Dispute Over ICD Guidelines Provision in Pending False Claims Act Case Casts Doubt on Legality of Common Coding Practices in the Medicare Advantage Risk Adjustment Space

Providers should be aware of CMS’s recent aggressively restrictive stance on Medicare Advantage (“MA”) risk adjustment coding. In  U.S. ex rel. Teresa Ross v. Independent Health Association, et al. – a False Claims Act (“FCA”) case alleging MA risk adjustment fraud – the government has taken the position that diagnosis or “Dx” codes submitted to CMS under the Medicare Advantage program “must be documented in the medical record as relevant to patient care during an encounter in the DOS year, and not merely mentioned, suggested, or inferred anywhere from records from past years.” Complaint at ¶77 (emphasis supplied). This, the government argues, is derived from § IV(K)73 of the ICD-9-CM Official Guidelines for Coding and Reporting (“ICD Guidelines”). ICD Guidelines, as conceded by Defendants, do, in fact, have the force of law. See 45 C.F.R. § 162.1002(a)(1)(i), (b)(1), (c)(2), and (c)(3) (“The Secretary [of HHS] adopts . . . the official ICD-10-CM Guidelines for coding and reporting.”). What is disputed, however, is the proper interpretation of § IV(K)73, which reads, in pertinent part: “Code all documented conditions that coexist at the time of the encounter/visit, and require or affect patient care treatment or management. Do not code conditions that were previously treated and no longer exist . . .” Id. (emphasis supplied).

The government insists that the above-bolded language means that Dx codes – and in particular Dx codes mapping to heavily-weighted hierarchical condition categories (“HCCs”) that affect patient risk scores – are submitted properly only when the coding physician has documented how the condition affected (or was required for) care during a face-to-face visit with the patient. See Government Opposition Brief at 11. This is a much narrower construction of the ICD Guidelines than many Medicare Advantage Organizations (“MAOs”) and MA-contracted providers generally apply to their Dx coding practices. Defendants, taking a broader view of the Guidelines, argue that CMS, in past agency guidance, has construed § IV(K)73 to permit “coding from past medical history . . . EKGs, and related records[,]” even where these Dx codes may not have been “require[d] or affect[ed] patient care treatment or management” during a particular face-to-face patient visit. See Defendants’ Reply Brief at 4-5.

While the Independent Health Association case is trial level and limited to the Western District of New York, the government’s briefing offers providers a glimpse into the increasingly restrictive view that CMS appears to be taking with respect to MA risk adjustment coding. Consulting with competent healthcare counsel with experience in this expanding field is thus more crucial than ever to maximize regulatory compliance within your practice.

Contact Frier Levitt for a consult. We offer a suite of MA risk adjustment-related services, including compliance risk assessment and risk mitigation plans; OIG self-disclosure protocols in the event regulatory risk is determined to be significant; litigation options; and population health contract drafting, review, and negotiation.