By GEORGE HALVORSON
This is the third part of former Kaiser Permanente CEO George Halvorson’s critique of Medpac’s new analysis of Medicare Advantage. Part 1 is here. Part 2 is here. Eventually I’ll be doing a summary article about all the back and forth about what Medicare Advantage really costs!-Matthew Holt
Risk status and RAF
What is on the MedPac radar screen and what keeps their attention and what actually takes up several long portions of the annual report this year is the other factor that changes the payment levels to the plans — the risk status of their enrollees.
The capitation levels that are paid to the plans are affected very directly by the health status levels of the actual enrollees.
Risk levels for the members set and change the payment levels for the plans. The very first capitation programs didn’t factor in relative risk status for the members, and it was possible for some care sites to make major profits on capitation just by enrolling healthier than average people and by being paid an average cost level for each area for the people they enrolled.
That initial payment process has evolved very intentionally into having diagnosis-based cost factors that attempt to link the health status of the members and a fair payment level for the plans. The plans identify for the risk filing process the diagnosis levels for the members and their payment levels as plans are directly affected by the risk levels they report for their members.
People have had some concern about whether some parts of that coding process have been done badly, incorrectly or with purely avaricious intent.
There have been significant levels of concern expressed about whether the plans might be able and willing to produce and present inaccurate and distorted information in the process. That alarm was triggered in part by the fact that some of the plans made getting that information into their annual filings a high priority and some were more successful than others in that process.
It is good to have accurate diagnosis information.
We actually should as a nation and a health care macro system want to see an expansion of our data base and our medical records on basic levels of diagnostic information.
As a nation and as a macro care system we should definitely want to have full diagnosis information for each patient. Care can be better when caregivers have the right diagnosis for all of their patients.
How CMS has changed Risk Adjustment
CMS just did a brilliant thing and completely eliminated the filing system and process for risk coding and data.
The CMS Hierarchical Conditions Categories Risk Adjustment Model was just killed. CMS just took the system that has created the vast majority of concerns and churn about the issues of coding intensity and shut it down.
It no longer is a factor for any risk scores. CMS will still look at the relative risk levels of patients but will get that information completely from patient encounter filings and direct patient information and not from any plan filings or reports.
An entire industry of organizations working to enhance risk scores just became obsolete and irrelevant.Continue reading…