Medicare Advantage Chart Reviews Drive Higher Diagnoses and Federal Payments
New research by the Kaiser Family Foundation (KFF), supported by Arnold Ventures, has found that chart reviews are a prevalent practice in Medicare Advantage plans, impacting enrollee diagnoses and increasing plan payments from CMS.
Analyzing a 20% sample of 2022 Medicare Advantage encounter data, the study found that 62% of enrollees underwent at least one chart review, and diagnoses added through these reviews boosted payments for 17% of enrollees. Chart reviews involve Medicare Advantage plans reviewing medical records to capture comprehensive documentation of an enrollee's health status, which in turn influences the risk adjustment payments plans receive from the federal government based on predicted costs. This practice is unique to Medicare Advantage and not used in Traditional Medicare, contributing significantly to higher federal spending; estimates suggest chart reviews added approximately $24 billion in payments in 2023 alone.
The study revealed that chart reviews typically result in additional diagnoses rather than deletions, with 17% of enrollees having a new condition category added that was not present in providers' encounter data. Conditions commonly added include vascular disease, chronic obstructive pulmonary disease, diabetes with complications, mental health disorders, congestive heart failure, morbid obesity, and autoimmune diseases. Only about 1% of enrollees had diagnoses removed after chart reviews, indicating a net increase in documented health conditions.
Utilization of chart reviews varies notably among Medicare Advantage insurers. CVS Health and Elevance Health had the highest rates of chart reviews, affecting 86% and 82% of their enrollees respectively, while UnitedHealthcare and Centene conducted reviews for 77% and 73%. Humana and Kaiser Foundation Health Plan performed significantly fewer chart reviews at 34% and 27%. These differences likely reflect varied strategies in data collection, use of health risk assessments, patient engagement to supplement health data, and the resources available for conducting reviews, including the adoption of AI technologies.
Artificial intelligence is increasingly employed to enhance accuracy and efficiency in chart reviews and risk adjustment coding. However, its use has attracted regulatory scrutiny amid concerns about potential upcoding to maximize federal payments. These concerns led to legislative proposals such as the No Unreasonable Payments, Coding, or Diagnoses for the Elderly (No UPCODE) Act, which seeks to reform Medicare Advantage payment methods to reduce inappropriate coding practices. CMS has also cautioned plans to ensure AI tools are used appropriately without denying necessary care.
This research highlights the growing role of chart reviews and advanced technology in Medicare Advantage risk adjustment, with significant implications for federal healthcare spending and regulatory oversight. Insurers, policymakers, and compliance professionals are closely monitoring these developments to balance accurate risk documentation with program integrity and fiscal responsibility.