCalendarYear(CY)2011MedicareAdvantageCapitationRatesandMedicareAdvantageandPartD
PaymentPoliciesandFinalCallLetter,p.19. Accessedathttps://www.cms.gov/Medicare/Health-
Plans/MedicareAdvtgSpecRateStats/Downloads/Announcement2011.pdfonApril27,2022.
9 UrbanInstituteandAmericanActionForum,UsingEncounterDatainMedicareAdvantageRiskAdjustment,January2019.
Accessedathttps://www.urban.org/sites/default/files/publication/99623/using_encounter_data_in_medicare_7.pdf onApril27,
2022.
10AccordingtotheMedicareAdvisoryPaymentCommission(MedPAC),MAplansimplementefficienciesthatreducetheir
healthcarecostsyearoveryear. However,duetoCMSspaymentpolicies,thesesavingsarenotpassedontoCMS. MedPAC
estimatesthatCMSspends4percentmoreonMAthanitwouldspendonMedicarefee-for-service. MedPAC,Reporttothe
Congress:MedicarePaymentPolicy,March2022,pp.415-417. Accessedathttps://www.medpac.gov/wp-
content/uploads/2022/03/Mar22_MedPAC_ReportToCongress_SEC.pdfonApril27,2022.
1142CFR422.100(a);CMS,MedicareManagedCareManual,BenefitsandBeneficiaryProtections,Pub.No.100-16(Rev.121,
April22,2016),ch.4,10.1-10.2. Accessedathttps://www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/Downloads
/mc86c04.pdfonSeptember20,2022.
12CMS,ReporttoCongress:AlternativePaymentModels&MedicareAdvantage,January2020,p.29. Accessedat
https://www.hhs.gov/guidance/sites/default/files/hhs-guidance-documents/APMs_and_MA_RTC_508.pdf onAugust24,2022.
1342CFR422.566(b)(3).
1442CFR422.566(a)-(b)and(d).
IssueBrief:TheInabilityToIdentifyDeniedClaimsinMedicareAdvantageHindersFraudOversight
OEI-03-21-00380 Endnotes|28 ENDNOTES
15OIG,MedicareAdvantageAppealOutcomesandAuditFindingsRaiseConcernsAboutServiceandPaymentDenials,
OEI-09-16-00410,September2018.
16CMS,MedicareClaimsProcessingManual,RemittanceAdvice,Pub.No.100-04(Rev.11414,May12,2022),ch.22,60.2.
Accessedathttps://www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/Downloads/clm104c22pdf.pdfonJune30,
2022.
17CMS,EncounterDataSubmissionandProcessingGuide,MedicareAdvantageProgram,October2020,ch.3,p.6. Accessedat
https://www.csscoperations.com/internet/csscw3_files.nsf/F/CSSCED_Submission_Processing_Guide_20201009.pdf/$FILE/ED_Su
ENDNOTES
bmission_Processing_Guide_20201009.pdfonMay17,2021.
18X12,ClaimAdjustmentReasonCodes. Accessedathttps://x12.org/codes/claim-adjustment-reason-codesonOctober
25,2022. X12ischarteredbytheAmericanNationalStandardsInstituteandmaintainselectronicdatainterchangestandards
forthehealthcareindustry,includingexternalcodelistsdistributedbytheWashingtonPublishingCompany.
19TheClaimAdjustmentStatusandReasonCodeMaintenanceCommitteemaintainstheadjustmentcodesetandupdatesit
threetimesayear.
20CMS,CMSGuidance:ReportingDeniedClaimsandEncounterRecordstoT-MSIS,May2020. Accessedat
https://www.medicaid.gov/medicaid/data-and-systems/macbis/tmsis/tmsis-blog/entry/53973onJuly20,2021.
21OIG,NationwideBraceScam,April2019. Accessedathttps://oig.hhs.gov/newsroom/media-materials/nationwide-brace-
scam/onJuly14,2022.
22OIG,TheMEDICProducedSomePositiveResultsbutMoreCouldBeDonetoEnhanceitsEffectiveness,OEI-03-17-00310,July
2018.
2342CFR422.310(f)(1)(iv).
24GAO,MedicareAdvantage:LimitedProgressMadetoValidateEncounterDataUsedtoEnsureProperPayments,January2017,
p.18. Accessedathttps://www.gao.gov/assets/gao-17-223.pdfonMarch2,2022.
25OIG,MedicareAdvantageAppealOutcomesandAuditFindingsRaiseConcernsAboutServiceandPaymentDenials,
OEI-09-16-00410,September2018.
26OIG,SomeMedicareAdvantageOrganizationDenialsofPriorAuthorizationRequestsRaiseConcernsAboutBeneficiaryAccess
toMedicallyNecessaryCare,OEI-09-18-00260,April2022. OIGidentifiedthesedenialsfromdatasetsthatweobtaineddirectly
fromMAOs,notfromtheMAencounterdata.
27Inadditiontotheadjustmentcode,thepayermayusearemittanceadviceremarkcode(hereafterremarkcode)tofurther
explainthereasonfortheadjustment. However,someremarkcodesalsoprovidelittleinformationaboutthestatusofthe
billedamount. Forexample,remarkcodeN33(Norecordofhealthcheckpriortoinitiationoftreatment)doesnot
definitivelyidentifywhethertheMAOdeniedpaymentfortheclaim. CMS,MedicareClaimsProcessingManual,Remittance
Advice,Pub.No.100-04(Rev.11414,May12,2022),ch.22,60.3. Accessedathttps://www.cms.gov/regulations-and-
Guidance/Guidance/Manuals/Downloads/clm104c22pdf.pdfonJune30,2022.
28Weincludedrecordscontainingadjustmentcodesthatappearedattheheaderand/orlineportionoftherecord.
29Inaddition,theMEDICsandDOJreportedthattheydonothaveaccesstoallpaymentvariablesintheMAencounterdata.
30WeusethetermMAOtorefertoauniqueMAcontract.
31MAOsthatmainlyreportedadjustmentcodesonlyatthelineleveldidsoonatleast90percentoftheirencounterrecords
thatcontainedthesecodes. JusttwoMAOsalwaysreportedtheircodesonlyattheheaderlevel(andneveratthelinelevel).
IssueBrief:TheInabilityToIdentifyDeniedClaimsinMedicareAdvantageHindersFraudOversight
OEI-03-21-00380 Endnotes|29