The Office of Inspector General (OIG) released a recent report (4/2021) titled “Medicare Advantage Compliance Audit of Diagnosis Codes that Humana, Inc., (Contract H1036) Submitted to CMS”, which should wave a flag for compliance and Health Information Management coding professionals.

Under Medicare Advantage (MA), the risk adjustment (RA) determination is made using demographics and diagnosis codes to ascertain the health status, risk, and cost of care for the beneficiary. Medicare uses an algorithm and mapping process that takes certain diagnosis codes, on the basis of similar clinical characteristics and severity and cost implications, and groups them into Hierarchical Condition Categories (HCCs). Each HCC carries a risk status/factor (weight), which is used in calculating the RA payment amount. Those patients with higher health risk generate a higher HCC payment to the Medicare Advantage Organization (MAO) or health plan.

The OIG conducted an audit on 200 Humana health plan enrollees from the service year of 2014 and payment year of 2015. The OIG audit objective was to determine whether Humana submitted diagnosis codes to the Centers for Medicare and Medicaid Services (CMS) for use in the risk adjustment program in accordance with Federal requirements. Medical records were provided by Humana in order support the 1525 HCCs for the 200 enrollees.  The OIG audit summary states:

  • the risk scores should have been based on 1,359 HCCs (1,322 validated HCCs + 22 other HCCs associated with more and less severe manifestations of diseases + 15 additional validated HCCs that Humana did not submit to CMS). On the basis of our sample results, we estimated that Humana received at least $197,720,651 in net overpayments for 2015.

Keep in mind that if the audit cannot validate the HCC either because the medical records do not meet Medicare signature requirements or because the MAO (i.e., Humana) could not locate the records, these types of errors result in overpayments.

In this particular audit, the OIG did identify some overpayments and even some underpayments. Humana has disputed some of the OIG findings regarding overpayments, but the published report does give us cause to be more attentive to our Risk Adjustment diagnosis coding and the supporting documentation. It should be noted that this audit was part of a series of audits in which the OIG is reviewing the accuracy of diagnosis codes that MAOs submitted to CMS. You can access this full OIG report at: Medicare Advantage Compliance Audit of Diagnosis Codes That Humana, Inc., (Contract H1036) Submitted to CMS, A-07-16-01165 (

Education and audits regarding Risk Adjustment HCC diagnosis coding is an imperative for all those who provide care to these specific Medicare Part C beneficiaries. What are you waiting for? Now is the time to be proactive and assess your HCC diagnosis code accuracy. As Health Information Management professionals, it is part of our responsibility to ensure compliance and data integrity, so HCC validation needs to be completed.

RMC has many years of experience with Risk Adjustment and we have the skilled and knowledgeable auditors and educators on and for Risk Adjustment documentation and coding.

Written by Gloryanne Bryant, RHIA, CDIP, CCS, CCDS, AHIMA Approved ICD-10-CM/PCS Trainer

Reimbursement Management Consultants (RMC) can provide assistance with medical coding support, auditing, education, compliance consulting, and HCC/risk adjustment services. RMC is a woman-owned, US-based and operated company which specializes in a variety of medical coding and auditing services. Contact us here.