Martin’s Point Health Care: Risk-Score Targets, Delete Lists and Ignored Audit Findings

In the Martin’s Point Medicare Advantage fraud settlement, the company agreed to pay $22,485,000 over allegations that chart reviews produced unsupported diagnosis codes and inflated Medicare payments. The former risk-adjustment manager who brought the case described a problem anyone working between coding and finance would recognize: finding an error could mean moving further from the risk-score target.

The Department of Justice announced the settlement on July 31, 2023. Martin’s Point, headquartered in Portland, Maine, operated Medicare Advantage plans for beneficiaries in Maine and New Hampshire. The government alleged that the company searched medical records for additional diagnoses, then submitted many codes that those records did not support.

Why a Diagnosis Was a Revenue Decision

Medicare Advantage, also called Medicare Part C, pays private plans a per-person amount for coverage. The Centers for Medicare and Medicaid Services adjusts that payment for each beneficiary’s demographics and diagnoses. A diagnosis associated with more expensive care can raise the risk score and the payment.

The weights assigned to Hierarchical Condition Categories help determine how a diagnosis becomes revenue. Eligible diagnoses fall into these groups for the payment calculation. A retrospective chart review looks back through medical records for diagnoses that were not submitted at the time of care. The review can therefore change what the plan receives for an existing enrollee.

A team can be asked to establish what the medical record supports, or managed against how much additional revenue it finds. The Martin’s Point complaint alleged that finance supplied the target and that looking for codes to delete put the team under pressure to miss it.

Finance Set the Risk-Score Target

The whistleblower alleged that Martin’s Point’s financial department, rather than clinical personnel, set an average risk-score target of 0.92 for payment year 2017. She worked in the risk-adjustment role from April 2016 to October 2017, giving her a view of both the target and the work expected to deliver it.

Her complaint alleged that the target was high enough to increase risk scores while staying below what the company believed would trigger a CMS audit. The point of that allegation is management’s thinking: how much could the scores rise without attracting scrutiny?

The whistleblower also alleged that Martin’s Point undertook an audit to understand why it was falling behind a $26M goal for retrospective chart-review revenue recapture. A review of diagnosis coding had become an investigation into missing revenue.

The incentive extended outside the company. The complaint alleged that chart-review contractor DxID collected a percentage of any additional Medicare revenue it generated. Its pay depended on finding codes that brought in more money.

Past Illnesses Carried as Active Conditions

The complaint’s recurring clinical examples were heart attacks, strokes and cancers treated in the past but allegedly coded as active conditions.

For one patient, the whistleblower alleged that the medical record showed prostate cancer treated by removal of the prostate in 2014 and no evidence of recurrent cancer. Martin’s Point nevertheless submitted an active prostate-cancer diagnosis for payment year 2016, according to the complaint.

The complaint alleged historical conditions coded as active: the chart described a past illness, while the submitted code claimed a current one.

The Delete List and the Revenue Meeting

The manager alleged that she built a manual list of diagnoses to delete, and that many deletions never happened to her knowledge.

The complaint described a field in the Risk Adjustment Processing System called the Delete Indicator. CMS training quoted in the complaint instructed plans to delete incorrect or invalid information they identified after submission.

According to her account, in May and June 2017 her team became alarmed that continuing to look for deletions would prevent it from hitting its targets. That is the collision at the center of one-way chart review: additions help the revenue goal, while corrections can undermine it.

According to the whistleblower’s account, a 2017 review of charts from 2013 to 2015 found that patients did not have, or their charts did not support, 60% of the illnesses reported to and paid by CMS.

The whistleblower alleged that the findings reached senior management in September 2017, but no executive at the meeting raised looking further back or correcting the problems. Instead, the discussion turned to how Martin’s Point could generate more money in light of them.

The alleged failure to act on compliance findings connects the disputed codes to the people who could have corrected them. In her account, executives treated the audit as a revenue problem.

Why the Coding Incentive Deserves Scrutiny

Studies of Medicare Advantage explain why a finance department would pay close attention to diagnosis coding. A 2015 working paper hosted by Duke University, Upcoding or Selection? Evidence from Medicare on Squishy Risk Adjustment, estimated that private-plan enrollees generated diagnosis-based risk scores 6% to 16% higher than they would have under fee-for-service Medicare. Its analysis separated differences in coding from differences in which patients enrolled.

A 2019 study in Health Management Policy and Innovation approached the question another way. It compared the diagnosis grouping used for Medicare Advantage payment with a different grouping that was not used to pay the plans. The methods produced similar scores for the fee-for-service population, but the alternative method substantially reduced Medicare Advantage scores, bringing them close to fee-for-service scores.

Both methods used diagnoses. Only one drove the plans’ payments. The study’s finding puts the financial incentive into focus: the apparent difference in sickness depended heavily on which coding method measured it.

Group Health Faced a Similar Decision

DxID also supplied the codes at issue in the government’s 2021 complaint involving Group Health Cooperative. The government alleged that executives allowed disputed heart-attack diagnoses to go forward despite internal concerns. According to the complaint, an executive acknowledged the uncertainty and accepted leaving the diagnoses in the submission:

That separate case shows why the response to a coding concern deserves as much attention as the initial code. At Group Health, the government alleged an affirmative decision to leave disputed diagnoses in. At Martin’s Point, the whistleblower described a manual deletion list, pressure over targets and a management discussion that returned to revenue. Each account connects a medical-record concern to a business decision about the submission.

What the Martin’s Point Settlement Covered

The Justice Department’s settlement covered alleged chart-review conduct from 2016 through 2019.

The government alleged that Martin’s Point submitted additional codes that patients’ medical records did not properly support, resulting in higher payments. The former Risk Adjustment Operations manager brought the qui tam case, and the resolution provided for an approximately $3.8 million whistleblower reward.

A whistleblower case under the False Claims Act can pay 15% to 30% of what the government recovers.

The manager’s vantage matters to a healthcare insider. The person checking diagnoses can see the mismatch between a chart and a code, while finance sees the income attached to that code. In this case, her allegations joined those views through the target, the deletion work and the management response. We build a health care fraud case around those connections: what the record showed, what the company submitted and what it did after someone questioned the difference.

You Saw What Happened to the Deletes

If you know why unsupported diagnoses stayed in a submission after someone flagged them, talk with our whistleblower experts about the decisions you saw. We turn your knowledge of the coding operation into a case strategy and bring in Medicare Advantage fraud whistleblower lawyers who understand risk adjustment and failed corrections. We stay beside you to build your strongest Medicare Advantage whistleblower case and pursue a recovery.