U.S. Department of Health and Human Services 
 
Office of Inspector General 
 
 
 
Some Medicare Advantage 
Companies Leveraged Chart 
Reviews and Health Risk 
Assessments To 
Disproportionately Drive 
Payments 
 
 
Suzanne Murrin 
Deputy Inspector General for Evaluation and Inspections 
September 2021, OEI-03-17-00474  U.S. Department of Health and Human Services 
O  ffice of Inspector General 
 
Report in Brief 
 
Se ptember 2021, OEI-03-17-00474 
 
Some Medicare Advantage Companies 
Why OIG Did This Review 
We undertook this evaluation 
Leveraged Chart Reviews and Health Risk 
because of concerns that 
companies with contracts under  Assessments To Disproportionately Drive 
Medicare Advantage (MA 
Payments 
companies) may leverage both 
chart reviews and health risk 
The Centers for Medicare & Medicaid 
assessments (HRAs) to maximize 
Key Takeaway  Services (CMS) risk-adjusts payments by 
risk-adjusted payments, without 
using beneficiaries diagnoses to pay higher 
beneficiaries receiving care for  Some Medicare Advantage 
capitated payments to MA companies for 
those diagnoses.  Unsupported  companies disproportionate 
beneficiaries expected to have higher-than-
risk-adjusted payments have been  use of chart reviews and 
average medical costs.  This may create 
a major driver of improper  health risk assessments to 
financial incentives for MA companies to 
payments in the MA program.  maximize risk-adjusted 
make beneficiaries appear as sick as 
payments raises concerns 
The risk-adjustment program is an  possible.  For CMS to risk-adjust payments, 
and highlights the need for 
important payment mechanism for  MA companies report beneficiaries 
more targeted oversight. 
MA.  It levels the playing field for  diagnosesbased on services provided to 
MA companies that enroll  beneficiariesto CMSs MA encounter data 
beneficiaries who need a costlier  system and the Risk Adjustment Processing System.   
level of care, which helps to ensure 
Chart reviews and HRAs are allowable sources of diagnoses for risk 
that these beneficiaries have 
adjustment.  A chart review is an MA companys review of a beneficiarys 
continued access to MA plans.  
medical record to identify diagnoses that a provider did not submit or 
Chart reviews and HRAs can be 
submitted in error.  An HRA occurs whenin order to diagnose a beneficiary 
tools for improving the MA 
and identify possible gaps in carea health care professional collects 
program.  However, two prior OIG 
information from a beneficiary about the beneficiarys health. 
evaluations found that the 
diagnoses that MA companies 
What OIG Found 
reported only on chart reviews or 
Our findings raise concerns about the extent to which certain MA companies 
HRAs in the 2016 encounter data
may have inappropriately leveraged both chart reviews and HRAs to 
i.e., on no other service records
maximize risk-adjusted payments.  We found that 20 of the 162 MA 
resulted in billions in risk-adjusted 
companies drove a disproportionate share of the $9.2 billion in payments 
payments for 2017.  These prior 
from diagnoses that were reported only on chart reviews and HRAs, and on 
evaluations raised concerns about 
no other service records.  These companies higher share of payments could 
the completeness of encounter 
not be explained by the size of their beneficiary enrollment.  Each company 
data; the validity of submitted 
generated a share of payments from these chart reviews and HRAs that was 
diagnoses on chart reviews or 
more than 25 percent higher than its share of enrolled MA beneficiaries.  
HRAs; and the quality of care 
provided to MA beneficiaries.  The  Among these 20 MA companies, 1 company further stood out in its use of 
current evaluation builds on those  chart reviews and HRAs to drive risk-adjusted payments without encounter 
two evaluations to identify MA  records of any other services provided to the beneficiaries for those 
companies that disproportionately  diagnoses.  This company had 40 percent of the risk-adjusted payments from 
drove increases in risk-adjusted  both mechanisms, yet enrolled only 22 percent of MA beneficiaries.  In 
payments from both chart reviews  addition, this company accounted for about a third of all payments from 
and HRAs.  diagnoses reported solely on chart reviews and more than half of all 
  
  
  Report in Brief continued 
Report No. OEI-03-17-00474 
 
 
 
How OIG Did This Review  payments from diagnoses reported solely on HRAs.  Further, almost all of its 
Using previously collected MA  HRAs were conducted in beneficiaries homes.  Since in-home HRAs are often 
encounter data from 2016, we  conducted by vendors hired by MA companies (and not likely conducted by 
determined whether any MA  beneficiaries primary care providers), this raises particular concerns about 
companies use of chart reviews  the quality of care coordination for these beneficiaries and the validity of 
and HRAs increased their  diagnoses that were reported on the HRAs. 
risk-adjusted payments 
What OIG Recommends  
disproportionately relative to their 
size and their peers.   CMS should (1) provide oversight of the 20 MA companies that had 
  a disproportionate share of the risk-adjusted payments from chart reviews 
and HRAs; (2) take additional actions to determine the appropriateness of 
  payments and care for the 1 MA company that substantially drove 
risk-adjusted payments from chart reviews and HRAs; and (3) perform 
periodic monitoring to identify MA companies that had a disproportionate 
share of risk-adjusted payments from chart reviews and HRAs.  To assist CMS 
with its efforts, we will provide information on which companies had 
a substantially disproportionate share of risk-adjusted payments from 
diagnoses that were reported only on chart reviews and/or HRAs.  CMS 
neither concurred nor nonconcurred with our three recommendations and 
stated that it will take our recommendations under consideration as part of 
its ongoing process to determine policy options for future years. 
 
 
     
TABLE OF CONTENTS 
 
 
 
 
 
 
BACKGROUND  1 
Methodology  5 
FINDINGS  8 
Twenty MA companies drove a disproportionate share of the $9.2 billion from chart reviews  8 
and HRAs  
One MA company stood out from its peers in its use of chart reviews and HRAs to drive  10 
risk-adjusted payments  
CONCLUSION AND RECOMMENDATIONS   15 
Provide oversight of the 20 MA companies that had a disproportionate share of the  16 
risk-adjusted payments from chart reviews and HRAs 
Take additional actions to determine the appropriateness of payments and care for the one  16 
MA company that substantially drove risk-adjusted payments from chart reviews and HRAs  
Perform periodic monitoring to identify MA companies that had a disproportionate share of    17 
risk-adjusted payments from chart reviews and HRAs  
AGENCY COMMENTS AND OIG RESPONSE  18 
APPENDIX A  19 
ACKNOWLEDGMENTS AND CONTACT  23 
ABOUT THE OFFICE OF INSPECTOR GENERAL  24 
ENDNOTES   25 
   
BACKGROUND 
 
 
Objective 
To determine whether any Medicare Advantage (MA) companies use of 
chart reviews and health risk assessments (HRAs) disproportionately 
increased risk-adjusted payments relative to those of their peers. 
 
 
Under MA, also known as Medicare Part C, CMS contracts with MA organizations 
(MAOs) to provide coverage of Parts A and B services through private health plan 
options.1  An MA company is a company that owns or has a controlling interest in one 
or more MAOs. 2  Ensuring that MA companies receive accurate payments to provide 
appropriate care to Medicare beneficiaries is critically important.  Toward this end, the 
Centers for Medicare & Medicaid Services (CMS) risk-adjusts payments by using 
beneficiaries diagnoses to pay higher capitated payments to MA companies for 
beneficiaries who are expected to have higher-than-average medical costs.  This 
payment policy may create financial incentives for MA companies to misrepresent 
beneficiaries health statuses and make beneficiaries appear to have additional 
illnesses and other conditions that would command higher payment. 
Unsupported risk-adjusted paymentspayments that are not supported by 
diagnoses documented in beneficiaries medical recordshave been a major driver of 
improper payments in the MA program.  The Office of Inspector General (OIG), CMS, 
the United States Department of Justice (DOJ), the Government Accountability Office 
(GAO), and the Medicare Payment Advisory Commission (MedPAC) have identified 
vulnerabilities related to MA companies inflating their beneficiaries risk scores.  Two 
prior OIG evaluations found that diagnoses that MA companies reported only on two 
specific sources of diagnoseschart reviews and HRAsresulted in billions in 
risk-adjusted payments for 2017.3  This evaluation builds on those two evaluations to 
identify MA companies that disproportionately drove increases in risk-adjusted 
payments from both chart reviews and HRAs.     
The Medicare Advantage Program 
In 2020, 40 percent of Medicare beneficiaries25 millionelected to enroll with MA 
companies rather than the Medicare fee-for-service program.  In fiscal year 2020, MA 
program costs were $314 billion of the total $780 billion in Medicare program costs.4 
MA risk-adjusted payments.  For each beneficiary enrolled, MA companies receive a 
capitated payment that reflects CMSs predicted cost of providing care to an MA 
Some MA Companies Leveraged Chart Reviews and Health Risk Assessments To Disproportionately Drive Payments 
OEI-03-17-00474  Background | 1  beneficiary.  CMS risk-adjusts payments to pay MA companies more for beneficiaries 
who have higher expected health care costs.   
CMS bases risk adjustments on MA beneficiaries demographic information and 
diagnoses from the prior year.  Exhibit 1 outlines CMSs risk-adjustment process as it 
relates to diagnoses that MA companies report.5 
Exhibit 1: MA risk-adjustment process 
Beneficiary  Provider submits  The MA company 
receives a  service information  submits a service record 
service.  to the MA company.  to the CMS encounter 
data system. 
CMS performs data  From the submitted  CMS risk-adjusts 
integrity checks on the  service record, CMS  payments and 
service record submitted  identifies diagnoses that  pays the MA 
by the MA company.  are eligible for risk  company. 
adjustment.   
   
Source: OIG summary of CMSs guidance on the MA risk-adjustment process.6 
The risk-adjustment process generally begins when the beneficiary receives a service 
or medical item from a provider.  The provider submits claims information, including 
diagnoses, to the MA company on the basis of the service or medical item provided 
to the beneficiary.  The MA company submits a record of the service (hereafter 
referred to as a service record) to CMSs MA encounter data system.  This service 
record contains claims information or administrative data, including the diagnoses.  
MA companies also submit data on beneficiaries diagnoses to CMS through the Risk 
Adjustment Processing System (RAPS).7   
CMS groups the risk-adjustment-eligible diagnoses into hierarchical condition 
categories (HCCs)categories of clinically related diagnoses.8  Each HCC has relative 
numerical values (i.e., relative factors) that represent the expected costs associated 
with treating the medical conditions in that category.9  A beneficiarys risk score 
Some MA Companies Leveraged Chart Reviews and Health Risk Assessments To Disproportionately Drive Payments 
OEI-03-17-00474  Background | 2  equals the sum of the relative factors that correspond with the beneficiarys HCCs and 
demographic characteristics.  The total risk-adjusted payment to an MA company 
for an enrolled beneficiary equals the risk score multiplied by the MA plans base 
payment rate.10 
Chart Reviews and Health Risk Assessments  
CMS allows chart reviews and HRAs to be used as sources of diagnoses for risk 
adjustment.  However, the use of chart reviews and HRAs by MA companies have 
raised concerns as they may use them inappropriately to collect diagnoses and 
increase their risk-adjusted payments. 
Chart Reviews 
In addition to reporting diagnoses to CMS on service records, MA companies may 
also perform chart reviewsretrospective reviews of beneficiaries medical record 
documentation to identify diagnoses that providers did not originally submit to the 
MA companies.11  To perform these reviews, MA companies may employ third-party 
vendors (hereafter referred to as vendors) to examine beneficiaries medical records.  
These vendors may use staff with clinical or coding experience, or they may use 
artificial intelligence software.  MA companies may report diagnoses identified by 
these reviews to the encounter data system in the form of chart review records.  CMS 
allows diagnoses reported on chart reviews to support risk-adjusted payments. 
In the MA encounter data, CMS does not require MA companies to link chart reviews 
to previously accepted records of services provided to beneficiaries.  Linking a chart 
review to a previously accepted service record would allow CMS and other oversight 
entities to identify the specific item or service that is associated with a diagnosis that 
is eligible for risk adjustment.12  However, CMS also permits MA companies to submit 
unlinked chart reviews that add diagnoses to the encounter data without identifying 
the specific items or services associated with the diagnoses.13  In addition, when MA 
companies do not know the actual procedure codes associated with diagnoses 
submitted on unlinked chart reviews, CMS allows MA companies to submit any 
procedure codes of their choosing; CMS refers to such codes as default procedure 
codes.14 
OIG concerns about chart reviews.  A December 2019 OIG report raised concerns 
that chart reviews may provide MA companies with opportunities to circumvent 
CMSs risk-adjustment rules and inflate risk-adjusted payments inappropriately
particularly when the chart reviews are not linked to service records.  Specifically, 
allowing MA companies to submit default procedure codes on chart reviews may 
create an opportunity for MA companies to circumvent the requirement for a face-to-
face visit for risk adjustment.15  OIG found that the diagnoses that MA companies 
reported only on chart reviewsand not on any service records in the encounter 
dataresulted in an estimated $6.7 billion in risk-adjusted payments for 2017.16  Of 
this $6.7 billion amount, CMS based $2.7 billion in risk-adjusted payments on 
Some MA Companies Leveraged Chart Reviews and Health Risk Assessments To Disproportionately Drive Payments 
OEI-03-17-00474  Background | 3  diagnoses that MA companies reported only on unlinked chart reviews.  For the 
unlinked chart reviews for which CMS uses procedure codes to identify diagnoses for 
risk adjustment, we found that 67 percent contained default procedure codes.  CMS 
does not have safeguards in place to prevent an MA company from receiving 
payment for a diagnosis that is not eligible for risk adjustment when the MA company 
chooses to submit a default procedure code that is eligible for risk adjustment.  In 
addition, for both chart reviews overall and unlinked chart reviews specifically, a small 
number of MAOs and MA companies drove a substantial portion of the resulting 
risk-adjusted payments.   
CMS concurred with the December 2019 reports recommendations to provide 
oversight of certain MAOs, conduct audits of diagnoses reported on chart reviews, 
and reassess allowing unlinked chart reviews as sources of diagnoses for risk 
adjustment.  In June 2020, CMS provided reports to MAOs that highlighted 
beneficiaries with unlinked chart reviews but no service records for 2018.17  CMS 
requested that MAOs that detected errors on the basis of these reports (1) provide 
explanation for such errors; (2) describe any planned actions to prevent further errors; 
and (3) provide information about whether corrected or missing encounter records 
would be resubmitted.  In addition, CMS has stated that it would include chart reviews 
in its audits of information from 2015 and 2016 that validate diagnoses for risk 
adjustment.  As of August 2021, CMS had not yet fully implemented these 
recommendations. 
DOJ and GAO concerns about chart reviews.  DOJ and GAO have also raised 
concerns about MA companies use of chart reviews for risk adjustment.  In 2017, the 
United States joined a whistleblower lawsuitfiled under the False Claims Actthat 
included an allegation that an MA company used the results of chart reviews to 
submit diagnoses that the treating physician did not originally report but did not use 
the chart review results to delete previously submitted diagnoses that these chart 
reviews had found to be invalid.18  In March 2020, the United States filed a False 
Claims Act lawsuit against another MA company regarding similar allegations.19  In 
2016, GAO stated its concern that diagnoses collected from MAOs retrospective chart 
reviews may be less likely to be supported by medical records than diagnoses 
submitted to MAOs by providers.20 
Health Risk Assessments 
Physicians or other health care professionals administer HRAs to collect information 
from beneficiaries about health status, health risks, and daily activities.  In the 
Medicare fee-for-service program, HRAs are part of beneficiaries annual wellness 
visits, which typically occur in physician offices or other health care facilities.21  CMS 
encourages MA companies to have providers conduct initial and annual HRAs.22  In 
the MA program, HRAs may also be conducted during other visits with beneficiaries
including visits to beneficiaries homes performed by third-party vendors hired by MA 
companies.  Care coordination that results from assessing a beneficiarys health risks 
Some MA Companies Leveraged Chart Reviews and Health Risk Assessments To Disproportionately Drive Payments 
OEI-03-17-00474  Background | 4  may include developing a plan of care; arranging services; delivering interventions; 
and reassessing and adjusting the plan of care as needed. 
OIG concerns about HRAs.  A September 2020 OIG report found that diagnoses that 
MA companies reported only on HRAs in the encounter data resulted in an estimated 
$2.6 billion in risk-adjusted payments for 2017.23, 24  HRAs conducted in beneficiaries 
homes generated $2.1 billion of these risk-adjusted payments.  Most of these in-
home HRAs were conducted by vendors that MA companies partner with or hire to 
conduct HRAs.  As with chart reviews, a small number of MAOs and MA companies 
drove a substantial portion of the risk-adjusted payments that resulted from HRAs 
overall and in-home HRAs specifically. 
Of this September 2020 reports five recommendations, CMS concurred with two 
recommendations to provide targeted oversight of certain MA companies that drove 
payments resulting from in-home HRAs.  CMS has not yet implemented these two 
recommendations.  CMS stated that it did not concur with three recommendations 
because it did not determine that a change in policy was warranted. 
CMS and MedPAC concerns about HRAs.  CMS and MedPAC have questioned 
whether MAOs use HRAs primarily as a strategy to find and submit more diagnoses to 
increase payments rather than a means to improve the care provided to beneficiaries.  
In 2015, CMS stated that it had observed an increase in in-home visits to assess MA 
enrollees.25  According to CMS, nonphysician practitioners working for vendors hired 
by MAOs usually performed in-home HRAs, and the resulting care coordination 
appeared to vary across plans.  At that time, CMS provided guidance to MA 
companies on best practices that promote the primary use of in-home HRAs as tools 
for improving care for MA enrollees, not just as a process for collecting diagnoses to 
increase risk-adjusted payments.26 
In 2016, MedPACa nonpartisan legislative-branch agency that provides Congress 
with analysis and policy advice on the Medicare programrecommended that the 
Secretary of Health and Human Services eliminate HRAs as a source of diagnoses for 
MA risk adjustment.  MedPAC contended that a small number of MAOs were using 
HRAs to increase Medicare payment without providing followup care.27  In addition, 
MedPAC raised concerns about the reportedly aggressive tactics that some MAOs use 
to recruit beneficiaries for in-home HRAs, and it questioned the accuracy of diagnoses 
identified only through in-home HRAs. 
Methodology 
Data Sources 
To determine whether any MA companies use of chart reviews and HRAs increased 
risk-adjusted payments disproportionately relative to those of their peers, we used 
previously collected data for 162 MA companies that had payments resulting from 
diagnoses reported only on chart reviews and HRAs.  For prior work, we extracted 
Some MA Companies Leveraged Chart Reviews and Health Risk Assessments To Disproportionately Drive Payments 
OEI-03-17-00474  Background | 5  chart reviews28 and HRAs29 in the 2016 MA encounter data, as well as beneficiary 
enrollment data stored within CMSs Integrated Data Repository (IDR).30  For 
beneficiaries who had risk-adjustment-eligible diagnoses that were reported only on 
chart reviews or HRAs, we determined the HCCs generated from mapping the 
diagnoses reported only on chart reviews or HRAs.31  We calculated estimates of the 
amount of risk-adjusted payments associated with each HCC by multiplying the MA 
plans monthly base payment rate by the relative factor of the HCC.32, 33  We then 
multiplied monthly amounts of payments by 12 to determine the annual estimated 
risk-adjusted payments from diagnoses reported only on chart reviews or HRAs and 
not on any other encounter records.    
For this evaluation, we combined these data for the 162 MA companies with 
estimated payments from chart reviews and HRAs into a dataset.  To compare 
risk-adjusted payments by MA companies enrollment size, we used CMS data on the 
number of beneficiaries enrolled with each MA company as of January 1, 2016.  
Analysis of Payment Amounts From Both Chart Reviews and 
HRAs 
Using our combined dataset of previously collected information, we determined the 
number of MA companies with payments from chart reviews and HRAs.  Overall, 
162 MA companies generated payments from diagnoses reported only on chart 
reviews and HRAs.  Of these companies, 126 had payments from both chart reviews 
and HRAs.  Of the 36 remaining companies, 30 had payments solely from HRAs and 
6 companies had payments solely from chart reviews.  For each of the 162 MA 
companies, we totaled their payments from these mechanisms.  We then assessed the 
distribution of payments across MA companies to determine whether any MA 
companies had higher amounts of risk-adjusted payments from chart reviews and 
HRAs.  In addition, we compared MA companies payments from chart reviews to their 
payments from HRAs, to determine whether any MA companies had higher amounts 
of risk-adjusted payments from chart reviews in comparison to their risk-adjusted 
payments from HRAs. 
We summarized the number and type of HCCs and diagnoses that increased 
payments as a result of chart reviews and HRAs.  For our analysis of diagnoses, we 
limited the analysis to diagnoses reported for at least 5,000 beneficiaries on in-home 
HRAs.  We also summarized the number of beneficiaries with diagnoses from chart 
reviews and HRAs.  Finally, we calculated and compared the difference between each 
MA companys share of the payments from these mechanisms and its share of MA 
enrollment.  We identified companies with a share of payments that exceeded their 
share of enrollment by more than 25 percent.  We used this same approach to 
determine whether certain MA companies had higher amounts of risk-adjusted 
payments from unlinked chart reviews34 and in-home HRAs.35  We are not including 
the names of MA companies in this report, but we will provide information to CMS 
regarding which companies had a substantially disproportionate share of 
risk-adjusted payments from diagnoses reported only on chart reviews and HRAs.  
Some MA Companies Leveraged Chart Reviews and Health Risk Assessments To Disproportionately Drive Payments 
OEI-03-17-00474  Background | 6  Limitations 
In calculating risk-adjusted payments for diagnoses reported only on chart reviews 
and HRAs during the previous evaluations, we estimated the potential impact of chart 
reviews and HRAs on the MA program for 2017 by using the encounter data 
submitted by MA companies for 2016.36  We did not review CMSs final payment data 
to MA companies for 2017.  CMSs actual monthly payments to MA companies may 
change each month if there are changes in certain beneficiary characteristics, such as 
long-term institutional status, dual eligibility status, and county of residence.  For 
analytic efficiency, we calculated payment estimates for the entire year using 
2016 encounter data and beneficiaries characteristics as of January 2016.  Finally, we 
did not incorporate diagnoses stored in CMSs RAPS data into our payment 
calculations because RAPS does not identify diagnoses collected from chart reviews or 
HRAs.37  However, we checked RAPS and found that 99.5 percent of the diagnoses 
included in our HRA payment analysis were also reported in RAPS.  
 
Standards 
We conducted this study in accordance with the Quality Standards for Inspection and 
Evaluation issued by the Council of the Inspectors General on Integrity and Efficiency. 
Some MA Companies Leveraged Chart Reviews and Health Risk Assessments To Disproportionately Drive Payments 
OEI-03-17-00474  Background | 7   
FINDINGS 
 
Twenty MA companies drove a disproportionate share of the 
$9.2 billion from chart reviews and HRAs 
MA companies generated an estimated $9.2 billion in risk-adjusted payments from 
diagnoses that were reported only on chart reviews and HRAs in the encounter data.  
Most of these companies (142 of 162) had an amount of payments proportional to or 
lower than their size, as defined by their share of enrolled beneficiaries.  However, 
20 companies had a share of payments that was disproportionally higher than their 
size.  For each of these top 20 companies, their share of payments from chart reviews 
and HRAs was more than 25 percent higher than their share of enrolled beneficiaries.  
Of the remaining 142 companies, 8 had a share of payments that was between 2 and 
17 percent higher than their share of enrolled beneficiaries.  The other 134 companies 
had a share of payments that was lower than their share of enrolled beneficiaries. 
The top 20 companies  Exhibit 2: Twenty MA companies drove over half 
generated $5.0 billion from  of the risk-adjusted payments from diagnoses 
chart reviews and HRAs that  submitted solely on chart reviews and HRAs, yet 
were the sole source of  they enrolled only 31 percent of MA beneficiaries. 
diagnoses in the encounter 
data.  These 20 companies 
generated 54 percent of the 
$9.2 billion in payments from 
diagnoses submitted solely on 
chart reviews and HRAs, but 
enrolled only 31 percent of MA 
beneficiaries, as shown in 
Exhibit 2.  In contrast, the other 
142 companies generated 
46 percent of the payments, but 
enrolled 69 percent of  Source: OIG estimation of 2017 payment amounts using 2016 MA 
encounter data from CMSs IDR. 
MA beneficiaries.  
 
Half of the 20 companies drove payments mainly using the types 
of chart reviews and HRAs that are more vulnerable to misuse 
Unlinked chart reviews and in-home HRAs may be particularly vulnerable to misuse by 
MA companies to maximize risk-adjusted payments inappropriately.  Specifically: 
  Unlinked chart reviews do not identify the specific item or service associated 
with the diagnoses and may often contain default procedure codes, which 
Some MA Companies Leveraged Chart Reviews and Health Risk Assessments To Disproportionately Drive Payments 
OEI-03-17-00474  Findings | 8  may provide opportunities for MA companies to circumvent CMS's 
face-to-face visit requirement for risk adjustment. 
 In-home HRAs are often conducted by vendors that partner with or are hired
by MA companies to conduct these assessments (and therefore are not likely
conducted by the beneficiary's own primary care provider).  This may create
gaps in care coordination for the beneficiary.
For half of the 20 MA companies that had a disproportionate share of payments from 
diagnoses that were reported solely on chart reviews and HRAs, unlinked chart 
reviews and/or in-home HRAs accounted for most of each companys combined 
payments.  These 10 companies each had more than 80 percent of their payments 
resulting from diagnoses that were reported only on unlinked chart reviews and/or 
in-home HRAs.  Seven of these 10 companies each generated more than 90 percent 
of their payments from diagnoses that were reported only on unlinked chart reviews 
and/or in-home HRAs. 
Compared to their peers, the top 20 companies more often had 
chart reviews and HRAs as the sole source of diagnoses for their 
beneficiaries  
Among the top 20 companies, a higher percentage of their enrolled beneficiaries had 
risk-adjustment-eligible diagnoses that were reported only on a chart review and/or 
HRA, in comparison to beneficiaries enrolled with the other 142 companies, as shown 
in Exhibit 3.  These companies reported diagnoses solely on these mechanisms for 
more than half (56 percent) of their enrolled beneficiaries, in contrast to only 
one-third (32 percent) of beneficiaries enrolled with the other 142 companies.   
Exhibit 3: The top 20 MA companies relied more heavily than their peers on 
diagnoses reported solely on chart reviews and HRAs.  
Source: OIG analysis of 2016 MA encounter data from CMSs IDR. 
The top 20 companies had risk-adjusted payments for 38 percent of their 
beneficiaries who had diagnoses that were reported only on chart reviews and/or 
HRAs.  The other 142 companies had risk-adjusted payments for 30 percent of their 
Some MA Companies Leveraged Chart Reviews and Health Risk Assessments To Disproportionately Drive Payments 
OEI-03-17-00474  Findings | 9  beneficiaries who had diagnoses that were reported only on chart reviews and/or 
HRAs.  
Just 12 health conditions accounted for two-thirds of the 
$5 billion in risk-adjusted payments from chart reviews and HRAs 
for the top 20 companies 
The HCCs generated by diagnoses reported only on chart reviews and HRAs included 
serious illnesses, such as diabetes and heart disease.  However, there were no service 
records directly demonstrating that beneficiaries who had a chart review and/or HRA 
received treatment for these serious health diagnoses.  For the 20 companies, 
68 percent of their risk-adjusted payments ($3.4 billion of $5.0 billion) from diagnoses 
reported only on chart reviews and HRAs were concentrated among 12 of the 
101 possible HCCs, as shown in Exhibit 4.38  
Exhibit 4: For 20 MA companies, 12 health conditions drove billions in risk-adjusted 
payments from chart reviews and HRAs. 
Source: OIG estimation of 2017 payment amounts using 2016 MA encounter data from CMSs IDR. 
One MA company stood out from its peers in its use of chart 
reviews and HRAs to drive risk-adjusted payments  
Among the top 20 MA companies, 1 MA company generated 40 percent ($3.7 billion 
of $9.2 billion) of all payments from diagnoses submitted solely on chart reviews and 
HRAs, yet it enrolled only 22 percent of all MA beneficiaries, as shown in Exhibit 5.  
Some MA Companies Leveraged Chart Reviews and Health Risk Assessments To Disproportionately Drive Payments 
OEI-03-17-00474  Findings | 10  The remaining top 19 companies accounted for a much smalleryet still 
disproportionateshare of payments.39  The other 142 companies that had payments 
from chart reviews and/or HRAs enrolled 69 percent of all MA beneficiaries and 
accounted for just 46 percent of these payments.   
Exhibit 5: One top MA company generated billions in payments and a 
disproportionately high share of payments from diagnoses submitted solely on 
chart reviews and HRAs.   
 
Source: OIG estimation of 2017 payment amounts using 2016 MA encounter data from CMSs IDR. 
The MA company with the largest share of payments particularly 
stood out in its use of HRAs 
This one top company stood out from its peers because of its disproportionally large 
share of the payments generated by (1) HRAs, (2) in-home HRAs, and (3) certain 
health conditions identified only during HRA visits.  It also stood out for its more 
intensive reporting of certain diagnoses on in-home HRAs. 
Although this one MA company drove payments from both chart reviews and 
HRAs, it had a disproportionately higher share of the payments from HRAs.  This 
company generated 58 percent ($1.5 billion of $2.6 billion) of all payments from 
HRAs, as shown in Exhibit 6.  The other top 19 companies accounted for only 
4 percent of payments from HRAs.  The remaining 142 companies generated 
38 percent of the payments from HRAs.   
Some MA Companies Leveraged Chart Reviews and Health Risk Assessments To Disproportionately Drive Payments 
OEI-03-17-00474  Findings | 11  Exhibit 6: The one top MA company had a greater share of the payments from 
diagnoses reported solely on HRAs, whereas the other companies had more of the 
payments from diagnoses reported solely on chart reviews. 
Source: OIG estimation of 2017 payment amounts using 2016 MA encounter data from CMSs IDR. 
 
 
 
This one company differed from its peers in the share of the HRA-driven payments 
for certain health conditions.  For six HCCs, this company had a substantially greater 
share of the payments driven by diagnoses reported solely on HRAs, as shown in 
Exhibit 7.   
Exhibit 7: One top MA company had a substantially greater share of the payments 
resulting from HRAs for certain health conditions, in comparison to its peers. 
 
Source: OIG estimation of 2017 payment amounts using 2016 MA encounter data from CMSs IDR. 
Some MA Companies Leveraged Chart Reviews and Health Risk Assessments To Disproportionately Drive Payments 
OEI-03-17-00474  Findings | 12  Overall, this 1 company had more than twice the amount of HRA-driven payments for 
these 6 HCCs as did the other 161 companies combined ($704.8 million versus 
$308.8 million).  Although this 1 company enrolled 22 percent of MA beneficiaries, it 
accounted for at least 60 percent of the beneficiaries identified as having each of 
these health conditions during HRAs.  This one companys substantially higher share 
of HRA-driven payments for these health conditionsand its correspondingly higher 
share of beneficiaries identified with these conditions only during HRAsraise 
concerns about the validity of the diagnoses submitted only on HRAs and about the 
lack of evidence of followup care for beneficiaries with these conditions. 
This one MA company drove risk-adjusted payments from in-home HRAs.  HRAs 
can be an important tool for early identification of health risks to improve 
beneficiaries care and health outcomes.  However, conducting in-home HRAs that 
drive risk-adjusted payment but do not result in needed followup care raises concerns 
about the role that these assessments are playing in providing high-quality 
coordinated care.  The one top company accounted for two-thirds ($1.38 billion of 
$2.05 billion) of all risk-adjusted payments resulting from diagnoses reported only on 
in-home HRAs and on no other service records.  In contrast, the other 19 companies 
with a disproportionate share of payments from chart reviews and HRAs accounted 
for just 1 percent of payments from in-home HRAs.  The remaining 142 companies 
accounted for 31 percent of payments from in-home HRAs. 
Almost all of the companys payments from HRAs resulted from diagnoses collected 
in beneficiaries homes.  Diagnoses reported only on in-home HRAs resulted in 
93 percent ($1.38 billion of $1.5 billion) of the companys payments from HRAs.  
Eighteen other companies also generated more than 90 percent of their HRA 
payments from in-home HRAs.  However, these 18 other companies were much 
smaller and their payments from in-home HRAs totaled just $41 million.  
This one MA company used certain diagnosis codes more than its peers to 
generate risk-adjusted payments from in-home HRAs.  For this one company, the 
top three diagnoses from in-home HRAs that generated risk-adjusted payments were 
peripheral vascular disease, unspecified, major depressive disorder, recurrent, mild, 
and type 2 diabetes mellitus with diabetic peripheral angiopathy without gangrene.  
This company reported these 3 diagnoses only on in-home HRAs and on no other 
service records for 125,632 beneficiaries.  In contrast, all other 161 companies 
combined reported these 3 diagnoses only on in-home HRAs for just 
21,618 beneficiaries.  The top 3 diagnoses that generated risk-adjusted payments 
resulting solely from in-home HRAs for the other 161 companies were morbid 
(severe) obesity due to excess calories, atherosclerotic heart disease of native 
coronary artery with unspecified angina pectoris, and heart failure, unspecified. 
In addition, the top MA company accounted for almost all of the beneficiaries with 
certain diagnoses.  For nine other diagnoses that generated payments from in-home 
HRAs, this one company had at least 90 percent of the beneficiaries who had these 
diagnoses reported only on an in-home HRA, as shown in Exhibit 8.  For example, the 
Some MA Companies Leveraged Chart Reviews and Health Risk Assessments To Disproportionately Drive Payments 
OEI-03-17-00474  Findings | 13  company reported a diagnosis of other forms of angina pectoris for 99 percent 
(6,719 of 6,795) of the beneficiaries with this diagnosis on an in-home HRA that 
generated payment.  All other 161 companies combined had payments generated by 
this diagnosis from in-home HRAs for just 76 beneficiaries.  It seems unusual that one 
company accounted for such a substantially higher share of the beneficiaries with 
these diagnoses. 
Exhibit 8: The one top MA company had almost all of the beneficiaries with certain 
diagnoses from in-home HRAs that generated payments. 
Diagnosis  Description of Diagnosis Code  Top Companys Percentage of 
Code  All Beneficiaries With the 
Diagnosis on an In-Home HRA 
That Generated Payment 
I208  Other forms of angina pectoris  99% 
F3342  Major depressive disorder, recurrent, in full  99% 
remission 
F3341  Major depressive disorder, recurrent, in  98% 
partial remission 
E1139  Type 2 diabetes mellitus with other diabetic  97% 
ophthalmic complication 
E1136  Type 2 diabetes mellitus with diabetic  96% 
cataract 
G63  Polyneuropathy in diseases classified  96% 
elsewhere 
E1169  Type 2 diabetes mellitus with other specified  95% 
complication 
F330  Major depressive disorder, recurrent, mild  90% 
E46  Unspecified protein-calorie malnutrition  90% 
  
Source: OIG analysis of 2016 MA encounter data from CMSs IDR. 
Some MA Companies Leveraged Chart Reviews and Health Risk Assessments To Disproportionately Drive Payments 
OEI-03-17-00474  Findings | 14   
CONCLUSION AND RECOMMENDATIONS 
 
The risk-adjustment program is an important payment mechanism for MA.  It levels 
the playing field for MA companies that enroll beneficiaries who need a costlier level 
of care, which helps to ensure these beneficiaries have continued access to MA plans.  
Chart reviews can be a tool to improve the accuracy of risk-adjusted payments, and 
HRAs can be used for early identification of health risks to improve beneficiaries care 
and health outcomes.  However, these mechanisms raise concerns if MA companies 
use them to add diagnoses and maximize risk-adjusted payments without any other 
encounter records indicating that they provided care for conditions reported by these 
mechanisms. 
Of the 162 MA companies with estimated risk-adjusted payments from diagnoses 
reported only on chart reviews and/or HRAs, 20 companies had a disproportionate 
share of the $9.2 billion in risk-adjusted payments from both mechanisms.  This 
disproportion could not be explained by their enrollment size.  Overall, these 
20 companies generated $5 billion in payments for beneficiaries who may not have 
received any other services for the medical conditions indicated by the diagnoses.  For 
half of these 20 companies, unlinked chart reviews and in-home HRAswhich may be 
particularly vulnerable to misuse by MA companiesaccounted for most of their 
estimated payments generated by chart reviews and HRAs.  Among these top 20 MA 
companies, 1 large company further stood out for its large share of risk-adjusted 
payments from chart reviews and HRAs.  This company enrolled 22 percent of MA 
beneficiaries, yet it generated 40 percent of all risk-adjusted payments from these 
mechanisms.  In addition, it accounted for half of all payments from HRAs.  Finally, 
almost all its payments from HRAs resulted from diagnoses reported only on in-home 
HRAs.   
These findings, along with prior OIG work, raise concerns that certain MA companies 
may be using both chart reviews and HRAs more than their peers to maximize 
risk-adjusted payments inappropriately.  These findings also reinforce the three types 
of potential concerns identified during prior work on chart reviews and HRAs: 
(1)a data integrity concern that MA companies are not submitting all service records
as required; (2) a quality-of-care concern that beneficiaries are not receiving needed
services to address diagnoses identified on these mechanisms; and (3) a payment
integrity concern that if diagnoses are inaccurate or unsupported, the associated
risk-adjusted payments would then be inappropriate.
MA companies should receive appropriate compensation for providing care to 
beneficiaries with serious and chronic health conditions.  However, mechanisms such 
as chart reviews and HRAs should not be misused to collect diagnoses that 
inappropriately increase payments to MA companies and do not result in improved 
care for MA beneficiaries. 
Some MA Companies Leveraged Chart Reviews and Health Risk Assessments To Disproportionately Drive Payments 
OEI-03-17-00474  Conclusion and Recommendations | 15  We recommend that CMS: 
Provide oversight of the 20 MA companies that had a 
disproportionate share of the risk-adjusted payments from chart 
reviews and HRAs 
CMS should perform oversight of the 20 MA companies that each had a share of 
payments from chart reviews and HRAs that was more than 25 percent higher than its 
share of enrolled MA beneficiaries.  When OIG issues this report, we will provide CMS 
with a list of the 20 MA companies, including the estimated risk-adjusted payments 
from chart reviews and HRAs.  CMS should assess the following: 
 whether there are quality-of-care issues regarding the beneficiaries for whom
there were diagnoses reported only on chart reviews or HRAs (i.e., whether the
lack of additional MA service records for some of the serious conditions being
represented by these diagnoses raises concerns about the adequacy of care
provided to these beneficiaries);
 whether MA companies are submitting records of all services for beneficiaries
with diagnoses reported only on chart reviews or HRAs; and
 whether the diagnoses reported solely on chart reviews or HRAs submitted by
these 20 MA companies are accurate.
CMS may need to work across different Centers (e.g., the Center for Clinical Standards 
and Quality and the Center for Program Integrity) to conduct these assessments.  
Take additional actions to determine the appropriateness of 
payments and care for the one MA company that substantially 
drove risk-adjusted payments from chart reviews and HRAs   
CMS should perform additional oversight of the MA company that had a high and 
disproportionate share of the payments from both chart reviews and HRAs for 
beneficiaries who may not have received any other services for the diagnoses 
reported only on these mechanisms.  OIG identified six health conditions that 
accounted for a substantial portion of the companys payments from HRAs.  We also 
identified nine diagnoses from in-home HRAs that generated payments and were 
reported for many more of the companys beneficiaries than for those of its peers.  
CMS should work across its different Centers to examine the appropriateness of 
payments and care specifically for these conditions and diagnoses.  In addition, CMS 
should assess the companys requirements for care coordination after in-home HRAs 
and determine whether the company effectively implements these requirements.  
Some MA Companies Leveraged Chart Reviews and Health Risk Assessments To Disproportionately Drive Payments 
OEI-03-17-00474  Conclusion and Recommendations | 16  CMS should take action(s) to remedy any problems identified and improve the 
integrity of this companys chart review and/or HRA programs.  Specifically, if the 
company does not ensure that beneficiaries receive appropriate care for diagnoses 
reported on these mechanisms, CMS should require the company to implement 
practices that ensure care coordination for beneficiaries.  In addition, if the company 
submitted a chart review or HRA to CMS with unsupported diagnoses, CMS should 
recover risk-adjusted overpayments as appropriate.     
Perform periodic monitoring to identify MA companies that had 
a disproportionate share of risk-adjusted payments from chart 
reviews and HRAs 
CMS should conduct periodic reviews to identify MA companies that generate shares 
of payments from chart reviews and HRAs that are disproportionately higher than 
their respective shares of enrolled MA beneficiaries.  These periodic reviews should 
determine whether the 20 MA companies, or other MA companies, generate a 
disproportionately higher share of the payments from these mechanisms in a given 
payment year.  CMS should use this information to provide targeted oversight of 
companies that consistently generate a share of payments that cannot be explained 
by their enrollment size.  These reviews should include (1) assessing whether these 
companies are providing quality care for their beneficiaries, and/or (2) determining 
the accuracy of diagnoses reported only on chart reviews or HRAs submitted by these 
companies.  
Some MA Companies Leveraged Chart Reviews and Health Risk Assessments To Disproportionately Drive Payments 
OEI-03-17-00474  Conclusion and Recommendations | 17   
AGENCY COMMENTS AND OIG RESPONSE 
 
In response to our draft report, CMS stated that it is committed to ensuring that 
diagnoses that MA companies submit for risk adjustment are accurate.  However, 
CMS neither concurred nor nonconcurred with our three recommendations.  Instead, 
CMS stated that it will take our recommendations under consideration as part of its 
ongoing process to determine policy options for future years.  CMS acknowledged 
concerns that in-home HRAs could be used by some MA companies primarily for the 
gathering of diagnoses for payment rather than to provide treatment and/or followup 
care to beneficiaries.  CMS noted that it has issued guidance in recent years to ensure 
MA companies are using HRAs and chart reviews appropriately.  CMS stated that it 
also uses Risk Adjustment Data Validation (RADV) audits to verify the accuracy of 
diagnoses reported by MA companies for risk adjustment and to recoup 
overpayments.   
OIG recognizes the actions that CMS has taken to provide oversight of MA 
companies use of HRAs and chart reviews.  However, some companies 
disproportionate use of these mechanisms to maximize risk-adjusted payments raises 
concerns and highlights the need for more targeted oversight.  We continue to 
recommend that CMS: 
 provide oversight of the 20 MA companies that had a disproportionate share of
the risk-adjusted payments from chart reviews and HRAs;
 take additional actions to determine the appropriateness of payments and care
for the one MA company that substantially drove risk-adjusted payments from
chart reviews and HRAs; and
 perform periodic monitoring to identify MA companies that had a
disproportionate share of risk-adjusted payments from chart reviews and HRAs.
OIG requests that CMS include in its Final Management Decision details on any plans 
or progress it has made toward implementing our recommendations. 
The full text of CMSs comments can be found in Appendix A. 
Some MA Companies Leveraged Chart Reviews and Health Risk Assessments To Disproportionately Drive Payments 
OEI-03-17-00474  Agency Comments and OIG Response | 18  Appendix A:  Agency Comments
DATE:  August 20, 2021 
TO:  Christi Grimm 
Principal Deputy Inspector General 
Office of Inspector General  
FROM:  Chiquita Brooks-LaSure 
Administrator 
Centers for Medicare & Medicaid Services 
SUBJECT:  Office of Inspector General (OIG) Draft Report: Some Medicare Advantage 
Companies Leveraged Chart Reviews and Health Risk Assessments to 
Disproportionately Drive Payments (OEI-03-17-00474) 
The Centers for Medicare & Medicaid Services (CMS) appreciates the opportunity to review and 
comment on the OIGs draft report regarding the role of chart reviews and Health Risk 
Assessments (HRAs) in identifying diagnoses that Medicare Advantage Organizations (MAOs) 
submit to CMS for risk adjusted payments. 
CMS pays each MAO a monthly per-person amount for each beneficiary enrolled in its plan. The 
per-person amount is adjusted for the risk of the beneficiary, which takes into account 
differences in health status between enrolled beneficiaries. Plans that disproportionately enroll 
healthy beneficiaries are paid less than they would be if they enrolled beneficiaries with the 
average risk profile, while plans that disproportionately enrolled the sickest patients are paid 
more than if they enrolled beneficiaries with the average risk profile.  
Beneficiary risk scores are calculated with diagnoses that MAOs report to CMS. Diagnosis codes 
used for risk adjustment must meet specific criteria, including that the diagnosis is documented 
in the medical record. Historically, MAOs have reported diagnosis codes to CMS in two ways: 
(1) to a legacy system called the Risk Adjustment Payment System (RAPS) using an abbreviated 
data set, including diagnosis codes; and (2) to the Encounter Data System, where MAOs submit 
a larger set of information on each service provided, including diagnosis codes. CMS allows 
MAOs to use HRAs and chart reviews, both described in more detail below, as a source of 
diagnoses for Medicare Advantage (MA) beneficiaries used in the calculation of risk-adjusted 
payments. It is also important to note that risk adjustment requirements do not require that a 
service be provided for every diagnosis. For example, MAOs may report diagnoses for which 
there might not be a service directly linked to a condition status, but could be for associated 
comorbidities (e.g., morbid obesity).
HRAs are a tool for early identification of health risks to improve beneficiaries health outcomes 
through care coordination. Physicians or other health care professionals conduct HRAs to collect 
information from beneficiaries about their health status, health risks, and daily activities. In the 
MA program, HRAs are either a part of annual wellness visits or conducted during other visits in 
Some MA Companies Leveraged Chart Reviews and Health Risk Assessments To Disproportionately Drive Payments 
OEI-03-17-00474                                 Agency Comments | 19 Appendix A:  Agency Comments
non-clinical settings. MAOs may submit diagnoses documented in HRAs for risk adjustment. All 
diagnoses submitted for risk adjustment are subject to Risk Adjustment Data Validation (RADV) 
audits to ensure they meet program rules. MAOs review conditions listed on HRAs to evaluate 
for chronicity and support in the full medical record, such as history, medications, and final 
assessment. Results of HRA screening portions are not considered confirmed diagnoses by 
MAOs unless supported by the final assessment documentation.1 In addition, CMS has created 
an indicator in RAPS data that requires MAOs to identify diagnoses that result from a non-
clinical setting visit during which an annual wellness visit was completed. 
CMS has issued guidance in recent years to ensure MAOs are utilizing HRAs appropriately. In 
2015, CMS provided guidance to MAOs on best practices that promote the primary use of in-
home HRAs as tools for improving care for MA enrollees.2 These practices included making 
referrals to appropriate community resources, verifying that needed follow-up care is provided, 
and verifying that information obtained during the assessment was provided to the appropriate 
providers. CMS released additional guidance in 2016 related to coordination of care for services 
provided to MA beneficiaries.3 This guidance states that MAOs must ensure continuity of 
services, including implementing procedures to make a best effort to conduct HRAs annually and 
to ensure an appropriate and timely exchange of clinical information among providers. This will 
help ensure that diagnoses collected from HRAs are substantiated through appropriate follow up 
care.   
Chart review records are a type of Medicare Advantage encounter data. They allow MAOs to 
submit diagnosis codes for risk adjustment that were not reported on the record that was 
submitted to report the encounter. That typically occurs because the data used to report the 
encounter was taken from a claim that a provider submitted to the MAO. Such a claim would not 
necessarily include all the diagnoses documented in the medical record during the respective 
encounter. While MAOs are required to submit all encounters to CMS, chart review records are 
intended for the submission of additional diagnosis codes submitted for risk adjustment. Based 
on their reviews of medical records, MAOs may also use chart review records to delete 
previously submitted diagnosis codes that are not supported by those medical records.   
CMS has also issued guidance in recent years to ensure MAOs are utilizing chart reviews 
appropriately. In January 2020, CMS released a Frequently Asked Questions document to MAOs 
that included information on adding or deleting diagnoses codes through chart reviews, the use 
of default procedure codes for unlinked chart reviews, and how MAOs can avoid duplicate errors 
when submitting diagnoses.4 
1 Contract-level Risk Adjustment Data Validation: Medical Record Reviewer Guidance 
https://www.cms.gov/Research-Statistics-Data-and-Systems/Monitoring-Programs/Medicare-Risk-Adjustment-
Data-Validation-Program/Other-Content-Types/RADV-Docs/Medical-Record-Reviewer-Guidance.pdf 
2 Announcement of Calendar Year (CY) 2016 Medicare Advantage Capitation Rates and Medicare Advantage and 
PartDPayment PoliciesandFinalCallLetter 
https://www.cms.gov/Medicare/Health-Plans/MedicareAdvtgSpecRateStats/Downloads/Announcement2016.pdf 
3 Medicare Managed Care Manual 
https://www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/Downloads/mc86c04.pdf 
4 FAQs about MAOs Encounter Data Submission and Processing 
https://www.hhs.gov/guidance/sites/default/files/hhs-guidance-documents/2012232368-lw-
faqsmaosencounterdatasubmissionandprocessing.pdf 
Some MA Companies Leveraged Chart Reviews and Health Risk Assessments To Disproportionately Drive Payments 
OEI-03-17-00474                                  Agency Comments | 20 Appendix A:  Agency Comments
CMS is committed to ensuring that diagnoses that MAOs submit for risk adjustment are 
accurate, and we have already taken action to target plans at higher risk for improper payment. 
For example, CMS uses contract-level RADV audits to validate that diagnoses used for risk 
adjustment meet program rules. RADV audits measure the accuracy of the plan-submitted 
diagnostic information through medical record and coding reviews, and uses the results of these 
audits to identify and recover overpayments for individual MA plans. CMS audits approximately 
200 plans per payment year, using advanced statistical modeling and known areas of improper 
payment to focus audits on higher risk areas when drawing enrollee samples. To assess potential 
risk of overpayments, CMS takes into consideration various factors, including results of past 
RADV audits. Because the plan selection methodology for RADV audits already focuses on 
high-risk plans, our current methodology would already capture plans at high risk for improper 
payment.  
OIG Recommendation  
Provide oversight of the 20 MA companies that had a disproportionate share of the risk-adjusted 
payments from chart reviews and HRAs. 
CMS Response 
While CMS continues to support the use of enrollee risk assessments for wellness, care 
coordination, and disease prevention, we recognize that concerns remain that home visits could 
be used by some MA organizations primarily for the gathering of diagnoses for payment rather 
than to provide treatment and/or follow-up care to beneficiaries. CMS is consistently monitoring 
the operations of the program to determine appropriate policy options for consideration in future 
years, but presently, HRAs and chart reviews are allowable sources of diagnoses for risk adjusted 
payments in the MA program. RADV audits are CMSs primary corrective action to recoup 
overpayments. RADV uses medical record review to verify the accuracy of enrollee diagnoses 
submitted by MA organizations for risk adjusted payment. CMS RADV audits are designed to 
develop audit and sampling methodologies that target a combination of plans, enrollees, and 
diagnoses that are most at risk for improper payments. Because of this, MA companies that are at 
higher risk for overpayments already have an increased likelihood of being included in RADV 
audits. However, CMS will take OIGs recommendation under consideration as part of our 
ongoing process to determine policy options for future years. 
OIG Recommendation 
Take additional actions to determine the appropriateness of payments and care for the one MA 
company that substantially drove risk-adjusted payments from chart reviews and HRAs.  
CMS Response 
While CMS continues to support the use of enrollee risk assessments for wellness, care 
coordination, and disease prevention, we recognize that concerns remain that home visits could 
be used by some MA organizations primarily for the gathering of diagnoses for payment rather 
than to provide treatment and/or follow-up care to beneficiaries. CMS is consistently monitoring 
the operations of the program to determine appropriate policy options for consideration in future 
years, but presently, HRAs and chart reviews are allowable sources of diagnoses for risk adjusted 
payments in the MA program. CMS RADV audits are designed to develop audit and sampling 
methodologies that target a combination of plans, enrollees, and diagnoses that are most at risk 
Some MA Companies Leveraged Chart Reviews and Health Risk Assessments To Disproportionately Drive Payments 
OEI-03-17-00474                                 Agency Comments | 21 Appendix A:  Agency Comments
for improper payments. Because of this, MA companies that are at higher risk for overpayments 
already have an increased likelihood of being included in RADV audits. However, CMS will 
take OIGs recommendation under consideration as part of our ongoing process to determine 
policy options for future years. 
OIG Recommendation 
Perform periodic monitoring to identify MA companies that had a disproportionate share of risk-
adjusted payments from chart reviews and HRAs. 
CMS Response 
While CMS continues to support the use of enrollee risk assessments for wellness, care 
coordination, and disease prevention, we recognize that concerns remain that home visits could 
be used by some MA organizations primarily for the gathering of diagnoses for payment rather 
than to provide treatment and/or follow-up care to beneficiaries. CMS is consistently monitoring 
the operations of the program to determine appropriate policy options for consideration in future 
years, but presently, HRAs and chart reviews are allowable sources of diagnoses for risk adjusted 
payments in the MA program. RADV audits are CMSs primary corrective action to recoup 
overpayments. CMS RADV audits are designed to develop audit and sampling methodologies 
that target a combination of plans, enrollees, and diagnoses that are most at risk for improper 
payments. Because of this, MA companies that are at higher risk for overpayments already have 
an increased likelihood of being included in RADV audits. However, CMS will take OIGs 
recommendation under consideration as part of our ongoing process to determine policy options 
for future years. 
Some MA Companies Leveraged Chart Reviews and Health Risk Assessments To Disproportionately Drive Payments 
OEI-03-17-00474                                 Agency Comments | 22  
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 San Le.  Office of 
Evaluation and Inspections staff who provided support include Joe Chiarenzelli, 
Kevin Farber, and Christine Moritz.  
This report was prepared under the direction of Linda Ragone, Regional Inspector 
General for Evaluation and Inspections in the Philadelphia regional office, and 
Joanna Bisgaier, Deputy Regional Inspector General. 
Contact 
To obtain additional information concerning this report, contact the Office of Public 
Affairs at Public.Affairs@oig.hhs.gov.  OIG reports and other information can be found 
on the OIG website at oig.hhs.gov. 
Office of Inspector General 
U.S. Department of Health and Human Services 
330 Independence Avenue, SW 
Washington, DC 20201 
Some MA Companies Leveraged Chart Reviews and Health Risk Assessments To Disproportionately Drive Payments 
OEI-03-17-00474  Acknowledgments and Contact | 23   
ABOUT THE OFFICE OF INSPECTOR GENERAL 
 
The mission of the Office of Inspector General (OIG), as mandated by Public Law 95-
452, as amended, is to protect the integrity of the Department of Health and Human 
Services (HHS) programs, as well as the health and welfare of beneficiaries served by 
those programs.  This statutory mission is carried out through a nationwide network 
of audits, investigations, and inspections conducted by the following operating 
components: 
The Office of Audit Services (OAS) provides auditing services for HHS,
either by conducting audits with its own audit resources or by overseeing audit work 
done by others.  Audits examine the performance of HHS programs and/or its 
grantees and contractors in carrying out their respective responsibilities and are 
intended to provide independent assessments of HHS programs and operations.  
These audits help reduce waste, abuse, and mismanagement and promote economy 
and efficiency throughout HHS. 
The Office of Evaluation and Inspections (OEI) conducts national
evaluations to provide HHS, Congress, and the public with timely, useful, and reliable 
information on significant issues.  These evaluations focus on preventing fraud, waste, 
or abuse and promoting economy, efficiency, and effectiveness of departmental 
programs.  To promote impact, OEI reports also present practical recommendations 
for improving program operations. 
The Office of Investigations (OI) conducts criminal, civil, and administrative
investigations of fraud and misconduct related to HHS programs, operations, and 
beneficiaries.  With investigators working in all 50 States and the District of Columbia, 
OI utilizes its resources by actively coordinating with the Department of Justice and 
other Federal, State, and local law enforcement authorities.  The investigative efforts 
of OI often lead to criminal convictions, administrative sanctions, and/or civil 
monetary penalties. 
The Office of Counsel to the Inspector General (OCIG) provides
general legal services to OIG, rendering advice and opinions on HHS programs and 
operations and providing all legal support for OIGs internal operations.  OCIG 
represents OIG in all civil and administrative fraud and abuse cases involving HHS 
programs, including False Claims Act, program exclusion, and civil monetary penalty 
cases.  In connection with these cases, OCIG also negotiates and monitors corporate 
integrity agreements.  OCIG renders advisory opinions, issues compliance program 
guidance, publishes fraud alerts, and provides other guidance to the health care 
industry concerning the anti-kickback statute and other OIG enforcement authorities.
Some MA Companies Leveraged Chart Reviews and Health Risk Assessments To Disproportionately Drive Payments 
OEI-03-17-00474  About OIG | 24   
 
EENNDDNNOOTTEESS  
 
 
 
1 MAOs may also offer prescription drug coverage under Medicare Part D. 
2  An MA company can also be referred to as a parent organization or parent company.  We use the term MA companies to 
encompass MAOs. 
3 OIG, Billions in Estimated Medicare Advantage Payments From Chart Reviews Raise Concerns, OEI-03-17-00470, 
December 2019; OIG, Billions in Estimated Medicare Advantage Payments From Diagnoses Reported Only on Health Risk 
Assessments Raise Concerns, OEI-03-17-00471, September 2020. 
4 CMS, CMS Financial Report Fiscal Year 2020, November 2020, p. 53.  Accessed at https://www.cms.gov/files/document/cms-
financial-report-fiscal-year-2020.pdf on January 5, 2021. 
5 Although MAOs may receive service information from providers, submit diagnoses for risk adjustment, and receive payments 
from CMS, this report uses the term MA companies (i.e., companies that own or have a controlling interest in one or more 
MAOs) to encompass MAOs.  
6 CMS, Encounter Data Submission and Processing Guide, Medicare Advantage Program, October 2020.  Accessed at 
https://www.csscoperations.com/internet/csscw3_files.nsf/F/CSSCED_Submission_Processing_Guide_20201009.pdf/$FILE/ED_Su
bmission_Processing_Guide_20201009.pdf on June 17, 2021.  CMS, Medicare Managed Care Manual, Risk Adjustment, Pub. No. 
100-16 (Rev. 118, September 19, 2014), ch. 7.  Accessed at https://www.cms.gov/Regulations-and-Guidance/Guidance/ 
Manuals/Downloads/mc86c07.pdf on May 4, 2021.  CMS, Final Encounter Data Diagnosis Filtering Logic, December 2015.  
Accessed at https://www.hhs.gov/guidance/sites/default/files/hhs-guidance-documents/final%20industry 
%20memo%20medicare%20filtering%20logic%2012%2022%2015_2.pdf on December 27, 2018.  
7 The RAPS data include only select information for services provided by a limited set of provider types.  CMS began collecting 
the more comprehensive encounter data from MA companies in 2012 as part of an effort to improve MA payment accuracy 
and better perform MA quality reviews. 
8 To be eligible for risk adjustment, a diagnosis must be (1) documented in a medical record from a hospital inpatient stay, 
hospital outpatient visit, or visit with a physician or other eligible health care professional during the prior year, 
(2) documented as a result of a face-to-face visit between the beneficiary and the provider, and (3) submitted on an encounter 
record by the final risk adjustment data submission deadline.  To identify which diagnoses meet these eligibility criteria, CMS 
extractsor filtersdiagnoses in the encounter data on the basis of whether the service record contains an acceptable 
procedure code (i.e., Current Procedural Terminology (CPT) or Healthcare Common Procedure Coding System (HCPCS) code) 
and/or type of bill code. 
9 Specifically, the relative factors represent the marginal expected cost of an HCC relative to the average expected cost in the 
Medicare fee-for-service program. 
10 CMS adjusts risk scores by normalization factors and coding adjustment factors prior to calculating payments.  An MA plans 
base payment rate is the plans standardized bid adjusted by the county Intra-Service Area Rate factor for the beneficiarys 
county of residence. 
11 MA companies may also perform chart reviews to delete diagnoses that providers submitted in error, but prior OIG work 
found that the use of chart reviews for this purpose was rare.  OIG, Billions in Estimated Medicare Advantage Payments From 
Chart Reviews Raise Concerns, OEI-03-17-00470, December 2019. 
12 On a linked chart review, MA companies identify the previously accepted service record by reporting that service records 
unique internal control number. 
 
 
Some MA Companies Leveraged Chart Reviews and Health Risk Assessments To Disproportionately Drive Payments 
OEI-03-17-00474  Endnotes | 25 
   
 
 
13 CMS permits MA companies to submit unlinked chart reviews because of CMSs concerns regarding the burden on some MA 
companies of linking chart reviews. 
14 In August 2018, CMS issued a clarification to MA companies that diagnoses that are disallowed for risk adjustment should 
not be submitted with default [procedure] codes that would cause the diagnoses to be allowed for risk-adjusted payment.  
CMS, Additional Guidance for Chart Review Record (CRR) Submissions, August 2018.  Accessed at https://www.hhs.gov/guidance 
/sites/default/files/hhs-guidance-documents/hpms%2520memo%2520chart_review_final_08-28-2018_4.pdf on February 19, 
2021. 
15 To be eligible for risk adjustment, a diagnosis must be documented as a result of a face-to-face visit between the beneficiary 
and the provider.  To identify which diagnoses meet eligibility criteria, CMS extractsor filtersdiagnoses in the encounter 
data on the basis of whether the service record contains an acceptable procedure code (i.e., Current Procedural Terminology 
(CPT) or Healthcare Common Procedure Coding System (HCPCS) code) and/or type of bill code. 
16 OIG, Billions in Estimated Medicare Advantage Payments From Chart Reviews Raise Concerns, OEI-03-17-00470, 
December 2019. 
17 CMS, Medicare Advantage Encounter DataData Exchange ReportsJune 2020, June 2020.  Accessed at 
https://www.hhs.gov/guidance/sites/default/files/hhs-guidance-documents/ma%20encounter%20data_data%20exchange 
_6.25.2020_8.pdf on February 22, 2021.  
18 DOJ, U.S. Intervenes in Second Whistleblower Lawsuit Alleging UnitedHealth Mischarged the Medicare Advantage and 
Prescription Drug Programs, May 2017.  Accessed at https://www.justice.gov/usao-cdca/pr/us-intervenes-second-
whistleblower-lawsuit-alleging-unitedhealth-mischarged-medicare on April 14, 2021; United States ex rel. Poehling v. 
UnitedHealth Group, Inc. et al., No. CV 16-8697-MWF (SSX), (C.D. Cal. filed May 16, 2017). 
19 DOJ, Manhattan U.S. Attorney Files Civil Fraud Suit Against Anthem, Inc., For Falsely Certifying The Accuracy Of Its Diagnosis 
Data, March 2020.  Accessed at https://www.justice.gov/usao-sdny/pr/manhattan-us-attorney-files-civil-fraud-suit-against-
anthem-inc-falsely-certifying on October 16, 2020.  United States v. Anthem, Inc., No. 20-cv-2593 (U.S. District Court for the 
Southern District of New York, filed March 26, 2020). 
20 GAO, Fundamental Improvements Needed in CMSs Effort to Recover Substantial Amounts of Improper Payments, GAO-16-76, 
April 2016, p.13.  Accessed at https://www.gao.gov/assets/680/676441.pdf on August 12, 2020. 
21 An annual wellness visit should incorporate reviews of a beneficiarys health risks, medical history, and current providers, 
along with routine measurements and personalized health advice.  CMS, Medicare Wellness Visits, October 2020.  Accessed at 
https://www.cms.gov/Outreach-and-Education/Medicare-Learning-Network-MLN/MLNProducts/preventive-services/medicare-
wellness-visits.html on April 15, 2021. 
22 MA companies must make a best-effort attempt to conduct an initial and annual HRA to assess each enrollees health care 
needs.  42 CFR  422.112(b)(4)(i); CMS, Medicare Managed Care Manual, Benefits and Beneficiary Protections, Pub. No. 100-16 
(Rev. 121, April 22, 2016), ch. 4,  110.  Accessed at https://www.cms.gov/Regulations-and-Guidance/Guidance/ 
Manuals/Downloads/mc86c04.pdf on June 16, 2021.  MA companies offering Special Needs Plans (SNPs) must conduct initial 
and annual HRAs of individuals physical, psychosocial, and functional needs, using a comprehensive risk assessment tool that 
CMS may review during oversight activities.  Social Security Act,  1859(f)(5)(A)(ii)(I); 42 CFR  422.101(f)(1)(i).   
23 OIG, Billions in Estimated Medicare Advantage Payments From Diagnoses Reported Only on Health Risk Assessments Raise 
Concerns, OEI-03-17-00471, September 2020. 
24 We identified diagnoses reported on HRAs using a twofold process.  First, we aggregated records from CMSs Integrated 
Data Repository (IDR) that identify potential HRAs, including annual wellness visits; initial preventive physical exams; and 
 
 
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evaluation and management home visits.  Second, among these types of records, we excluded from our analysis any 
beneficiaries who had more than one procedure code in 2016 that met our criteria for a potential HRA. 
25 CMS, Announcement of Calendar Year (CY) 2016 Medicare Advantage Capitation Rates and Medicare Advantage and Part D 
Payment Policies and Final Call Letter, April 2015.  Accessed at https://www.cms.gov/Medicare/Health-
Plans/MedicareAdvtgSpecRateStats/Downloads/Announcement2016.pdf on August 12, 2020. 
26 CMS, Announcement of Calendar Year (CY) 2016 Medicare Advantage Capitation Rates and Medicare Advantage and Part D 
Payment Policies and Final Call Letter, April 2015.  Accessed at https://www.cms.gov/Medicare/Health-
Plans/MedicareAdvtgSpecRateStats/Downloads/Announcement2016.pdf on August 12, 2020. 
27 As part of this recommendation, MedPAC recommended that the Secretary develop a risk adjustment model that uses 
2 years of Medicare fee-for-service and MA diagnostic data.  MedPAC, Report to the Congress: Medicare Payment Policy, March 
2016, p. 352.  Accessed at http://www.medpac.gov/docs/default-source/reports/march-2016-report-to-the-congress-
medicare-payment-policy.pdf on August 12, 2020. 
28 For encounter records with dates of service in 2016, we identified chart reviews as records with (1) a claim type code 
between 4000 and 4800; (2) a chart review switch value of Y; and (3) a chart review effective switch of Y. 
29 We identified HRAs in the 2016 MA encounter data using a twofold process.  First, we aggregated records from the 
Integrated Data Repository (IDR) containing a procedure code that identifies a potential HRA, including a procedure code for 
an annual wellness visit (G0438 or G0439), an initial preventive physical exam (G0402), or an evaluation and management 
home visit (9934199345 or 9934799350).  For evaluation and management home visits, we also ensured that the place of 
service was at homei.e., that the code for the place of service was home (12), temporary lodging (16), custodial care facility 
(33), group home (14), or homeless shelter (04).  Second, among these types of records, we excluded from our analysis any 
beneficiaries who had more than one procedure code in 2016 that met our criteria for a potential HRA. 
30 We excluded beneficiaries whoaccording to information contained in the IDRs MA prescription drug (MARx) datahad 
end stage renal disease, were receiving hospice care, or did not reside in a U.S. State.  To ensure data accuracy, we also 
excluded beneficiaries with inconsistencies between their MA encounter data, Medicare beneficiary data, and MARx data 
contained in the Integrated Data Repository.  In addition, we included only beneficiaries who were enrolled with the same MA 
plan for all 12 months of 2016.  
31 We used the 2017 CMS-HCC model and CMSs CMS-HCC mapping software to identify the HCCs generated by the 
diagnoses that were reported only on chart reviews or HRAs.  CMS, Announcement of Calendar Year (CY) 2017 Medicare 
Advantage Capitation Rates and Medicare Advantage and Part D Payment Policies and Final Call Letter, Table VI-1. 2017 
CMS-HCC Model Relative Factors for Community and Institutional Beneficiaries, April 2016, pp. 78-84.  Accessed at 
https://www.cms.gov/Medicare/Health-Plans/MedicareAdvtgSpecRateStats/Downloads/Announcement2017.pdf on 
December 19, 2018.  CMS, 2017 Model Software/ICD-10 Mappings, V2217.79.O1.  Accessed at 
https://www.cms.gov/Medicare/Health-Plans/MedicareAdvtgSpecRateStats/Risk-Adjustors.html on May 9, 2018. 
32 Prior to calculating payment estimates, we adjusted each HCCs relative factor by CMSs normalization factors and coding 
adjustment factors for 2017. 
33 For MA plans that submit bids to CMS, we identified base payment rates for December 2017 in the Approved Bid Pricing 
Tool Extract from CMSs Health Plan Management System.  For Employer Group Waiver Plans (EGWPs), which do not submit 
bids to CMS, we identified base payment rates using CMSs EGWP county-level ratebooks for regional and local EGWPs and 
information on each EGWPs star rating.  We identified EGWPs 2017 star ratings by using the Approved Bid Pricing Tool Extract 
and the MA Quality Bonus Payment Rating files from CMSs Health Plan Management System.  The 2017 MA plan information 
that we used in our analysis included information from the Approved Bid Pricing Tool Extract and the Plan Benefit Package 
Extract in CMSs Health Plan Management System, as well as CMSs EGWP county-level ratebooks.  CMS, 2017 Medicare 
 
 
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OEI-03-17-00474  Endnotes | 27 
   
 
 
Advantage Ratebook and Prescription Drug Rate Information, 2017.  Accessed at https://www.cms.gov/Medicare/Health-
Plans/MedicareAdvtgSpecRateStats/Ratebooks-and-Supporting-Data.html on January 5, 2018. 
34 We identified linked chart reviews as chart reviews that contained an original control number and had a four-part effective 
key that matched the four-part effective key of an accepted service record with a date of service in 2016.  We considered all 
other chart reviews to be unlinked. 
35 We identified in-home HRAs as records containing a place of service code of home (12), temporary lodging (16), 
custodial care facility (33), group home (14), or homeless shelter (04).  We considered records containing all other place of 
service codesincluding codes for physician offices, clinics, and hospitalsto be facility-based HRAs. 
36 These evaluations included only beneficiaries enrolled in the same MA plan for all 12 months of 2016.  We excluded 
beneficiaries who had end-stage renal disease, were receiving hospice care, or did not reside in a U.S. State.  We also excluded 
cost plans, demonstration plans, programs of all-inclusive care for the elderly (PACE) organizations, and Medicare medical 
savings account plans.  
37 For 2017, CMS calculated a blended risk score for each beneficiary by combining 25 percent of the risk score calculated from 
diagnoses in the encounter data and 75 percent of the risk score calculated from diagnoses in the RAPS data.  Ultimately, CMS 
plans to rely exclusively on encounter data to calculate risk scores.  
38 Prior OIG reports provide the amount of risk-adjusted payments for all 101 HCCs that resulted from diagnoses reported only 
on each of these mechanisms.  OIG, Billions in Estimated Medicare Advantage Payments From Chart Reviews Raise Concerns, 
OEI-03-17-00470, December 2019, Appendix B, pp. 2933; OIG, Billions in Estimated Medicare Advantage Payments From 
Diagnoses Reported Only on Health Risk Assessments Raise Concerns, OEI-03-17-00471, September 2020, Appendix B, 
pp. 33-36. 
39 Only 4 of these 19 companies had a more disproportionate share of payments than the large company.  However, those 
4 companies were small, each enrolling less than 1 percent of all MA beneficiaries.  
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