I have explained before the issues around how Medicare pays Medicare Advantage plans, with a system relying heavily on how sick the members are. The health issues faced by a particular member are addressed by coding and the more issues, the higher the risk score. As is always the case, when a reimbursement method relies on certain metrics, there is a huge incentive to maximize those metrics and the resulting reimbursement. It is clear that the MA plans are being paid more than they need to be paid to actually treat their members and there is a lot of discussion on how to fix that. A recent issue of Health Affairs has several articles discussing potential changes. An excellent overview of risk adjustment goals and issues is included. (HA Article)
In two adding patient survey data was discussed. This would provide some verification of diagnoses submitted by providers. (HA Article) (HA Article) But this objective can be accomplished more effectively by use of claims and electronic medical record data. The plans should be required to prove that for any diagnosis code submitted there was actual treatment occurring. Another article discusses not including ten diagnostic groups in the formula for plan payments. These groups account for almost all the gap in risk scores in MA versus fee-for-service Medicare, but they also reflect serious health issues, like heart failure, chronic lung disease and depression. Concerns would be that excluding these codes from the payment formula might lead to undertreatment of these important diseases. (HA Article)
My personal suggestion is that plans should be required to submit proof of diagnosis and treatment of any condition that they submit for a member, and that proof of treatment should be required for each succeeding year that the member remains in the plan. That should ensure that only “real” diagnoses reflecting actual health needs are included. We want MA plans to comprehensively assess the health needs of members and to proactively manage chronic health conditions. And there should be a discount on the payment amounts calculated as due to a plan for a particular member, because the MA plans have demonstrated and are supposed to be able to manage care effectively. Those two steps would be the best way to control payments while minimizing unanticipated consequences.
