ABy early 2023, approximately 2.5 million Americans age 65 and older have started using Medicare Advantage programs. Some have made this choice in response to aggressive marketing campaigns. This brings the total number of enrollments in Medicare Advantage plans to nearly 31 million.
An unexpected “benefit” of these plans is an offer from the insurance company sponsoring the plan to send a nurse or medical assistant, often from a start-up company, to an individual’s home. The visit is free and the insurance company may even pay the beneficiary to agree to do so. Some companies call relentlessly to have the offer accepted.
Before explaining who these visits are for, it is useful to sort out the roles of the actors. Health insurance companies do not provide health care. This is what providers and medical groups do. The primary role of insurance companies is to pay the bills; they profit by receiving more money from recipients than they pay for the medical care they need. Admittedly, this distinction is becoming blurred: some health insurers have purchased medical provider groups, and some health systems are offering health insurance.
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When an individual enrolls in Medicare Advantage, which they obtain through a private insurance company instead of the federal government, Medicare no longer pays providers directly for their services. Instead, it pays a fixed fee to the insurance company, which sets its own rules for how much and when to pay providers.
Here’s the catch: The amount the insurer collects from Medicare is based on risk score codes. The more diagnoses individuals have, the higher their risk scores, and the higher the risk score, the more the insurance company collects from Medicare.
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In theory, that sounds reasonable. In fact, some Medicare Advantage insurers assign diagnoses and risk codes that generate higher premiums whether those diagnoses actually affect an individual’s health or are being treated for the disease. This is where free home medical examinations come in. Even though Medicare already offers those it covers, comprehensive annual wellness visits with their primary care providers, some Medicare Advantage insurers are pushing home visits to find additional risk codes that allow them to secure more flat fees. Medicare highs. This is called overcoding. Even though traditional Medicare beneficiaries are often sicker than Medicare Advantage beneficiaries, the use of custom software, specially trained professionals and business consultants has created an entire industry dedicated to playing the system.
Rewards for upcoding are not insignificant. A company might be paid around $6,700 for an elderly man with uncomplicated diabetes. But adding a unique code for vascular disease — which may or may not influence treatment decisions by the individual’s healthcare provider — can increase what Medicare pays the insurance company by 45 percent. . And because only 5% of Medicare Advantage insurers are audited each year, companies often get away with overcoding.
Medical provider groups can also use upcoding to increase benefits, usually on people insured by their own Medicare Advantage plans. Richard Kronick, the former director of the federal Agency for Health Care Research and Quality, estimated that coding will increase Medicare spending by about $20 billion a year over the next decade. To put that into perspective, this surcharge could fully support current federal spending on biomedical research on cancer, heart disease, Alzheimer’s disease, diabetes, mental health, and childhood illnesses.
How can insurers’ profits be redirected from what Richard Gilfillan and Donald Berwick, former leaders of the Centers for Medicare and Medicaid Services, called a “slot machine” to meet the health needs of Medicare beneficiaries.
First on the list is to develop a scorecard that measures what really matters to people: maintaining functional abilities and quality of life. Many quality measures currently used to evaluate health insurers simply reflect what health care providers do, such as ordering blood tests at regular intervals, rather than determining whether the benefits of the care provided result in a longer life or better, fewer medical errors or fewer preventable deaths. This is the essence of value-based care: remunerating healthcare providers based on the outcomes of the patients they serve, not just what they do to their patients.
Due to Medicare Advantage coding abuses, new measures must also be designed with anti-gambling provisions. Instead of rewarding insurers for adding premium increase codes to medical records, codes should only be counted if providers actively manage these conditions. To combat gambling systems, Medicare will soon release a new audit policy that will identify when insurance companies use risk adjustment inappropriately. The audits could force companies to repay tens of millions of dollars. But the industry is ready to fight back, as STAT reported, perhaps by suing the Biden administration to block the audits.
When health insurance benefits grow unchecked, less money is available for other social needs, such as food, housing, education, and clean energy, to name a few- one. Health care in the United States is the largest sector of the largest economy in the history of the world. Unjustifiable overcoding inflates costs without helping patients. This beast must be tamed. Ending it helps us all.
Robert M. Kaplan is a faculty member of Stanford University’s Center for Clinical Excellence Research, former associate director of the National Institutes of Health, and former chief scientific officer of the Agency for Health Care Research and Quality. health. Paul Tang is a primary care internist, faculty member at Stanford’s Center for Clinical Excellence Research, and former director of medical informatics.
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