Threat Adjustment and Incentives for Upcoding in Medicare – Healthcare Economist

To account for variations in illness burden throughout a Medicare Benefit (MA) plans affected person inhabitants, makes use of threat adjustment primarily based on affected person illness burden. Particularly, MedPAC notes that:

Medicare makes use of beneficiaries’ traits, comparable to age and prior well being situations, and a risk-adjustment mannequin—the CMS hierarchical situation classes (CMS– HCCs)—to develop a measure of their anticipated relative threat for coated Medicare spending.

In February 2023, CMS CMS printed a discover of proposed rulemaking to replace their HCC threat adjustment algorithm (v28). These modifications included (i) leveraging ICD-10 fairly than ICD-9 codes as the first constructing blocks, (ii) use of 115 HCC indicators fairly than 79, and (iii) constraining some coefficients to be similar throughout severity ranges (e.g., diabetes, coronary heart failure). The brand new algorithm might be phased in throughout 2024–2026.

One key query is whether or not suppliers beneath conventional Medicare (TM) code in another way than Medicare Benefit (MA) plans. As a result of MA plan cost from CMS relies on affected person severity, there’s an incentive to up-code diagnoses. A paper by Carlin et al. (2024) goals to judge whether or not or not this happens. They first clarify the mechanism via which MA plans may extra totally seize affected person secondary diagnoses:

MA plans have a possibility to evaluate medical data to make sure that suppliers didn’t unintentionally omit a analysis from encounter data. These evaluations are extra essential when the suppliers’ reimbursement doesn’t incent detailed coding of the sufferers’ secondary diagnoses. MA plans to make corrections so as to add or (not often) delete a analysis via CR data. As well as, each MA and TM suppliers might document extra diagnoses via a HRA [health risk assessment] throughout a wellness go to or a house go to for this goal.

The authors use 2019 CMS claims information and divide the info into 3 cohorts: MA plans, TM beneficiaries attributed to ACOs (“TM ACO”), and TM beneficiaries not attributed to an ACO (“TM non-ACO”). ACO contains sufferers attributable to accountable care organizations (ACO), comparable to these collaborating within the Medicare Shared Financial savings Program (MSSP). The authors be aware that the TM non-ACO cohort serves as a key comparability since they don’t seem to be topic to the identical coding depth incentives skilled by MA plans and TM ACOs (since ACO shared financial savings is also threat adjusted).

The authors determine sufferers who had a HRA primarily based on whether or not they had an annual wellness go to, preliminary preventive bodily examination, or chosen residence well being visits (following the Reid et al. 2020 algorithm). The authors additionally use data from encounter claims on whether or not a affected person chart evaluate befell. Utilizing these information, the authors propensity-score matched the MA, TM ACO, and TM non-ACO cohorts. The authors then evaluate the matched and unmatched HCC scores and evaluated how the HRA and CR visits impacted the HCC threat scores. They discover:

Incremental well being threat resulting from diagnoses in HRA data elevated throughout protection cohorts in step with incentives to maximise threat scores:+0.9% for TM non-ACO,+1.2% for TM ACO, and+3.6% for MA. Together with HRA and CR data, the MA threat scores elevated by 9.8% within the matched cohort.

Analysis codes associated to vascular situations, congestive coronary heart failure, and diabetes had the biggest contribution to common HCC rating throughout all 3 cohorts. Vascular, pscyh, and congestive coronary heart failure had been more than likely to extend resulting from HRA/CR coding depth actions.

Whereas different papers have claimed Medicare Benefit have upcoded diagnoses for extra favorable reimbursement, this paper clearly specifies not solely the magnitude of the influence, but additionally the mechanism via which it’s more than likely to happen. You’ll be able to learn the complete paper right here.