HHS OIG report shows how code adjustments may indicate denials by MAOs

In a report released March 2 by OIG, investigators found “that most 2019 MA (Medicare Advantage) encounter records contained at least one adjustment code and 55 million of these records contained codes that may indicate the denial of payments by MAOs Medicare Advantage Organizations).”

The report’s key take away was that while most of the MA records reviewed contained a payment adjustment, “identifying whether these adjustments are payment denials is challenging and imprecise. Requiring MA organizations (MAOs) to definitively identify payment denials on encounter records submitted for MA would enhance program oversight and help combat fraud.”

While OIG is looking at this issue from a fraud oversight perspective, the impact to hospitals can be seen with regard to revenue integrity teams’ attempts to easily identify a denied claim from a payment adjustment.

OIG recommended CMS change its requirements for data records. “To strengthen MA program oversight and combat fraud, we recommend that CMS require MAOs to definitively indicate on MA encounter data records when they have denied payment for a service on a claim. CMS did not concur or nonconcur with our recommendation.”

See the full OIG report here.


“The Inability To Identify Denied Claims in Medicare Advantage Hinders Fraud Oversight,” U.S. Department of Health and Human Services, Office of Inspector General. March 2, 2023.

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