New Dartmouth study offers roadmap for better risk adjustment in Medicare

The methodology Medicare uses to adjust the billions of dollars it pays health plans and hospitals to account for how sick their patients are is flawed and should be replaced, according to a new study by Dartmouth investigators published in the journal BMJ that weighed the performance of Medicare's methodology against alternatives.

The researchers from the Dartmouth Atlas Project compared Medicare's current risk-adjustment methodology, which is based on the diagnoses recorded in patients' claims records, against adjustment indices based on wealth and health. The study found that using indices pegged to a region's poverty rate or the overall health of its population do a better job of explaining the mortality rate of local Medicare populations than the current diagnosis-based adjustment method, raising questions about its efficacy.

The study is the fourth in a series to raise important questions about how the government accounts for differences in the severity of illness in populations so it can make "apples to apples" comparisons that do not to penalize plans or health systems whose patients are sicker than average. This risk adjustment is a critical factor in how Medicare evaluates hospitals' readmission rates, which affects their Medicare payments, and how it pays Medicare Advantage health plans. Diagnosis-based risk adjustment is also used in comparative effectiveness research and in academic research into variations in medical care across America.

Medicare payments to Medicare Advantage plans are projected to surpass $154 billion in 2014, and account for more than a fourth of total Medicare spending, according to the Congressional Budget Office. Medicare Advantage plans use the CMS - Hierarchical Condition Category (HCC) risk adjustment methodology to adjust their payments to health plans. HCC risk adjustment, based on the diagnoses recorded in claims, is so important to Medicare Advantage plans' revenue streams that a cottage industry has sprung up to help plans maximize their risk-adjustment revenue.

"We can and should do better," said David E. Wennberg, M.D., M.P.H. "Our body of work demonstrates that the way we adjust for risk now is biased, and when billions of tax dollars are at stake we need to hit the reset button. This paper gives a very good roadmap of how we can do risk adjustment right."

Three previous studies found significant regional variations in diagnosis patterns. In regions where Medicare patients see doctors more often or get more tests, one study found patients accumulate more diagnoses, even though the increased, accumulated diagnoses did not track with mortality rates, raising questions about the accuracy of a diagnosis-based risk adjustment method. This "observational intensity" suggested diagnosis is not solely an attribute of underlying disease burden, but could also reflect how often patients encounter the health care system.

This new study compared the current Medicare risk-adjustment methodology with three 

alternatives to see which better explain differences in the actual mortality of a population. It drew on the 2007 claims of more than 5 million Medicare beneficiaries in 306 U.S. regions. The first adjusted the current Medicare method to discount diagnoses for the region's observational intensity. The second was based solely on the percentage of a region's 65-plus population below the federal poverty level. The third was a population health index based on five factors: annual rates for hip fractures andstrokes, obesity, smoking status and surveys of self-reported illness. Each alternative performed better at predicting regional mortality than the current Medicare diagnosis-based method. The population health index was able to explain over 60% of the variation in regional mortality rates, while the HCC index explained less than 5%.

The article concludes that the federal government should expand its plans for national surveys to assess patients' experience with health care providers to include patient-level population health measures that can be used for risk adjustment as well as outcomes assessment.

Medicare payments to Medicare Advantage plans are projected to surpass $154 billion in 2014, and account for more than a fourth of total Medicare spending, according to the Congressional Budget Office. Risk adjustment is so important to Medicare Advantage plans' revenue streams that a cottage industry has spring up to help plans maximize their risk-adjustment revenue.

Source: The Geisel School of Medicine at Dartmouth

http://www.news-medical.net/news/20140411/New-Dartmouth-study-offers-roadmap-for-better-risk-adjustment-in-Medicare.aspx

International professors discuss healthcare concerns

By JULIA LISS, Daily Staff Reporter
Published April 9, 2014

Two speakers gave a joint lecture Wednesday on international health policies at the University’s School of Public Health, drawing around 40 graduate students and faculty.

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Johan Mackenbach, professor of public health at Erasmus University Medical Center in Rotterdam, the Netherlands, spoke of the recent divergence of life expectancy in Europe and possible explanations for such a trend.

Mackenbach said the trends, which show health disparity based on national income gaps, are the result of a variety of cultural factors. Using charts, graphs and other data to help illustrate his point, Mackenbach showed that periods of democracy had historically higher life expectancies, while periods of more chaotic political climates showed dips in the life expectancies.

Mackenbach outlined 11 specific areas of focus for health policies, including tobacco control, alcohol control, child health and road traffic injury. He said countries that have more preventative health policies — contrary to most U.S. delivery models — showed fewer instances of health problems related to each area of concern.

For example, he said countries with stricter tobacco control regulations and preventative measures to discourage smoking had fewer smokers, lower cigarette sales and fewer smoking-related health issues in the population.

Mackenbach discussed possible reasons for the existing disparities. He found that many countries which could benefit from improved healthcare models often possess the means to do so, but are stymied by the political, social and cultural climate of the country.

John Frank, director of the Scottish Collaboration for Public Health Research & Policy and chair of Public Health Research & Policy at the University of Edinburgh, Scotland, delivered the second address, titled “Influencing Child Health Policies with Scientific Evidence: Lessons from 5 Years in Scotland.”

His lecture aimed to demonstrate the importance of early access to education on an individual’s health and future success. Frank said early education implementation is the single most important indicator for a child’s future.

“You can make people’s chances in life much more equal in only one really cost effective way, and that is giving universal preschool high quality education, half day a week from age two, age one in high risk families,” Frank said.

Frank proposed a plan to combat societal challenges through education, while addressing some of the concerns of implementing potential reforms.

Public Health Prof. George Kaplan acted as the moderator and he introduced both Mackenbach and Frank’s speeches and led a question and answer session after each speaker. The Institute for Healthcare Policy and Innovation, the University’s Robert Johnson Foundation Scholar’s in Health Policy Program and the Center for Social Epidemiology of Population Health sponsored the event.

http://www.michigandaily.com/news/scottish-prof-talks-healthcare-changes-challenges

Review of GP services - the patient experience

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2014
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More than half the people interviewed for a review of GP services in Luton said they could not get an appointment when they needed one, while a third had difficulty getting through to the surgery on the phone.

The review was conducted by Healthwatch Luton, supported by volunteers and local organisations.

They completed 962 patient surveys while Healthwatch staff visited and assessed all 39 doctor surgeries in the town.

The results also showed that 26 practices do not have easy access for wheelchair users and 28 do not have a hearing loop system in place.

Only four were judged to have sufficient privacy in the reception area and all but seven kept patients waiting more than 15 minutes after their appointment time.

On the plus side, a significant 88 percent said staff were helpful and understanding and 89 percent had confidence and trust in their doctor.

More than 90 percent said that, overall, they were happy with the quality of care, service and treatment they received although only 80 percent would recommend their surgery to other people.

Healthwatch Luton boss Beth Gregson said: “It shows the importance of identifying and understanding what good patient satisfaction looks like.

“We recognise the increasing pressures and demands on surgeries. However we will continue to struggle to attract quality staff if we cannot narrow the gap between the best rated and the worst.”

Healthwatch Luton manager Nisar Mohammed said: “We have identified a total of 680 recommendations across the board and many of these have already been implemented.

“We hope the results of this review will encourage local people to become actively involved in representing the patient voice within their local surgery.”

The organisation has created individual reports and recommendations for each GP surgery, together with timescales for implementation and a response from the surgery.

> For a copy of individual and overall surgery reports, call 01582 817060 or access them online at http://www.healthwatchluton.co.uk/gp-report

http://www.lutontoday.co.uk/news/health/health-news/review-of-gp-services-the-patient-experience-1-5988384

Medicare provided docs million-dollar paychecks

By Peter Whoriskey, Dan Keating and Sandhya Somashekhar
The Washington Post
© April 9, 2014

WASHINGTON

The Medicare program is the source of a small fortune for many U.S. doctors, according to a trove of government records that reveal unprecedented details about physician billing practices around the nation.

The government insurance program for older people paid nearly 4,000 physicians in excess of $1 million each in 2012, according to the new data. Those figures do not include what the doctors billed private insurance companies.

The release of the information gives the public access for the first time to the billing practices of individual doctors nationwide. Consumer groups and news outlets have pressured Medicare to release the data for years. And in doing so today, Medicare officials said they hope the data will expose fraud, inform consumers and lead to improvements in care.

The American Medical Association and other physicians groups have resisted the data release, arguing that the information violates doctor privacy and that the public may misconstrue details about individual doctors.

Among the highest billers were a cardiologist in Ocala, Fla., who took in $18.1 million, mainly putting in stents; a New Jersey pathologist who received $12.6 million performing tissue exams and other tests; and a Michigan vascular surgeon who got $10.1 million.

Some of the highest billing totals may simply reflect a physician who is extremely efficient or who has an unusually large number of Medicare patients.

The highest numbers also may reflect a physician who specializes in procedures that require costly overhead, and in those cases, a large portion of the money may wind up not with the doctor but with pharmaceutical companies or makers of medical devices.

But in some instances, the extremely high billing totals could signal fraudulent doctor behavior, as government inspectors have previously found.

Indeed, three of the top 10 earners already had drawn scrutiny from the federal government, and one of them is awaiting trial on federal fraud charges.

The greatest tallies also may signal that the Medicare payments for some procedures are too high for the amount of work involved or that perverse incentives lead doctors to overuse a procedure.

The specialties most common at the top ranks of the Medicare payments were ophthalmologists, oncologists and pathologists.

This information gives the public "unprecedented access to information about the number and type of health-care services" doctors provided during the year, Jonathan Blum, principal deputy administrator of the Centers for Medicare and Medicaid Services, said in a blog post.

The Medicare program is the nation's largest medical insurer. By virtue of its breadth, the forthcoming billing data are expected to shed light on an array of questions that have arisen about health-care costs as the nation has confronted decades of rising medical bills.

Overall, the information covers $77 billion in billing involving 880,000 practitioners in 2012.

The American Medical Association has warned that the data could contain errors, and in some cases, one doctor's billing number may have been used by multiple support personnel for billing purposes.

In addition, the billing figures reflect what a doctor receives in payment but does not show the actual profit after paying for equipment, support personnel and malpractice insurance. For some procedures, the overhead can reach three-quarters or more of the payment amount.

Many of the highest billers, for example, were in fields with unusually high expenses, and that was likely to limit their personal share of the money. Using the assumptions that Medicare and the American Medical Association make when setting payment rates, only 23 of the 4,000 biggest billers personally earned $1 million or more, according to a Washington Post analysis.

"The AMA is concerned that CMS' broad approach to releasing physician payment data will mislead the public into making inappropriate and potentially harmful treatment decisions and will result in unwarranted bias against physicians that can destroy careers," Ardis Dee Hoven, president of the American Medical Association, said in a statement. "We have witnessed these inaccuracies in the past."

But consumer and public interest groups argued that the information will help consumers make better decisions.

"This data is important because it will make it possible for consumers to identify physicians that will best meet their needs," said Robert Krughoff, president of Consumers' Checkbook, a group that began seeking the release of this information in 2005 and eventually sued for it.

For example, it will allow consumers to know which doctors are most experienced in a given operation. Studies have shown that in several types of surgery, volume matters: Surgeries by doctors who have performed the procedure enough times are less likely to end with the patient's death.

As for the potential that the information might misrepresent a physician's practice, Krughoff said, "the consumer organizations that have pushed for release of this information have a strong obligation to make sure that the information is used properly. But I believe in the marketplace of ideas."

The doctor at the top of the list of largest Medicare billers is Salomon Melgen, an ophthalmologist in West Palm Beach, Fla., who took in $20 million from Medicare in 2012, according to the data released Wednesday.

Most of Melgen's take - about $11.8 million of it - came from injecting patients' eyes with Lucentis, a drug used for macular degeneration, according to the data.

For each shot, Medicare and the patient pay a doctor about $2,000, but the drug is very expensive and the doctor must then pay most of that money to the drug's manufacturer, Genentech.

What may be most interesting about Melgen's practice, however, is that he could have used a much cheaper drug than Lucentis - one called Avastin that many opthalmologists consider an equivalent.

Had he used the cheaper alternative, his bill to Medicare for the shots would have dropped from $11.8 million to less than $500,000.

But physicians have a financial incentive to use more expensive drugs. Medicare pays a doctor more for injecting the more expensive drug - the physician's fee is based on the drug's price - and Genentech offered doctors its own incentive to use the expensive drug: The company gave discounts to those who use high volumes.

Melgen's name appeared in headlines in 2012 as result of his connection to Sen. Robert Menendez, D-N.J., a friend who received campaign contributions from the ophthalmologist.

Melgen's attorney issued a statement before the data release to try to put his client's billing in perspective.

"At all times, Dr. Melgen billed in conformity with Medicare rules," Kirk Ogrosky said.

The use of the more expensive eye drug helps explain why so many of Medicare's top billers are ophthalmologists.

Of the doctors who were paid at least $1 million by Medicare in 2012, 879 were ophthalmologists, who - like Melgen - relied on using the more expensive drug, Lucentis.

Some physicians have suggested that using Lucentis is wasteful because a much cheaper alternative exists.

Melgen, like some other doctors among the top billers, already has drawn scrutiny from Medicare investigators.

Indeed, government inspectors have noted that instances of billing disputes and potential fraud may occur more frequently among the highest Medicare billers.

A December report from Health and Human Services, for example, analyzed the records of 303 physicians who were paid more than $3 million by Medicare in a year.

It found that 13 were responsible for overpayments totaling $34 million, six faced payment reviews, three had their licenses suspended, and two were indicted.

In releasing the data, Medicare officials forbade news outlets from sharing any of the data until 12:01 a.m. today. This provision meant that reporters could not solicit responses from any doctors beforehand.

http://hamptonroads.com/2014/04/medicare-provided-docs-milliondollar-paychecks

How Is your Organization Administering and Managing Health Risk Assessments?

Launch HRA

Patient Centered Health Risk Assessments are a valuable tool that can be used to identify and capture opportunities for prevention, identify injury risks, reduce modifiable risk factors, and alert providers of an urgent health need.

How are you ensuring that all of your patients complete an annual HRA?

 The Patient Protection and Affordable Care Act of 2010 included several provisions intended to improve the health of Americans and prevent the onset of preventable chronic conditions.

Section 4103 of the ACA, establishes a Medicare Annual Wellness Visit beginning in 2011 that includes a Health Risk Assessment (HRA) without cost to beneficiaries.

Other provisions of Section 4103 include:

·         Establishing standards for interactive, telephonic, or web-based programs used to furnish HRA’s, and

·         Determining ways of using the HRA in the formulation of a personalized prevention plan for beneficiaries.

The law also requires that HRA’s are easily accessible to beneficiaries and that support is provided to those wishing to complete an HRA.

The statute recognizes the critical nature of follow up services by encouraging integration of HRA’s with health information technology (HIT), including electronic medical records (EMR’s), and personal health records (PHR’s) and by leveraging these technologies in developing patient self-management skills and by the management of, and adherence to, provider recommendations, as a means of improving the health of beneficiaries.

In addition to regulatory encouragement, HRA’s offer providers an opportunity to engage with Medicare members in new ways while tackling the benefits of prevention.

Consider the value of administering and managing your HRA’s through a “Learning Health Care System”…

One where personalized assessments, and prevention planning would be available anytime, anywhere, and on any device.

One where experiences are captured, stored, and then used to create individualized learning pathways that promote health literacy, prevention and chronic disease self-management.

Imagine the possibilities!

Click on the image above to launch the new HRA Experience from mHealth Games.

Lawmakers look to expand, regulate telemedicine in Florida, but House Senate bills far apart

MIAMI — The calls may come in the middle of the night and from hospitals more than an hour away. Someone is having a stroke and is en route an emergency room in the Florida Keys, but there aren't any neurologists on call.

Within 15 minutes, a University of Miami neurologist pops onto a computer screen and can order an IV drug that should be given within three hours. It's that sort of potentially life-saving technology that some lawmakers say will drive down health care costs, while also addressing serious doctor shortages around the state.

A Senate bill would increase the use of telemedicine in Florida and establish requirements for health providers who treat patients remotely. A companion bill is also making its way through the House, but that bill doesn't require doctors to have a Florida license — only that they be licensed in their home state and registered in Florida.

"If we didn't have an access problem we wouldn't be here today ... everyone would rather see the doctor face to face, but when your mother is having a stroke in rural Florida and the choice is having a doctor via telehealth versus having no doctor," said Rep. Cary Pigman, an emergency room physician who supports the bill.

The Senate bill requires doctors providing telemedicine services to patients within the state to be licensed in Florida or meet an alternative requirement. For example, an insurer using a doctor that's in-network in another state would also be allowed to treat a Florida patient. The bill recently passed a Senate committee, but has two more stops before it's heard on the floor. Dozens of other states have passed legislation supporting telemedicine.

The Senate bill also would require Medicaid to reimburse for telemedicine services and allow doctors to negotiate payment rates with insurers. The House bill doesn't address payments.

"If you're a patient in Florida and you have a specific heart defect and the guru is a doctor in Philadelphia, you should be able to consult with her," said Republican Sen. Aaron Bean, who is championing the bill.

But critics worry that requirements for doctors in other states could compromise patient care. Some say that doctors practicing telemedicine in Florida should be licensed here.

"It may be the wave of the future, but I still think we need to concentrate on the patients and the bottom line is these (out of state) doctors are not licensed in Florida so they don't have the same accountability," said Sen. Dorothy Hukill, who voted against the bill.

Bean said they will be held accountable through the insurance company or the doctor's network they practice within.

Rep. Gayle Harrell, voted for the bill, but noted it still has problems.

"I also need to know what my recourse action should be should some malpractice incident take place," she said.

She also wants to see a website created where people can find information about the out-of-state doctors who may be treating them. After all, she noted, patients can't walk into the office of an out-of-state doctor and see medical degrees on the wall.

The Florida Chamber and several other groups, including ones representing nurse practitioners, physician assistants, nurses and pharmacists all support the bill.

But the powerful Florida Medical Association is strongly opposed, worrying it doesn't require treatment by a licensed Florida physician or mandate a review of the patient's medical history. The organization said such technology holds great promise, but does not support the bill in its current form.

"This will revert Florida back to the days of the Wild West where anyone with a bottle of whiskey, a pocket knife and Skype can practice medicine. That's what happens to the bill in its current form, said David Custin, a lobbyist for the group.

Several hospitals around the state have had success with telemedicine in recent years, helping patients in rural areas connect to specialists or getting multiple consultations conducted simultaneously for acute emergency cases. University of Miami neurologist Dr. Gustavo Ortiz has done more than 600 consultations since their program's inception in 2009.

Telemedicine saves money by reducing hospital and ER admissions and doesn't require medical transportation, supporters say.

Dr. Kim Landry, an emergency room physician and EMS medical director for four counties in the Panhandle, began a pilot program where 911 responders connect patients remotely to an ER doctor for a quick evaluation.

"Eight out of 10 times, they don't require transport to the hospital, so in a lot of cases, it's made life easier for a lot of sick patients," said Landry, who found those results after testing the program in nursing homes.

During a recent consultation, University of Miami dermatologist Dr. Anne Burdick asked an assistant at a Fort Pierce county health clinic to zoom the camera in on some scaly, white patches on a 10-year-old boy's legs. The boy is often kept indoors and complains of constant itching at night. Burdick, who diagnosed him with eczema, modified his prescriptions and added a monthly bleach bath to reduce bacteria. The boy was one of five pediatric patients seen remotely from her Miami office that day.

Burdick, who estimates 40 percent of her practice includes telemedicine patients, also does medical consultations for two cruise lines, the Indian Health Service and a weekly program for school children.

"For some areas in the state, it's going to be impossible to get specialists to that area and so telemedicine is really the best option, " said Burdick. "The bill will be a really good step forward for Florida."

http://www.dailyjournal.net/view/story/de83d3480a7e46b48960943b1abb6b03/FL--Telemedicine/#.U0PoOPldWSo

Previous Medicaid expansions by states did not erode perceived access to care

Bottom Line: Previous expansions in Medicaid eligibility by states were not associated with an erosion of perceived access to care or an increase in emergency department (ED) use.

Background: In January 2014, the Patient Protection and Affordable Care Act (ACA) expanded Medicaid eligibility so coverage in the public insurance program could be offered to more low-income Americans. However, some have suggested that the demand for medical services created by Medicaid expansion may erode access to care for individuals already enrolled in Medicaid, which can be restrictive.

How the Study Was Conducted: The authors examined previous Medicaid expansions to gauge self-reported perceptions of access to care and the use of ED services by enrollees. The authors examined data from 1,714 adult Medicaid enrollees in 10 states that expanded Medicaid between June 2000 and October 2009, and from 5,097 Medicaid enrollees in 14 bordering states that did not expand Medicaid.

Results: In Medicaid expansion states, the proportion of Medicaid enrollees reporting poor access to care declined from 8.5 percent before the expansion to 7.3 percent after the expansion. In the control states where Medicaid was not expanded, enrollees reporting poor access to care remained constant at 5.3 percent. The proportion of Medicaid enrollees reporting emergency department use decreased from 41.2 percent to 40.1 percent in expansion states and from 37.3 percent to 36.1 percent in states that did not expand Medicaid.

Discussion: "We found no evidence that expanding the number of individuals eligible for Medicaid coverage eroded perceived access to care or increased the use of emergency services among adult Medicaid enrollees."

Authors: Chima D. Ndumele, Ph.D., of the Yale School of Public Health, New Haven, Conn., and the Brown University School of Public Health, Providence, R.I., and colleagues.

JAMA Intern Med. Published online April 7, 2014. doi:10.1001/jamainternmed.2014.588.

Editorial: Health Insurance is Not Health Care

In a related editorial, Mitchell H. Katz, M.D., director of the Los Angeles County Department of Health Services and a deputy editor of JAMA Internal Medicine, writes: "The Congressional Budget Office estimates that by 2022 there will be 12 million new enrollees into Medicaid. Although this is an unprecedented leap forward in providing low-income Americans with health insurance, it is important to remember that health insurance is not health care. Health insurance is a financial mechanism for paying for health care. It is not the care itself, or even a guarantee of care."

"The gap between health insurance and health care can be particularly challenging for many Medicaid recipients to bridge. Studies have shown that a substantial proportion of physicians do not accept new Medicaid patients," he continues.

"Therefore, amid the optimism that millions of previously uninsured persons will gain Medicaid coverage, there is a fear that the newly insured will not be able to find physicians who will care for them, or that the influx of new enrollees will make access harder for those persons who already have Medicaid. In this vein, the results of the study by Ndumele et al in this issue of JAMA Internal Medicine are reassuring," he notes.

JAMA Intern Med. Published online April 7, 2014. doi:10.1001/jamainternmed.2014.598.

http://www.medicalnewstoday.com/releases/275157.php

Announcement of Calendar Year (CY) 2015 Medicare Advantage Capitation Rates and Medicare Advantage and Part D Payment Policies and Final Call Letter

Key Changes from the Advance Notice: 

Growth Percentages: Attachment I provides the final estimates of the National MA Growth
Percentage and the FFS Growth Percentage and information on deductibles for MSAs.

CMS-HCC Risk Adjustment Models for CY2015: For reasons discussed in Attachment II,
for the 2015 payment year we will blend the risk scores calculated using the 2013 CMS-HCC
and 2014 CMS-HCC models by 67 percent and 33 percent, respectively.

Medicare Advantage Enrollee Risk Assessments: CMS is not implementing, for 2015, the
proposed policy to exclude, for payment purposes, diagnoses identified during a home visit
that are not confirmed by a subsequent clinical encounter.

Normalization Factors: 

The final 2015 normalization factors are:

• CMS-HCC model implemented in 2013: 0.992 
• Clinically Revised CMS-HCC model implemented in 2014: 0.978 
• CMS-HCC model for PACE plans: 1.028 
• ESRD Dialysis/Transplant model: 1.004 
• ESRD Functioning Graft model: 1.028 
• RxHCC model: 0.961 
• RxHCC Risk Adjustment Model: CMS will not implement the updated RxHCC model in 2015. 
• We will continue to use the RxHCC model used in 2014, as published in the 2014 Rate Announcement (Attachment VII, Tables, 6-10). 

International Classification of Diseases-10 (ICD-10) Code Sets and Diagnosis Data Sources for 
2015 Risk Scores:

As proposed in the Advance Notice, CMS will use the prior calendar year as
the data collection year for 2015 risk scores (specifically, we will use CY 2014 diagnoses to
calculate the risk scores used in 2015 payment).

In addition, as proposed in the Advance Notice, CMS will use diagnoses from the Encounter Data System submissions for the calculation of 2015 risk scores (2014 dates of service), in addition to diagnoses submitted to the Risk Adjustment Processing System.

In the Advance Notice, we anticipated that data from both of these data sources would include diagnoses from ICD-10 code sets beginning with October 1, 2014 dates of service. Section 212 of the “Protecting Access to Medicare Act of 2014” delayed the adoption of ICD-10 standard code sets to no earlier than October 1, 2015.

Therefore, only ICD-9 standard code sets will be used for diagnoses for 2014 dates of service and, therefore, for 2015 risk scores.

http://www.cms.gov/Medicare/HealthPlans/MedicareAdvtgSpecRateStats/Downloads/Announcement2015.pdf

Decoding The High-Stakes Debate Over Medicare Advantage Cuts

By Jay Hancock

KHN Staff Writer

APR 07, 2014

This KHN story was produced in collaboration with 

Health insurers often try to influence Washington through quiet persuasion in plush offices. To fight potential government cuts for private Medicare plans, however, they’ve hit the streets.

The Obama administration has proposed reducing what insurers collect for Medicare Advantage plans — HMOs and PPOs, mainly — that cover about 15 million seniors. (Regular Medicare, which still covers most seniors, pays doctors and hospitals directly.)

The rate change, part of the Affordable Care Act, is the next step in winding down a subsidy that pays Medicare Advantage plans substantially more than what traditional Medicare costs. Proponents say the move will end what they call an industry windfall and pressure insurers, hospitals and doctors to deliver care more efficiently.

The industry, which maintains the cuts will raise costs and reduce consumer benefits, has launched a massive national counterattack, running numerous “seniors are watching” ads, getting beneficiaries to pepper politicians with calls and letters, and lobbying the administration to back off.

The final 2015 Medicare Advantage rates are expected to be released Monday. Here are some common questions about the controversy.

I’m not in a Medicare Advantage plan. Does this affect my traditional Medicare?

No. Fewer than a third of Medicare beneficiaries use Medicare Advantage. Nor do proposed cuts affect “Medigap” policies that supplement regular Medicare coverage. 

Why is the insurance industry trying so hard?

The stakes are enormous and Democrats in Congress and the Obama administration are seen as more susceptible than usual to pressure. It’s an election year. The Affordable Care Act remains unpopular. And threats to Medicare often motivate older voters.

“For a lot of these vulnerable Democrats, one, they need the seniors. Two, there’s a lot of money that could go for or against them” in November, depending on what the administration does Monday, said Lee Drutman, a lobbying expert with the Sunlight Foundation, a Washington, D.C.-based organization focused on government transparency.

A spokesman for America’s Health Insurance Plans, the main industry lobby, said the effort is its “largest-ever mobilization.” Industry critic and former insurance executive Wendell Potter said it may be the biggest insurance publicity campaign since the “Harry and Louise” ads, which helped undermine the Clinton administration health-reform effort in the 1990s.

Ads criticizing Democrat Alex Sink for supporting “deep cuts to Medicare Advantage… to pay for Obamacare” helped her lose a special congressional election in Florida last month, analysts said. (The U.S. Chamber of Commerce sponsored the spot. AHIP, which has given the chamber money in the past for advocacy, didn’t pay for it, said AHIP CEO Karen Ignagni.)

What are the stakes?

The nonpartisan Congressional Budget Office estimates the health law would reduce Medicare Advantage payments by $156 billion over a decade. In February the Department of Health and Human Services announced tentative cuts that most analysts calculated to be around 5 percent, which would reduce insurer payments by $7 billion next year alone.

At UnitedHealth Group, one insurance giant, Medicare Advantage plans account for a fourth of all profits, said Ana Gupte, an industry analyst for Leerink Partners. Another, Humana, owes two-thirds of its profit to Medicare Advantage, she said.

“It’s a big deal. It’s huge,” she said of Monday’s expected announcement. “2015 earnings are very, very dependent on what the rates look like.”

Why do insurers say more Medicare Advantage cuts would hurt seniors?

The extra 6 percent that Medicare Advantage costs taxpayers compared with traditional Medicare pays for things that benefit members such as gym memberships, care coordination and better health outcomes, insurance executives say.

Lower government payments would induce them to offer fewer Medicare Advantage plans and raise costs for members, they say.

Last year, similar pressure on payments caused “reductions in benefits, increases in out-of-pocket costs and changes in provider networks,” said Ignagni. “A number of seniors are living in areas where they’ve had a reduction in choice” of plans. Others see little change.  

Did last year’s changes hurt Medicare Advantage’s popularity?

No. Medicare Advantage membership grew 9 percent last year. Nearly 100 percent of beneficiaries have the option of choosing a Medicare Advantage plan where they live.

While some carriers withdrew from some markets, others expanded. The number of Medicare Advantage plans stayed about the same from 2012 to 2013, according to the Medicare Payment Advisory Commission. 

“Enrollment growth suggests that Medicare Advantage continues to be attractive,” said Gretchen Jacobson, associate director of the Kaiser Family Foundation’s Medicare policy program. (KHN is an editorially independent program of the foundation.)

What happens if my Medicare Advantage plan leaves town?

You’re still eligible for regular Medicare.

Do Medicare Advantage plans really offer higher-quality care?

Evidence is mixed. Some studies show higher clinical quality on several measures and more appropriate use of procedures. Other research suggests that results for Medicare Advantage plans seem better only because gym memberships and other perks attract members who are substantially younger and healthier.

How profitable are Medicare Advantage plans for insurance companies?

The plans earned an average profit of 4.5 percent in 2011. Policies covering more than half the members that year would have met new requirements to spend a minimum on medical care rather than administration and profits, according to the Government Accountability Office.

A new paper by economists from the University of Pennsylvania's Wharton School finds that the higher rates HHS pays for Medicare Advantage contribute more to insurer profitsand advertising spending than consumer benefit.

“It doesn’t seem obvious to me that we should do any delaying in the cuts on Medicare [Advantage] reimbursement,” said Mark Duggan, one of the authors. “It appears that it will cause minimal adverse effect to consumers.”

If the Affordable Care Act says to cut Medicare Advantage payments, how much room does HHS have to do something else?

HHS has broad administrative power to adjust what insurers get for Medicare Advantage beyond changes required by law. For example, the agency’s decision to temporarily increase bonuses for plans that met “star” quality targets starting in 2012 counteracted some of the mandated cuts.

This article was produced by Kaiser Health News with support from The SCAN Foundation.

http://www.kaiserhealthnews.org/Stories/2014/April/07/Decoding-The-High-Stakes-Debate-Over-Medicare-Advantage-Cuts.aspx