“Refreshing” – A Risk Adjustment Coding Practice to be Avoided by Providers in Medicare Advantage Contracts
The closely-watched Kaiser Permanente consolidated False Claims Act (“FCA”) action,[1][2] involving allegations of substantial Medicare Advantage risk adjustment fraud, has highlighted the dangers of a particular coding practice/policy known as “refreshing.” Refreshing refers to a “process related to chronic conditions . . . [Since] Medicare Advantage plans are compensated based on medical conditions diagnosed in the previous payment year[,] [t]herefore, if a patient has a chronic condition, then that condition must be rediagnosed each year – i.e., refreshed. [But where a provider is ] . . . told to include the chronic condition as a diagnosis for a visit even if that condition was not at issue in the patient visit[,]” the FCA may be violated. Osinek at *4 (emphasis supplied). Stated another way, refreshing occurs where a provider, knowledgeable that a given patient was diagnosed with a chronic condition in years past, simply re-codes that patient with the same diagnosis without evaluating and re-diagnosing the patient with this condition during a face-to-face patient visit.
Refreshing can be particularly suspect (and thus likely subject to government FCA-related scrutiny) where the coding physician is different from the physician(s) who diagnosed the patient with the chronic condition in years past. This practice is even more flagrant where the coding physician lacks the board certification or specialization generally deemed necessary to appropriately diagnose the chronic condition at issue. These red flags grow larger where the Hierarchical Condition Categories (HCCs) mapping to the chronic condition(s) at issue are high-value, i.e., where they significantly increase a patient’s risk adjustment factor and thereby increase PMPM payments from CMS to the patient’s Medicare Advantage plan. See, Osinek at *29.
If the Medicare Advantage Organization (“MAO”) with whom your practice is contracted has or is pressuring you to “refresh” chronic diagnoses for patients – a practice that, upon information and belief, is not uncommon in the Medicare Advantage space – you should consider seeking legal counsel. Competent healthcare counsel versed in the esoteric-but-increasingly crucial law surrounding Medicare Advantage risk adjustment coding can assess whether your practice may have incurred regulatory risk as a result of “refreshing”; assist your practice in compliantly self-disclosing the conduct to the government, if necessary; assist your practice in crafting a qui tam complaint against the MAO; and/or draft standard operating procedures and other training materials for your physicians and coders to mitigate and reduce regulatory risk.
Contact Frier Levitt to further discuss. Our Medicare Advantage risk adjustment group can offer your practice an array of risk mitigation strategies, litigation options, and contract negotiation services to maximize your practice’s Medicare Advantage-generated revenues while optimizing compliance.
[1] The six actions, now consolidated, include United States ex rel. Osinek v. Kaiser Permanente, 3:13-cv-03891 (N.D. Cal.); United States ex rel. Taylor v. Kaiser Permanente, et al., 3:21-cv-03894 (N.D. Cal.); United States ex rel. Arefi, et al. v. Kaiser Foundation Health Plan, Inc., et al., 3:16-cv-01558 (N.D. Cal.); United States ex rel. Stein, et al. v. Kaiser Foundation Health Plan, Inc., et al., 3:16-cv-05337 (N.D. Cal.); United States ex rel. Bryant v. Kaiser Permanente, et al., 3:18-cv-01347 (N.D. Cal.); and United States ex rel. Bicocca v. Permanente Med. Group, Inc., et al., No. 3:21-cv-03124 (N.D. Cal.).
[2] On 5/5/22, a number of the cases constituting the consolidated action were dismissed on grounds unrelated to the lawfulness of “refreshing.” See U.S. ex rel. Osinek v. Permanent Medical Group, Inc., 2022 WL 1422944 (N.D.Ca. 2022).
