OIG audit points to $7M in overpayments by CVS Medicare Advantage plan

The Office of Inspector General (OIG) has accused a CVS Health/Aetna Medicare Advantage plan of potential fraud via upcoding, resulting in an estimated $7 million in overpayments for patient care in 2018 and 2019.

An audit of Coventry Health and Life Insurance Company found that instances of upcoding medical bills—where a payer submits bills for patient diagnoses and treatments that aren’t justified by a patient’s actual need—were very common, with the OIG saying the majority of submitted claims contained dubious charges.

The agency is asking Coventry to refund the $7 million in estimated overpayments and also to conduct an internal audit to find more instances of overpayment, which will also need to be sent back to the federal government.

Despite the claims in the report, the OIG stopped short of accusing the insurer of willful wrongdoing. Instead, it's blaming incidents of upcoding on a lack of internal compliance checks.

“As demonstrated by the errors found in our sample, Coventry’s policies and procedures to prevent, detect, and correct noncompliance with CMS’s program requirements, as mandated by Federal regulations, could be improved,” the agency wrote. “On the basis of our sample results, we estimated that Coventry received at least $6,995,522 in net overpayments for 2018 and 2019.”

For the audit, 300 patient medical claims were reviewed along with clinical documentation. Of them, the OIG said 249 were not in compliance with billing standards for Medicare Advantage, resulting in the Centers for Medicare & Medicaid Services (CMS) overpaying Coventry by $752,587—which represents a portion of the total amount paid.

When extrapolated from the $3.5 billion Coventry was paid by CMS between 2018 and 2019, OIG estimates overpayment is in the ballpark of $7 million. However, the audit of claims was only for patients with high-risk medical diagnoses, such as cancer and myocarditis. The OIG said 4,026 Coventry patients fit into that category, and from there the agency chose 300 to analyze in a random sample.

“Our audit included enrollees on whose behalf providers documented diagnosis codes that mapped to 1 of the 10 high-risk groups during the 2017 and 2018 service years, for which Coventry received increased risk-adjusted payments for payment years 2018 and 2019, respectively,” the auditors wrote. “Because enrollees could be classified into more than one high-risk group or could have high-risk diagnosis codes documented in more than 1 year, we classified these individuals according to the condition and the payment year, which we refer to as ‘enrollee-years.’”

The OIG said it used data mining techniques to identify the initial high-risk claims, using a 10-point ranking system.

The audits are part of a larger push from CMS leadership to address a backlog of audits on Medicare Advantage insurers and their submitted claims, which the government said dates back to 2018.