Medicare Advantage plans see payments rise with chart reviews

Chart reviews are popular in Medicare Advantage, leading to more diagnoses for enrollees and higher payments for plans, according to new research from KFF.

Supported by Arnold Ventures, KFF analyzed a 20% sample of Medicare Advantage encounter data from 2022 for all service types, including inpatient, outpatient, carrier, home health and skilled nursing facility care. The analysis revealed that about six in ten, or 62%, of Medicare Advantage enrollees had at least one chart review record.

Additionally, diagnoses added from chart reviews boosted payments from CMS to the plan sponsors for one in six, or 17%, of Medicare Advantage enrollees.

Medicare Advantage plans conduct chart reviews to ensure comprehensive documentation of an enrollee's provider encounters and complete health status. After all, plans are paid by CMS based on the expected costs of an enrollee, meaning those with more health conditions result in higher payments since they are expected to incur greater costs.

However, the formula for paying Medicare Advantage plans is not without its drawbacks. Critics have argued that adjusting payments for enrollee health status incentivizes plans to document the health conditions of their enrollees more intensely compared to Traditional Medicare. As a result, Medicare Advantage enrollees appear sicker, resulting in higher payments from the federal government, KFF explained.

Chart reviews are also not used in Traditional Medicare. Instead, Medicare Advantage plans leverage this practice, which adds to higher payments to the tune of $24 billion in 2023 alone, according to a 2025 report from the Medicare Payment Advisory Commission.

The KFF analysis found that chart reviews were more likely to add a diagnosis than remove one, with 17% of enrollees in the data sample having a chart review that resulted in an additional condition category affecting their risk score, even though it did not appear on any encounter records submitted by providers.

Additionally, about 30% of the 18 million enrollees with at least one chart review in 2022 had a diagnosis that increased federal payment to the plan sponsor.

Commonly added conditions included vascular disease; chronic obstructive pulmonary disorder; diabetes with chronic complications; major depressive, bipolar, and paranoid disorders; congestive heart failure; disorders of immunity; morbid obesity; and rheumatoid arthritis and inflammatory connective tissue disease.

In contrast, only 1% of all Medicare Advantage enrollees with at least one chart review had a diagnosis deleted that affected risk adjustment.

Utilization of chart reviews varied significantly by payer. CVS Health Corporation and Elevance Health had the highest number of chart reviews based on the data sample, with 86% and 82% of enrollees, respectively, undergoing a chart review.

UnitedHealthcare and Centene trailed with 77% and 73% of enrollees, respectively, while Humana had 34% of enrollees undergo a chart review and Kaiser Foundation Health Plan had 27%.

KFF researchers attributed the difference in rates among payers with the highest enrollment numbers to different approaches to data collection and verification. For example, some payers use health risk assessments in addition to chart reviews, while others incentivize enrollees to contribute data about their health status.

Differences in rates could also reflect the resources payers have to conduct chart reviews, including the use of AI for chart reviews.

Medicare Advantage payers are increasingly using AI for operations, including chart reviews. The technology is designed to increase accuracy and efficiency for risk adjustment and coding, while freeing capacity for staff to do more complex tasks. However, the use of AI in Medicare Advantage has recently come under scrutiny as federal spending on the program accelerates.

Policymakers have alleged that these payers are using AI to upcode to find diagnoses purely for risk adjustment and higher payments from the federal government. This concern led to the introduction of the No Unreasonable Payments, Coding, or Diagnoses for the Elderly Act, or the No UPCODE Act, earlier this year, which aims to reform how Medicare Advantage plans get paid to minimize upcoding.

CMS has also warned Medicare Advantage payers to ensure appropriate use of the technology, adding that they cannot deny care using AI tools.

Jacqueline LaPointe is a graduate of Brandeis University and King's College London. She has been writing about healthcare finance and revenue cycle management since 2016.