Medicare Advantage is a private way to get Medicare benefits. This program works by giving private companies a fixed monthly fee for each member. Medicare calls this payment system “capitation”. However, the payment amount changes based on the health of the patient. This process is known as “risk adjustment”. It means that plans get more money if they treat sicker people.
Recent fraud cases show how some organizations abuse this system. For example, the Justice Department recently settled a massive case with Kaiser Permanente. The health giant agreed to pay $556 million to resolve fraud claims. Prosecutors alleged that Kaiser pressured doctors to add diagnoses to medical records. These codes were often added months or years after the actual patient visits.
Similarly, UnitedHealth has faced intense legal scrutiny regarding its billing practices. A Senate report recently accused the company of “aggressively” gaming the system. Investigators found that UnitedHealth used home visits to capture more diagnosis codes. This helped the company maximize risk scores and increase its profits. Meanwhile, in Florida, executives from The Villages area were convicted for a $34 million scheme. They exploited elderly patients by billing for unnecessary medical equipment.
These cases share several common traits that healthcare professionals should notice. First, they all involve “upcoding,” which makes patients appear sicker than they truly are. Second, many of these schemes lack proper clinical documentation to support the billed codes. Finally, financial incentives often drive these organizations to prioritize profits over accurate reporting.
Understanding the Pressure to Document
Many providers now feel intense pressure to document more complex codes. This means administrators or insurers push clinicians to record diagnoses that may not be current. Why does this happen? The primary reason is financial gain for the insurance plan. When a provider adds a high-risk code, the plan’s risk score goes up. This results in a higher monthly payment from the government.
This pressure can lead to ethical and legal risks for individual doctors. If a provider documents a condition that is not actively managed, they risk committing fraud. Clinicians should focus on the “MEAT” criteria: Monitor, Evaluate, Assess/Address, and Treat. If you are not doing these four things, you should not code the condition.
What should a provider do if they feel this pressure? First, you should maintain very clear and detailed clinical records. Moreover, you must ensure every diagnosis is linked to the care you provide. If an organization asks you to upcode, you should report it through your internal compliance channel. You can also seek guidance from external experts like Taino Consultants or EPI Compliance.
Healthcare professionals must take proactive steps to stay safe. You should conduct regular internal audits to check for coding errors. Additionally, you should train your staff on the latest Medicare Advantage rules. Resources from the U.S. Department of Health and Human Services (HHS) can help you understand legal requirements.
Take control now: review, refresh, and actively manage your program. For quick, practical guidance, see EPICompliance webcasts (Watch on YouTube).