CMS Inspector General Find Millions in Overpayment to Anthem Health Care

On May 24, 2021, CMS’ Inspector General announced a finding that health insurer Anthem failed to comply with some federal coding requirements, resulting in overpayments to Anthem of $3.47 million. 

Under the Medicare Advantage program, CMS makes monthly payments to organizations according to a system of risk adjustment determined by the health status of each enrollee. CMS relies on Medicare Advantage insurers to collect diagnosis codes from providers and submit them to CMS. Some of the diagnoses are at a higher risk of being miscoded. 

For the audit, CMS sampled 203 unique enrollee-years from Anthem and focused on seven groups of high-risk diagnosis codes to determine whether the codes Anthem submitted to CMS for the risk-adjusted payment program complied with federal requirements.

According to the federal audit, for 123 of the 203 enrollee-years sampled, the diagnosis codes Anthem submitted to CMS were not supported in the medical records and resulted in $354,016 in overpayments. Based on the sample size, the inspector general estimated that Anthem received at least $3.47 million of overpayments for miscoding these high-risk diagnosis codes during the audit period of 2015 and 2016.

The inspector general recommended that Anthem refund $3.47 million in overpayments to CMS, identify similar instances of noncompliance, and improve its policies to ensure compliance with federal requirements for diagnosis codes.

Anthem disagreed with the inspector general’s findings and recommendations and said an audit reflected misunderstandings of legal and regulatory requirements underlying the Medicare Advantage organization. 

Despite Anthem’s objections, the inspector general maintained its findings and recommendations.