Medicare Advantage aggressive coding or fraud

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The New York Times has a good story from the 15th on a False Claims Act lawsuit filed by a former United Healthcare employee.  It alleges UHC systemically defrauded the US government of billions from up-coding its Medicare Advantage claims to get bigger risk adjustment payments.  This is a big deal.  Medicare knows that the incentive in Medicare Advantage is to make the patients look as sick as possible to maximize upcoding. A recent estimate has coding differentials leading to a $20 billion dollar a year payment differential between Medicare Advantage and Fee for Service Medicare for intrinsically similar patients.

At the heart of the dispute: The government pays insurers extra to enroll people with more serious medical problems, to discourage them from cherry-picking healthy people for their Medicare Advantage plans. The higher payments are determined by a complicated risk scoring system, which has nothing to do with the treatments people get from their doctors; rather, it is all about diagnoses.

Diabetes, for example, can raise risk scores by varying amounts, depending on a patient’s complications. So UnitedHealth gave people with diabetes intensive scrutiny, to see if they had any other conditions that the diabetes might have caused.

As Mr. Poehling’s lawyer, Mary Inman, described it, the government would pay UnitedHealth $9,580 a year for enrolling a 76-year-old woman with diabetes and kidney failure, for instance, but if the company claimed that her diabetes had actually caused her kidney failure, the payment rose to $12,902 — an additional $3,322. Ms. Inman is with the law firm of Constantine Cannon in San Francisco.

We need to differentiate between aggressive coding and fraud.  The key question in this example is not whether or not UHC got a doctor to say that the kidney failure was caused by diabetes but whether or not the evidence in the chart supports that assertion.

If it is medically supported from the chart, history and corroborating results, this is not fraud.  It is aggressive coding designed to maximize revenue.  If it is not supportable, then it is either fraud or abuse.  That will be the key area of argument.  Does the evidence show that the diagnosis codes that UHC is chasing are supportable by medical evidence?

Betsy Nicoletti is a coding specialist who shared her coding book with me.  I want to highlight a legitimate example of what happens at every health plan that has risk adjusted plans.  The example is about diabetes:

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