The OIG and DOJ expect compliant HCC documentation

Jan. 31, 2022 / By Chris Berg, RHIA

As a clinical documentation integrity (CDI) and coding professional, I’ve often heard the statement:

If it’s not documented, it wasn’t done.

I have used this statement educating physicians and nurses on the importance of accurate and complete documentation of the patient’s clinical picture. I have used this statement while teaching ICD-10-CM and CPT® coding classes. It also applies to documentation and coding of hierarchical condition category (HCC) diagnoses – if an HCC diagnosis is not documented and supported with Monitoring, Evaluating, Assessing or Treating (MEAT) criteria, then it should not be coded and submitted on a claim.

HCC diagnosis codes are used in payment to Medicare Advantage (MA) risk adjustment plans. Because MA plans are federally funded, the Office of Inspector General (OIG) and the United States Department of Justice (DOJ) conduct coding audits to confirm there is documentation in the record to support HCC diagnosis codes.  

The OIG continues to perform audits of HCC codes; this has been on the organization’s work plan for years. Under the MA program, the Centers for Medicare & Medicaid Services (CMS) makes monthly payments to MA organizations according to a system of risk adjustment that depends on the health status of each enrollee. MA organizations are paid more for providing benefits to enrollees with diagnoses associated with more intensive use of health care resources than to healthier enrollees who would be expected to require fewer health care resources.

To determine the health status of enrollees, CMS relies on MA organizations to collect diagnoses from their providers and submit these codes to CMS. CMS then maps these codes into HCCs based on similar clinical characteristics, severity and cost implications. CMS makes higher payments for enrollees who receive diagnoses that are HCCs. The HCC coding audits performed by the OIG protect the integrity of Health and Human Services (HHS) programs and ensures the appropriate use of federal funds.

Although many HCC coding audits performed by the OIG are focused on MA organizations (like Humana with $197.7 million in overpayments), the DOJ has filed lawsuits against health care providers in violation of the False Claims Act for “unsupported” HCC diagnosis codes. A recent example is a health system that received a portion of payments for submitting HCC diagnosis codes that were not supported in the patient’s clinical notes. As a result, the organization agreed to pay $90 million and were required to enter into a five-year Corporate Integrity Agreement (CIA) with the United States Department of Health and Human Services, Office of Inspector General. The CIA required the organization to incorporate a risk adjustment program as part of its corporate compliance program and have an independent review organization to evaluate its MA patient records and diagnoses associated with these records.

The OIG, through the Federal Register, February 23, 1998, offered compliance program guidance for hospitals. This guidance assists hospitals in the development of an effective compliance program, including creating internal controls that promote adherence to federal and state law, and the program requirements of federal, state and private health plans. There are seven elements of an effective compliance program:

1. Implementing written policies, procedures and standards of conduct
2. Designating a compliance officer and compliance committee
3. Conducting effective training and education
4. Developing effective lines of communication
5. Conducting internal monitoring and auditing
6. Enforcing standards through well-publicized disciplinary guidelines
7. Responding promptly to detected offenses and undertaking corrective action

Hospitals performing a pre-bill focused audit of MA patients’ coding and reviewing diagnoses for supporting documentation in the record can help alleviate a false claims issue. When an issue is found with unsupported HCC diagnosis codes, this must be communicated back to the physician. Education on compliant documentation and coding guidelines is needed and a follow-up coding audit should be performed. Hospitals that proactively educate, audit and monitor physicians’ documentation and coding are ahead of the compliance curve. 

There has been a steady increase in MA enrollment from 2003 when approximately 13 percent of the Medicare population was enrolled in an MA plan, to 2021, when MA enrollees account for approximately 40 percent of all Medicare beneficiaries. With this increase in MA enrollees and the increase in number of MA plans available to beneficiaries, the OIG and DOJ will continue conducting HCC diagnosis coding audits to ensure federal funds are being spent appropriately. Today, the OIG work plan includes several MA plan related audits, so they will be performing HCC coding audits for several years.

The importance of compliant documentation and coding of HCC diagnosis codes cannot be overstated. It reflects the accurate clinical picture of the patient, proper payment and use of federal funds.

Chris Berg, RHIA, CCS, CCDS-O, CHC is an Ambulatory Services Consultant for 3M Health Information Systems.