OIG Finds $462 Million in Potential Medicare Advantage Overpayments: What Acute Stroke Coding Reveals About Risk Adjustment Vulnerabilities

With ongoing scrutiny surrounding Medicare Advantage (MA) Risk Adjustment (RA), the Office of Inspector General (OIG) has issued another significant finding in its May audit report titled:

“CMS Potentially Overpaid Medicare Advantage Organizations $462 Million Based on Certain Unsupported Acute Stroke Diagnosis Codes.”

Understanding the Medicare Advantage Risk Adjustment Model

When discussing Medicare Advantage Risk Adjustment, it is important to remember that the program is prospective.

CMS uses diagnosis codes assigned during one calendar year (the service year) to determine Hierarchical Condition Categories (HCCs) and calculate risk scores for the following calendar year (the payment year).

As a result, an enrollee’s risk score does not change during the year in which a diagnosis is made.

The OIG stated:

“Under the Medicare Advantage (MA) program, CMS makes monthly payments to MA organizations according to a system of risk adjustment that depends on the demographic characteristics and health status of each enrollee.”

Key Findings from the OIG Audit

The OIG reported the following findings:

• For all 97 sampled enrollees, the high-risk acute stroke diagnosis codes submitted to CMS by Medicare Advantage organizations were not supported by the associated medical records.
• Based on the sample results, the OIG estimated that CMS made approximately $462 million in potential net overpayments to Medicare Advantage organizations during 2021.

Why Acute Stroke Diagnoses Matter in Risk Adjustment

Several diagnoses are considered high-risk conditions that significantly affect HCC calculations and Medicare Advantage payments.

Historically, root causes of inaccurate reporting have often involved:

• Clinical documentation deficiencies
• Medical coding inaccuracies
• Inconsistent diagnosis validation practices

In this audit, the OIG compared physician-submitted diagnoses for specific service dates with corresponding hospital inpatient and outpatient coded data from the same time period.

The review found that physician settings were reporting an acute stroke diagnosis, while hospital records for the same timeframe did not support or report the condition.

What Healthcare Organizations Should Take Away from This Audit

This report serves as an important reminder to ensure appropriate risk adjustment audits are being conducted.

Organizations should consider reviews that compare:

• Hospital-submitted diagnoses
• Physician-submitted diagnoses
• Documentation consistency across care settings
• Diagnosis support within the medical record

The goal is not only accurate reimbursement, but also defensible compliance and audit readiness.

Addressing Potential Overpayments

When healthcare organizations identify potential overpayments, action is required.

Specific regulatory guidance—commonly referred to as the 60-Day Repayment Rule—establishes requirements for reporting and returning identified overpayments.

This area requires close collaboration among:

• Compliance teams
• Revenue Cycle leaders
• Coding professionals
• CDI teams
• Audit and monitoring functions

Organizations should maintain diligence in tracking, trending, and responding to identified overpayment risks.

Conclusion

The OIG’s findings reinforce the importance of accurate clinical documentation, diagnosis validation, and coding practices within Medicare Advantage Risk Adjustment programs.

As regulatory scrutiny continues to increase, healthcare organizations must proactively assess risk, validate high-impact diagnoses, and ensure documentation supports submitted codes.

A focused auditing strategy can help organizations identify vulnerabilities early, reduce compliance exposure, and strengthen confidence in risk adjustment reporting.

Reference

1. OIG Audit Report: “CMS Potentially Overpaid Medicare Advantage Organizations $462 Million Based on Certain Unsupported Acute Stroke Diagnosis Codes”
2. § 401.305 Requirements for Reporting and Returning Overpayments

By: Gloryanne Bryant, RHIA, CDIP, CCS, CCDS | HIP Coding and CDI Consultant