The Background: Why OIG Audited Coventry

Under the Medicare Advantage program, CMS makes risk-adjusted payments based on enrollees’ documented health conditions. These diagnoses, submitted by MA organizations, must be backed by medical record documentation.

But some conditions — especially those with high payment weights — are more susceptible to miscoding or lack of clinical support.

That’s why the Office of Inspector General (OIG) targeted 10 high-risk diagnosis groups submitted by Coventry Health and Life Insurance Company (Contract H1608) for payment years 2018 and 2019.

What OIG Found: Unsupported HCCs and Big Overpayments

In a sample of 300 enrollee-years, OIG found that 249 had unsupported diagnosis codes — a staggering 83% error rate.

As a result, the audit uncovered:

$752,587 in net overpayments within the sample
An extrapolated estimate of $6.9 million in net overpayments to Coventry for just 2018 and 2019

OIG concluded that Coventry’s internal policies and procedures to prevent, detect, and correct HCC coding errors were inadequate, leaving CMS exposed to significant financial loss.

What the OIG Recommends

The report didn’t pull any punches. The OIG made three clear recommendations to Coventry:

Refund the estimated $6.9 million in overpayments to the Federal Government
Identify and refund overpayments for similar diagnosis submissions outside of the audit period
Improve compliance processes to better align with CMS’s risk adjustment requirements

Coventry disagreed with some of the audit’s findings and rejected all three recommendations, but the report stands as a strong signal from OIG and CMS about enforcement expectations.

What This Means for the Industry

This isn’t just about one health plan — this is a compliance spotlight moment for the entire Medicare Advantage space.

The key takeaway is simple but critical:

If your diagnosis code isn't backed by valid, timely medical documentation — it shouldn't be submitted.

This includes:

Clinical notes showing condition monitoring, treatment, or evaluation
Labs, imaging, prescriptions, or referrals supporting the diagnosis
Evidence that the condition was present and addressed during the payment year

Anything less invites audit risk, clawbacks, and reputational damage.

Lessons for MA Plans, Coders & Providers

To avoid ending up in a future audit headline, Medicare Advantage organizations should:

Conduct internal retrospective audits of high-risk HCCs
Validate diagnosis codes before submission, not after
Train coders and providers on active condition management documentation
Align internal workflows with CMS and OIG expectations for clinical support

Coding accuracy isn’t just about revenue — it’s about defensibility.

Final Thoughts: This Audit Isn’t the Last — It’s the Start

As CMS and the OIG expand their focus on risk adjustment compliance, every MA plan should consider this report a warning — and an opportunity.

Plans that prioritize clinical validation, invest in documentation improvement, and build audit-ready workflows will not only avoid clawbacks — they’ll lead the way in transparency and patient-centered care.

Need support reviewing your HCCs before CMS or OIG does?
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