Updated on: July 21, 2016

HCCs: Higher Scores, Higher Capitation Snags Florida Doctor

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Original story posted on: July 20, 2016

Some loyal RACmonitor readers may recall that way back in November of 2014, I wrote a RACmonitor article entitled It’s All About the Money – When is a Doctor Not a Doctor?, about Medicare Advantage (MA) plans contracting with firms to send physicians and non-physician practitioners out to the homes of their enrollees to take a history and perform a physical examination in order to get documentation of medical conditions. In the article, I question the accuracy of these diagnoses when the provider is visiting the patient without the benefit of the medical records from the patient’s primary care physician or access to their lab results, and examining them on their living room couch.

Despite these shortcomings, these diagnoses are then used to increase the patient’s hierarchal condition category (HCC) coding which requires documentation in the medical record of a condition in order for it to be counted. The HCC coding system is a method that classifies individuals with serious or chronic illness and assigns a risk factor score to the person based upon a combination of the individual’s health conditions and demographic details, with a higher score representing a patient with higher predicted health care costs.

Because it costs more to care for patients with higher HCC scores, Medicare pays the MA plan a substantially higher monthly capitation payment. The Office of the Inspector General (OIG) has also had grave concerns about HCC coding by MA plans, with several audits published in 2013 showing that the MA plans were overpaid by tens of millions of dollars for unsubstantiated HCC codes, although it should be noted that the OIG used extrapolation in these audits and the MA plans protested the use of such extrapolation.

Nonetheless, this potential HCC upcoding concerns the OIG so much that they have included “Risk adjustment data—sufficiency of documentation supporting diagnoses” on their Work Plan for at least the last five years.

The game changed last week when the Department of Justice took things up a notch by announcing that a South Florida physician was sentenced to almost four years in prison for fraudulent HCC coding. In this case, the doctor was paid a monthly capitation by the MA plan for all patients under his care. That amount varied based on the patient’s individual HCC score so if the physician could increase the HCC level of the patient, the physician got a higher monthly capitation payment. So what this physician was accused of doing was to document ankylosing spondylitis on hundreds of patients who reportedly did not have it. Ankylosing spondylitis is an inflammatory disease that can cause some of the vertebrae in the spine to fuse together, causing chronic pain and loss of mobility. For comparison, ankylosing spondylitis has an HCC score of 0.374, which is equal to that of congestive heart failure and three times as high as diabetes. As a result of this over-documentation and resultant high HCC scoring of his patients, the doctor was paid almost $2 million over five years.

But what about the MA plan? Well, according to a Florida newspaper, the Department of Justice is still investigating its role, stating that they would not characterize the insurer as “blameless.”

Should the plan not have noticed that this one doctor had more than 300 patients with a relatively rare disease? And if a mere $2 million gets this doctor who were overpaid, based on extrapolation, by $22 million and $28 million, according to past OIG audits? Will the Department of Justice impose the standards laid out in the Yates memorandum from 2015?

Time will tell if there is a double standard at play.

About the Author

Ronald Hirsch, MD, FACP, CHCQM is vice president of the Regulations and Education Group at Accretive Physician Advisory Services at Accretive Health. Dr. Hirsch’s career in medicine includes many clinical leadership roles at healthcare organizations ranging from acute care hospitals and home health agencies to long-term care facilities and group medical practices. In addition to serving as a medical director of case management and medical necessity reviewer throughout his career, Dr. Hirsch has delivered numerous peer lectures on case management best practices and is a published author on the topic. He is a member of the Advisory Board of the American Case Management Association and a Fellow of the American College of Physicians.

Contact the Author

RHirsch@accretivehealth.com

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