Source Note that I find the legend a bit confusing. The purple areas are the ones with highest diagnostic intensity, and would have lower Medicare Advantage reimbursement if that was taken into account
"I take care of the sickest patients" is what all physicians say if it appears that their utilization or costs are out of line with colleagues. Sometimes, that's true. But all physicians can't have above-average illness burdens in their patient populations any more than all children in Lake Wobegon can be above average.
There were two interesting articles on risk adjustment last week.
The first is a wonky Perspective piece in the New England Journalevaluating the impact of "diagnostic intensity" on apparent risk adjustment. The simple translation of this is "doctors who are more aggressive in their diagnostic coding 'trick' the risk adjustment software into assigning their patients higher risk."
The researchers looked at diagnostic intensity by MSA, evaluating how diagnostic intensity changed when Medicare beneficiaries moved. It's ingenious - and the research showed that while the doctors in McAllen Texas appear to have patients that are 25% higher risk than those of El Paso based on their coding, that would decrease to a 15% differential if their aggressive coding is neutralized.
The places where diagnostic intensity is especially high: The northeast, the south, and some metropolitan areas of California. Florida, Texas, SoCal and Metro New York have the highest amount of apparent diagnostic upcoding.
The researchers state:
…patients who live in areas of the country where providers tend to diagnose more aggressively will be measured as being sicker than patients who are actually similarly healthy but live in areas with less intensive diagnostic practices. Payments and performance measures will therefore be tilted to favor providers in more diagnostic-intensive regions.
The gist. We need to adjust risk adjustment!
Medicare completed phasing in risk adjustment for all Medicare Advantage plans in 2007. CMS recognized that there would be "diagnostic creep," so all risk adjustment is calculated on a cost-neutral basis. If some provider organizations code aggressively and are paid more, those provider organizations that don't code aggressively will be penalized by being paid less.
It's no surprise that health plans worked hard to get their providers to fully code for all possible diagnoses so that the health plans would get the highest possible CMS revenue for their Medicare Advantage populations. Just google "risk adjustment Medicare" and you'll be shocked at how many vendor ads pop up. Some health plans even sent providers to patient homes to assess them - and to pile on any possible diagnoses that would increase revenue yield.
The US has joined a whistleblower lawsuit against United Health Care (initially filed in 2011) saying that it received hundreds of millions of dollars in excessive reimbursement due to "'upcoding' the risk adjustment claims by fraudulently documenting diagnoses that members didn’t have or did not receive treatment for during the eligible period."
United isn't the only defendant in this lawsuit. Modern Health Care reports that at least 9 other health plans are also named; the Department of Justice only joined the lawsuit against UHC and a company it acquired. I'd say that if there was fraud, the victims were other health plans that had their reimbursement cut- as CMS makes all risk adjustment payments cost neutral.
Risk adjustment is critical - some providers DO take care of sicker patients. However, any risk adjustment system is can be gamed- and we'd like to be sure that providers (and health plans) spend more energy on taking genuinely great care of the sick people, as opposed to spending the majority of their effort at achieving higher revenue through aggressive coding.
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