JustCare

Tag: Capitated payment

  • McKinsey weighs in on how Medicare Advantage plans can maximize profits

    McKinsey weighs in on how Medicare Advantage plans can maximize profits

    In a new report, McKinsey offers insurers advice on how Medicare Advantage plans can maximize profits. McKinsey focuses on “star” power, keeping Medicare Advantage star ratings at four or higher, and paying more hospitals and physicians fixed rates rather than for each service performed. Make no mistake, this advice will help insurers, not Medicare Advantage enrollees.

    The star-ratings in Medicare Advantage remain a farce for several reasons. Most important, the star-ratings do not capture high denial rates or high mortality rates, two indicia of poor performance and high risk for anyone joining a Medicare Advantage plan. The stars also do not capture basic metrics, such as network adequacy at the Medicare Advantage plan level, but only at the MA insurer contract level, which includes multiple plans. Consequently, a network could look very good at the contract level and deliver a high score to some Medicare Advantage plans, which have poor networks.

    It’s easy for Medicare Advantage insurers to game the star-rating system. And, so long as they get a four or five-star rating, they get additional money from the federal government.

    When insurers pay their network providers a fixed capitated rate rather than fee-for-service, as McKinsey recommends, it can lead to poor care for enrollees. Physicians have a powerful incentive to reject patients with complex conditions, because they cost the physicians too much money. Physicians also have a powerful incentive to not refer patients to costly specialists, because that too can cost them money.

    We still have little clue of the health outcomes for people in Medicare Advantage plans who have complex and costly conditions; the data we do have is troubling. The data show higher disenrollment rates from Medicare Advantage and widespread inappropriate delays and denials of care.

    McKinsey, health insurers, and many others use the Orwellian term “value-based” care to describe the capitated payment system. But, value is made up of quality and costs. And, Medicare Advantage plans have never shared the complete, accurate and timely data that would allow outside independent experts to assess their quality. Moreover, we know that Medicare Advantage plans’ costs to the Medicare program are significantly higher than Traditional Medicare’s.

    Based on the overall quality unknowns of Medicare Advantage, the available data that too often shows delays and denials of care and its high cost, you could say that Medicare Advantage value-less care. Don’t tell us about your performance, Medicare Advantage plans, don’t hide your data, show us what you do, and outside independent experts will report on your performance.

    Here’s more from Just Care:

  • Why health insurers deny necessary care and get away with it

    Why health insurers deny necessary care and get away with it

    If you’re wondering why insurance companies deny necessary care and get away with it, it’s not only that the insurers are pulling all the strings and have become too big to fail. It’s that different doctors often have different opinions about what is medically necessary. A new report from the Center for Improving Value in Health Care focuses on the health care that people get that the Center says is not medically necessary, driving up health care spending, reports Markian Hawryluk for KFF Health News.

    The amount spent on unnecessary care or “low value” care in Colorado, as reported–$134 million in 2022–seems relatively small. The Center says it is the tip of the iceberg. But who is to judge what is low-value care? The health insurance companies should not be the judge when they profit from denying care.

    There is tremendous risk in turning authority over treatment decisions from physicians to insurance companies, as Medicare has done through the Medicare Advantage program. Where is the value in handing buckets of money to health insurance corporations who can deny coverage for low, medium and high value care without justification, in secret, largely with impunity, in order to maximize profits?

    And, we continue to hear horror stories of the health insurers denying needed care through AI algorithms and staff physicians who earn bonuses when they don’t refer patients for costly specialty care. Why would we trust the insurance companies and their staff to get coverage decisions right when they have no understanding of particular patient conditions and an incentive to deny care? Read this post on how UnitedHealth is using AI to deny rehab care to vulnerable older adults without regard to their particular conditions and weep.

    Of course, there is no perfect payment system. The Center for Improving Value in Health Care appears to like the idea of giving insurers buckets of money to cover care. But, rather than giving insurers the discretion over these treatments, isn’t the fix to have national policies, publicly vetted, about what is covered and not covered? If opiates, antipsychotics and screenings for Vitamin D deficiency are really unnecessary in most cases, why are insurers covering them?

    A capitated payment system–one in which the insurers are handed money upfront to “manage” care–simply changes the incentives, disregarding physician opinions, working against patients, and rewarding insurance companies for giving less care or for denying care inappropriately. And, corporate health insurers operate in a proprietary or secret system. Researchers can’t even learn whether what insurers are doing when they deny care is endangering people’s lives or helping them. How does that add value?

    What’s crystal clear is that if we are going to improve the health care system, we need to collect and review patient data. We need to know what is working and not working. We need to know in real-time what’s happening to protect people from insurance companies that put their profits first. And, we need to be doing what other wealthy nations do: Dictating all the terms of coverage, removing discretion over coverage decisions from insurance companies, so that people can count on getting the care they need without delay and are not forced to gamble with their health.

    Here’s more from Just Care:

  • Comment to CMS on its proposed changes to the way it calculates Medicare Advantage payments in 2024

    Comment to CMS on its proposed changes to the way it calculates Medicare Advantage payments in 2024

    CMS’ planned changes in the Medicare Advantage (MA) capitation rate methodology and risk adjustment methodology, which will lead to a projected payment rate increase of around one percent in 2024, are an important step towards eliminating waste, maintaining the integrity of the Medicare Trust Fund, and keeping Medicare Part B premiums in check for everyone with Medicare. The planned changes are meaningful improvements that take account of, and rein in, some of the tens of billions of dollars in excess payments to Medicare Advantage plans as a result of upcoding in recent years and going forward.

    Social Security Works, Just Care USA, Public Citizen and the Center for Health and Democracy strongly support these planned changes, which will improve the accuracy of payments to Medicare Advantage plans. We urge you to finalize them.

    The planned improvements address some issues with the current flawed system for capturing the health risk of enrollees in order to reduce the excess payments to Medicare Advantage plans. They fix some of the upcoding that leads to additional payments to Medicare Advantage plans, even when the Medicare Advantage plans are not spending more money on patient care.

    While the projected rate increase is lower than what the insurance industry wants, it should not compromise benefits or result in increased costs for Medicare Advantage enrollees. The government will continue paying Medicare Advantage plans significantly more per enrollee than Traditional Medicare. Medicare Advantage plans will continue to amass billions of dollars in profits.

    Unfortunately, CMS’ authority to correct for massive Medicare Advantage excess payments is circumscribed. CMS is bound to adhere to the current risk-adjusted capitated payment model for Medicare Advantage plans. This model entrusts the Medicare Advantage plans themselves with determining the health risk of their members and pays the Medicare Advantage plans more for enrollees with more diagnosis codes.

    This risk-adjustment method rewards Medicare Advantage plans best able to capture enrollees’ diagnosis codes, regardless of whether the Medicare Advantage plans spend more money covering care for their enrollees with additional diagnosis codes. It creates a perverse incentive for Medicare Advantage plans to do everything in their power to “find” diagnosis codes to ascribe to their enrollees—“upcode”—in order to maximize profits. And, it makes Medicare Advantage plans that do not have the tools or resources to add as many diagnosis codes as possible to their enrollees’ records less competitive than those Medicare Advantage plans that do.

    Some Medicare Advantage plans hire outside firms to conduct home visits of enrollees with the specific purpose of ascribing new diagnosis codes to their medical records. These Medicare Advantage plans might also pay in-network primary care providers more for assigning more diagnosis codes to their patient records.

    According to MedPAC, these activities led to far higher per enrollee payments (106 percent) in Medicare Advantage than in Traditional Medicare, at a total cost to taxpayers of $27 billion this year alone. According to other analysts who have taken a deep dive into risk-adjustment in Medicare Advantage, the excess payments are closer to 120 percent of Medicare, well over $80 billion this year. These excess payments are projected to total $600 billion over the next eight years. The CMS proposed formula for its 2024 rate increase would eliminate or change some codes to better reflect the additional risk some Medicare Advantage plans bear.

    Ultimately, to stop the upcoding, the federal government must wrest responsibility for risk-adjustment from the Medicare Advantage plans. CMS can conduct risk-adjustment itself. Better still, since risk-adjustment is an imperfect payment system that will always overpay for the healthy and underpay for the sick, creating perverse incentives, the government should revise its capitated payment model to better align with the goals of Medicare Advantage—lower costs to Medicare and better quality. Only the latter option helps ensure Medicare Advantage enrollees can get the care they need.

    If the government paid Medicare Advantage plans for the cost of services they delivered, plus a management fee, with a risk-adjusted limit that the government set, the Medicare Advantage plans would have a greater incentive to deliver high-value care to people with costly conditions and have far less opportunity to game the payment system. The current payment system, and any new payment model unrelated to the cost of services Medicare Advantage plans deliver, suffers from three fundamental flaws that affect enrollee care at both the individual and macro levels:

    First, it incentivizes some, if not most, Medicare Advantage plans to compete for healthy enrollees, as they cost very little to cover. In fact, healthy enrollees cost about one-tenth of what the government pays the Medicare Advantage plans to cover services for these enrollees. Further, insurers design Medicare Advantage plans with lower cost and sometimes lower quality specialists and specialty providers to avoid the sickest patients. The sickest patients cost many times what the government pays the Medicare Advantage plans for these enrollees. In theory, the payments for healthy and sick would balance out. But, in practice, covering all medically necessary care for a disproportionate share of the sickest enrollees would put the Medicare Advantage plans out of business.

    Second, a payment system unrelated to the cost of services delivered incentivizes some, if not most, Medicare Advantage plans to withhold care and provider payments, particularly for the 10 percent of people who represent 70 percent of Medicare spending. Unfortunately, this is easy for Medicare Advantage plans to do. The bad-actor Medicare Advantage plans use their own proprietary prior authorization rules that are out of sync with standard medical practice and pay their physicians to deem medically necessary treatment unnecessary, even when these physicians lack the qualifications to make the decision. CMS cannot oversee Medicare Advantage plans’ medical necessity decisions at a micro level. And, CMS cannot keep Medicare Advantage plans from inappropriately cutting payments to physicians and hospitals. By giving Medicare Advantage plans this discretion over coverage and payments, including those Medicare Advantage plans that are bad actors, the government endangers the lives of the millions of enrollees with complex and costly conditions and puts the financial stability of some providers at serious risk.

    Third, the current risk-adjusted payment system incentivizes some, if not many, Medicare Advantage plans to ignore good care management. Good care management would involve collection of complete and accurate encounter data to determine what’s working and what’s not working and a reporting out so that there is continuous learning that benefits everyone. What’s worse is that this payment system has kept the government and researchers from being able to analyze patient encounter data to determine which plans are providing good care and which are withholding critical care. As a consequence, millions of people are misled into joining Medicare Advantage plans that might not meet their care needs.

    The current payment system also permits Medicare Advantage plans to claim they spend 85 percent of their revenues on patient care and “quality” initiatives, as required by law, without meaningful assurance that they do.

    In an ideal world, CMS would have the tools, resources and political will to identify and hold Medicare Advantage plans accountable for their bad acts in meaningful ways that would actually deter them from committing bad acts. That is fantasy, as the current design of Medicare Advantage makes good oversight and accountability effectively impossible, even if CMS had adequate staff and other resources. For now, without fundamental design changes, we are left with a Medicare Advantage system that has no proven value, hundreds of billions in excess costs, and no way to ensure enrollees who need costly care actually receive it.

    No one should want the government to overpay for Medicare services, especially when there is no good data to support their value. No one should want vulnerable older adults and people with disabilities to enroll in Medicare Advantage plans that won’t meet their needs when they need care.

    If Medicare Advantage is to “work” for taxpayers and enrollees:

    • We need an appropriate limit on Medicare Advantage plan revenue, equal to or less than Traditional Medicare per enrollee.
    • We need a standardized claims processing system for all Medicare Advantage plans that ensures coverage of medically reasonable and necessary services, with a public—non-proprietary— prior authorization overlay.
    • We need Medicare Advantage plans to have a financial incentive to provide high-value care to people with costly conditions and to compete for these enrollees.
    • We need Medicare Advantage plans to cover care from all cancer centers of excellence and other Medicare providers to ensure people have good access to care.
    • We need a standardized system for the government to collect and share de-identified patient encounter data so that “value” can be assessed, and we can have in place a robust system for identifying persisting and emerging health care needs, including the ability to detect a disease outbreak or the need for greater resources in a community as a result of a force majeure.
    • We need a “strict liability” punishment for Medicare Advantage plans that violate their legal and contractual obligations, including automatic plan termination for ongoing violators.

    In sum, CMS’ planned improvements in the MA capitation rate methodology and risk adjustment methodology, which will lead to a projected payment rate increase of 1 percent in 2024, will help reduce excess payments to Medicare Advantage plans. However, without further improvements, they will not bring Medicare Advantage plans in line with Traditional Medicare. Medicare Advantage plans still will be able to upcode improperly and devise ways to stint on enrollee care in order to earn windfall profits.

  • New government rule lets Medicare Advantage pocket tens of millions of taxpayer dollars they did not earn

    New government rule lets Medicare Advantage pocket tens of millions of taxpayer dollars they did not earn

    For years, the federal government has been overpaying Medicare Advantage plans tens of millions of dollars for wrongful or fraudulent diagnosis codes without  trying to recoup almost any of that money. A new government rule designed to “improve program integrity and payment accuracy” in Medicare Advantage allows these corporate health plans to keep all but a tiny fraction of that money. What’s worse is that the rule continues a defective payment system that allows hundreds of billions in overpayments resulting from “upcoding”–a practice that allows Medicare Advantage plans to add diagnoses codes to patient records regardless of whether they provide services to treat the conditions associated with the codes–to grow.

    As a result of the rule, CMS plans to recoup just $4.7 billion in overpayments from fraudulent or erroneous Medicare Advantage billing beginning in 2018. Publicly, the Medicare Advantage plans are balking, but I bet that they are laughing all the way to the bank. CMS has opted not to collect these improper overpayments from the seven years prior to 2018, is still completing audits to calculate overpayments from 2014 and 2015, and will not try to collect any overpayments until after it completes its 2018 audit some time down the road. Almost certainly, CMS will need to fight the insurers in court to claw back the overpayments. Moreover, CMS has done nothing to address the estimated $124 billion in additional Medicare Advantage overpayments from what is likely permissible upcoding.

    Fred Schulte reports for Kaiser Health News that the Medicare Advantage plans are not likely to feel the effect of this new government rule. That’s an understatement. Here’s a priceless quote from Dara Corrigan, director of the CMS’s Center for Program Integrity. “The recoveries that we’ll make are less than one-fifth of 1% of the amounts paid to Medicare Advantage plans,”

    Officially, Medicare Advantage plans can keep virtually all overpayments based on wrongful diagnosis codes between 2011 and 2017. Unofficially, they can keep all overpayments of this nature for the foreseeable future. CMS has not even completed audits of Medicare Advantage plans from 2011.

    Plain and simple, CMS does not have resources to conduct timely audits of Medicare Advantage plans or the tools to ensure that tens of millions of dollars in overpayments are returned to Medicare coffers expeditiously. If you ask me, that’s reason enough to terminate Medicare Advantage. Even if CMS eventually attempts to collect the overpayments Medicare Advantage plans have received as of 2018, the insurers have said they will contest this clawback in court.

    A CMS Deputy Administrator says the rule is a “commonsense approach to oversight,” without claiming to know the amount of excess payments the Medicare Advantage plans will keep. If this is commonsense oversight, Congress should protect the integrity of the Medicare Trust Fund and end Medicare Advantage. Health and Human Services Secretary Becerra appears to recognize that this is not meaningful accountability, saying merely that it is a “move” in that direction.

    It is beyond comprehension that an additional hundreds of billions in Medicare Advantage overpayments appear to be baked into the Medicare Advantage program, as MedPAC has reported. And, CMS does not appear to be doing anything about it.

    It could not be clearer that the government’s capitated payment system for Medicare Advantage leads to billions of dollars in overpayments and no ability to recoup the money. Congress must change the way Medicare Advantage plans are paid or end the program entirely. Medicare’s sustainability is on the line.

    Here’s more from Just Care:

  • Government asks public how to improve Medicare Advantage

    Government asks public how to improve Medicare Advantage

    Amidst a slew of government and other expert reports decrying Medicare Advantage for costing more and offering no better quality than traditional Medicare, as well as for engaging in widespread inappropriate delays and denials of care, the Centers for Medicare and Medicaid Services, which overs Medicare, is asking the public how to improve Medicare Advantage. Just Care, Social Security Works and Public Citizen are all working on responses, and we’d love your input. If you have a comment to share, please post it in the comments section of this post.

    It might be the case that Medicare Advantage is not fixable. Its problems are rooted in the way Medicare Advantage plans are paid–a fixed upfront payment based on the MA plans’ assessment of the health of its enrollees, unrelated to the amount Medicare Advantage plans spend on care–and run too deep to be fixed. But, if Congress were willing to overhaul the payment system and standardize coverage policies, including prior authorization policies, Medicare Advantage would improve significantly. The fixes are:

    • Create a financial incentive for MA plans to deliver high-value care to people with complex and costly conditions: The government should pay MA plans so that they are not penalized financially if they cover care for a disproportionate number of people with costly and complex conditions. Right now, the government’s capitated payment system means that if MA plans attract too many people with cancer or another expensive condition and provide them with needed care, they could lose a lot of money. Put differently, they can maximize profits by enrolling a disproportionate number of people in good health and delaying and denying care for people in poor health. That’s why they rarely contract with centers of excellence for high-cost care and never advertise or promote programs for people with costly conditions.
    • Make MA cost-effective: The government should significantly limit the amount of profit MA plans can generate. Right now, they technically must spend at least 85 percent of the money they receive on medical services. However, they can game the system in ways that permit them to spend less and profit more. The government should pay them an administrative fee to coordinate care, cover the cost of all services delivered, and put them on a global budget. MA currently costs taxpayers and the Trust Fund way more than traditional Medicare, as a result of the risk-adjusted capitated payment system. That system allows plans to “upcode,” charging more for some patients than appropriate, and delay and deny care inappropriately. They can pocket much of the money they save, profiting from not covering people’s needed care.
    • Identify the MA bad actors and hold them accountable for their bad acts: The government should disclose publicly the Medicare Advantage plans engaged in high rates of inappropriate delays and denials of care so people can make a meaningful choice to join them, and, to save lives and promote good health. It should cancel contracts with those plans if they don’t correct their ways. Meaningful penalties for contract violations are critical. Similarly, the government should end star-ratings for all MA plans that fail to provide complete and accurate patient encounter data, as required by law, which is needed to assess quality of care. To date, the agency charged with assessing quality in MA has been unable to do so because it lacks the data. The government should not allow these MA plans to participate in the Quality Bonus Program. And, it should cancel its contracts with those that do not correct their ways and turn over accurate and complete data, to save lives and promote good health.
    • Offer a supplemental policy to people in MA that picks up all out-of-pocket costs: Right now, too many enrollees are skipping care because they cannot afford the deductibles and copays. A supplemental policy would allow people to better budget for their care. Out-of-pocket costs jeopardize the health and well-being of enrollees, with particularly poor outcomes for Latinx and BIPOC communities. In addition, out-of-pocket costs present a large barrier to care for people with low incomes.

    Other reforms also are needed to strengthen Medicare and improve care for older adults and people with disabilities, including ensuring MA plan networks are adequate or eliminating them altogether and ensuring their marketing practices are not misleading or, worse still, fraudulent. And, Congress needs to level the playing field between traditional Medicare and Medicare Advantage to ensure traditional Medicare remains a meaningful option.

    Here’s more from Just Care:
  • No data, no value in fixed upfront payments for care

    No data, no value in fixed upfront payments for care

    Kay Tillow writes for Counterpunch about the array of health industry leaders who support paying insurers and providers upfront for care, without regard to the cost of services delivered. Using a term that would make George Orwell proud, they promote “value-based care,” even though they have no evidence of value.  With higher costs and without quality data, you cannot assume there’s any value in fixed upfront payments, “capitated” payments, for care.

    Tillow hits the nail on the head. Upfront fixed payments for care appears to be fostering worse health outcomes, higher costs, and greater health inequities. Putting the bad actors aside, in an upfront payment system with no good way to measure value–there’s little meaningful data–even the best actors need to avoid treating a disproportionately high number of patients with costly needs because they will lose money. Providers can avoid that predicament by designing their practices in a way that avoids patients with complex conditions or delays their care, which is easy enough to do.

    Put differently, a payment system that requires physicians to share the risk of treating too many patients with complex conditions and losing money puts patients with complex conditions at risk. If physicians aren’t paid enough to cover the cost of treating too many costly patients, what will they do? Their incentive is to deliver as little care as possible to maximize their incomes.

    If private equity firms or corporate health insurers are receiving the capitated payments, the pressure is even greater to withhold as much care as possible. They also need to come out ahead financially. Anyone who thinks you can deliver value without measuring quality and handing a corporation a bunch of money upfront unrelated to the amount they spend on care is in lalaland. They have no evidence for their beliefs, just baseless claims.

    The Medicare Payment Advisory Commission has said over and over and over again for the last decade that it doesn’t have the complete and accurate data it needs to assess value in Medicare Advantage plans, corporate health plans paid a flat upfront payment by the government to deliver Medicare benefits. No data, no value. To make matters worse, the HHS Office of the Inspector General has reported that these “value-based” corporate Medicare Advantage plans are engaged in widespread and persistent inappropriate delays and denials of care and coverage.

    The Centers for Medicare and Medicaid Services (CMS), which oversees Medicare, does not and cannot measure quality in Medicare Advantage plans in a meaningful way. Consumer satisfaction studies and hospital readmission rates are hardly a guarantee of good care quality. To add insult to injury, CMS won’t even call out the bad Medicare Advantage actors. Instead, it gives some of them four and five star ratings and a financial slap on the wrist.

    Here’s more from Just Care:

  • Congress must overhaul the way it pays Medicare Advantage plans

    Congress must overhaul the way it pays Medicare Advantage plans

    For years, government and independent analysts have shown that the Centers for Medicare and Medicaid Services (CMS) is overpaying Medicare Advantage (MA) plans–the corporate health plans that cover Medicare benefits–billions of dollars each year. The government’s payment model increases the amount it pays MA plans when they add diagnoses codes to a patient’s profile, regardless of whether they provide more services to the patient. Christopher Rowland reports on incidents of fraudulent billing in Medicare Advantage for the Washington Post.

    The problem with “risk-adjusted” capitated payments–fixed monthly payments based on the diagnoses codes in a patient’s chart–is that they incentivize insurers to add irrelevant or even inappropriate diagnoses codes to a patient’s profile in order to get paid more, driving up Medicare spending. In an ideal world, there would be the ability to monitor the problems and correct the overpayments. But, CMS does not begin to have the resources to do so.

    Kathy Ormsby worked for  the Palo Alto Medical Foundation, a subsidiary of Sutter Health in California, which was looking at patients’ health histories as a way to get doctors to add diagnoses codes to their records. Sutter dismissed Ormsby’s concerns about upcoding. Ormsby found a lot of mistakes, and Sutter had no interest in refunding the government. Medicare Advantage plans appear focused on a ‘dash for cash,” first and foremost.

    Ormsby filed a whistleblower lawsuit against Sutter Health because its practice of adding diagnosis codes. The upcoding was not designed to improve patient care, but rather to increase payments for that patient.

    Sutter health ended up paying $90 million to the government to settle the lawsuit filed by Ormsby last August. It was a clear case since Ormsby found that nine in ten cancer and stroke diagnoses were false. More than six in ten fracture diagnoses were also false.

    Sutter is hardly the only bad actor. Abusive billing practices appear to have become the norm in Medicare Advantage. Many Medicare Advantage plans see no reason not to give patients as many diagnoses as possible in order to increase their revenues. The government does not pay Medicare Advantage plans, or even adjust payments, based on the cost of services they deliver. Medicare Advantage plan incentives are perverse thanks to this payment model, and the proof is in the pudding,

    The Justice Department has filed lawsuits against several Medicare Advantage companies for fraudulent billing. Rowland writes: “Justice Department whistleblower allegations and similar lawsuits also are playing out in federal courts against UnitedHealth Group, Cigna and Anthem. The government’s Office of Inspector General has audited Humana and found it overbilled the government. United Healthcare, which is under the umbrella of UnitedHealth Group, and Kaiser Permanente denied any improper conduct. Cigna, Anthem and Humana did not respond to requests for comment.”

    Richard Kronick, a health economist, projects that if not stopped, overpayments to Medicare Advantage will amount to more than $600 billion in the next nine years. Putting aside the propriety of Medicare Advantage plan behavior to generate more revenue, what’s clear is that the risk-adjusted capitated payment system is fraught, leaving insurers holding the bag if they attract too many cancer and stroke patients and profiting wildly if they have disproportionate numbers of people who are relatively healthy.

    The problem in a nutshell: The government pays Medicare Advantage plans way too much for people who use relatively little care and too little for people who need a lot of care. That payment model needs overhauling. Like large employers, the government should pay health plans a management fee for coordinating care, on top of the cost of covering medically necessary services for their enrollees. Medicare Advantage plans should not profit more the less care they provide.

    Rowland spoke with a number of doctors who all confirmed that Medicare Advantage plans are mining data to add codes to patient records. They are expected to add these codes and pressured in various ways to do so.

    Kaiser Permanente was giving so many of its patients diagnoses for  aortic atherosclerosis that it was overloading its cardiovascular disease management program. Instead of eliminating the diagnosis code and losing revenue, it stopped referring all of these patients to the cardiovascular disease program. Pressure was on to include that diagnosis in patient medical records because it generated an extra $40 million a year for one physician group.

    The HHS Office of the Inspector General has issued reports on the cost of upcoding. Donald Berwick and Richard Gilfillan, the former heads of CMS and the Centers for Medicare and Medicaid Innovation, respectively, just published an article in Health Affairs in which they take the available evidence to show that Medicare Advantage not only costs a lot more than traditional Medicare, but it delivers care of questionable quality and promotes health inequities. (Here’s the Just Care post I wrote on topic.)

    Berwick and Gilfillan dismiss patient satisfaction with Medicare Advantage as a table rabbit. People choose it to save money, as the upfront costs of Medicare Advantage are less than traditional Medicare; But, out-of-pocket costs in Medicare Advantage are generally much higher than traditional Medicare with supplemental insurance for people with costly health care needs.

    Here’s more from Just Care: