Three Coding Areas in the Government’s Crosshairs

Today, I’ll be writing about three key areas under review by the U.S. Department of Health and Human Services (HHS) Office of Inspector General (OIG): Medicare payments for lower extremity peripheral vascular procedures, Medicare Part C audits of diagnosis documentation, and audits of Medicare Part C health risk assessment diagnosis codes. These audits aim to safeguard Medicare’s financial integrity and ensure accurate billing practices.

First, let’s address Medicare payments for lower extremity peripheral vascular procedures. These treatments, used for conditions like peripheral artery disease, can improve circulation and prevent serious complications. However, concerns have emerged regarding their potential overuse and improper billing.

The OIG has flagged specific revascularization procedures (identified by CPT® codes 37220-37235 and 0234T-0238T) for closer examination in its 2025 Work Plan. Medicare paid approximately $1.16 billion for these procedures in office-based settings in 2022 and 2023.

There were numerous reports from the Centers for Medicare & Medicaid Services (CMS) and whistleblowers that suggest these CPT codes may be prone to billing errors or fraudulent claims. As a result, the OIG will analyze whether improper payments, waste, or abuse have occurred. While details of the audit remain limited, this scrutiny reinforces the need for accurate documentation and adherence to Medicare billing guidelines.

Next, Medicare Part C, or Medicare Advantage, operates under a risk-adjusted payment model, whereby insurers receive higher reimbursements for enrollees with more complex conditions. However, errors in diagnosis coding can lead to significant improper payments. CMS estimates that about 9.5 percent of payments to Medicare Advantage organizations are improper, mainly due to unsupported diagnoses. Some conditions are particularly prone to documentation errors, raising concerns about inflated risk scores.

To address this, the OIG is conducting a targeted audit to review whether these diagnoses are properly supported by medical records and meet federal compliance standards. Ensuring accuracy in coding is critical to preventing overpayments and maintaining program integrity.

Finally, the OIG is auditing Medicare Part C health risk assessment (HRA) diagnosis codes. Medicare Advantage organizations use HRAs to collect enrollee health data, which influences risk-adjusted payments from CMS. However, concerns have arisen about diagnoses that appear only in HRAs without supporting medical documentation. The OIG’s audit focuses on cases where these diagnoses resulted in increased payments based on hierarchical condition categories (HCCs).

The goal is to determine whether these diagnoses were properly documented and met federal requirements. This underscores the importance of using HRAs appropriately, to enhance patient care, not simply to justify higher payments.

These audits highlight ongoing concerns about Medicare billing and documentation, particularly within Medicare Advantage. Whether evaluating revascularization procedures, risk-adjusted coding, or HRAs, the key takeaway is clear: accuracy and compliance are essential. As regulatory scrutiny increases, providers and payors must prioritize proper documentation to ensure the integrity of the Medicare program. I will report on the findings as more information is released related to these audits.

Programming note: Listen live today when Angel Comfort cohosts Talk Ten Tuesday with Chuck Buck at 10 Eastern.