How Senior Medicare Advantage Plans Game CMS and the System

GAO States CMS Overpaid Medicare Advantage Plans During the Years of 2010 to 1012–Flawed Risk Assessment Calculation Errors 

CMS discovers fraudulent use of algorithm and will sue several plans for $70B

CMS Discovers That Insurers Offering Medicare Advantage “Really Know How To Sharp Shoot A Model With Adjusting Risk For Profit”, A Common Everyday Occurrence in Financial Markets… - Medical Quack

 A report issued this week by the Government Accountability Office reports that the Centers for Medicare & Medicaid Services overpaid the Medicare Advantage program run by private health insurers by between $3.2 billion and $5.1 billion for the years 2010-2012.

The overpayments, according to GAO, were the result of CMS inadequately adjusting based on health status for members enrolled in Medicare Advantage. 

Insurers who run MA plans are paid a set amount per beneficiary, adjusted by a risk score that calculates the expected consumption of health services in the coming year for each beneficiary. 

In practice, the risk scores for beneficiaries with the same health conditions and with the same demographic profile should be the same. However, the GAO discovered in its analysis that coding differences between Medicare Advantage enrollees and those enrolled in the traditional fee-for-service Medicare plan led to “inappropriately high MA risk scores and payments to MA plans.” 

Fraud, What Fraud?

The Medicare Advantage (MA) program was established in 2003 in order to incentivize health plans to provide better care for the elderly and control expenses in doing so. Nearly 16 million seniors are presently enrolled in MA, costing an estimated $150 billion in taxpayer’s money every year. The MA program has grown in popularity with Medicare beneficiaries because it has lower out of pocket expenses than traditional Medicare, offers more benefits, and fills some gaps in coverage.

 Unlike the fee-for-service payment arrangement in traditional Medicare, where each service is billed directly to the government, Medicare Advantage plans receive a monthly, set capitated payment to provide care for their enrolled Medicare beneficiaries. However, health plans do receive a higher monthly capitated payment to care for sicker patients, based on the patient’s “risk score”. The risk score is determined by a variety of factors, but is primarily based on the patient’s Hierarchical Chronic Conditions, or HCC score, which are conditions tied to specific ICD-9 diagnoses.  Risk scores are required to be backed-up by medical record documentation, but the government still has difficulty verifying each diagnosis. (no simple process)

 While the problem of false or improper billing is essentially eliminated in the MA program, fraud remains an issue nonetheless.  Recent investigations by The Center for Public Integrity have highlighted some of the more egregious practices occurring in the Medicare Advantage program related to risk scores, which are not only damaging to the program’s reputation, but have also cost America’s taxpayers an astounding $70 billion since 2008.   However, the most shocking part of their investigation is highlighting how little control the government has in reigning in this problem.

 Research has shown that MA Plans exhibit greater “coding intensity” in documenting disease conditions, so that an MA enrollee’s risk score grows substantially faster than an FFS enrollee’s risk score.  Once Medicare enrollees switch from the traditional Medicare fee-for-service program to a Medicare Advantage plan, their HCC scores increase.  Medicare Advantage plans contend that the higher scores are due to sicker patients, but without intense auditing, it is difficult to support or disprove that logic.

 In addition to the diagnoses obtained from primary physician records, another method gaining ground among Medicare Advantage plans to bolster risk scores is via home health visits. While home health services may legitimately uncover previously unknown medical conditions, more unscrupulous health plans may leverage home health visits as a tool to inflate risk scores, and thus increase their profits from these patients by thousands of dollars each year. Health plans argue that these visits improve patient care, but opponents claim they unnecessarily inflate costs without actually providing more medical services.

Health Care Financing, CMS and HHS have devolved to a dysfunctional chaotic state.  The OIG reports these matters to Congress. So why do your legislators do nothing about it? 

Perhaps it is because they are not smart enough to plan health care while running the rest of the government.

Another View of American Health Care by Uwe Reinhardt, PhD

We published an article yesterday (February 14, 2015) which included a link to the Affordable Care Act. This was not meant to be an endorsement.  I have focused on the pitfalls, inadequacy of the ACA and, the outright sabotage of our health system, rather than improving and reducing cost.  Despite the stated goals of  HHS, and CMS to slow down health cost escalation and reduce cost, the ACA increases bureaucracy ad overhead.

Uwe Rheinhardt, PhD has been a whistleblower on the  U.S. health scene.  He minces no words. Does anyone listen, or this just wishful thinking ?  Healthcare is not is only area of study.  He has taught courses in economic theory and policy, accounting, and health economics and policy. Reinhardt's scholarly work has focused on economics and policy and includes more far-reaching topics such as cost-benefit analyses of the Lockheed L-1011 TriStar^[5] and the Space Shuttle.^{[citation needed]} He currently is the professor of Economics 100 and Economics 332 at Princeton University.

Research

Reinhardt's most recent^[when?] research has focused on hospital pricing, systems of health care around the world, Medicarereform, and health care spending. His work has appeared in Health Affairs, The New England Journal of Medicine, JAMA, and The British Medical Journal.^[6]

Administration[edit]

In the 2009 Frontline show "Sick in America", Reinhardt criticized the United States for spending 24% of every health care dollar on administration, and pointed out that Canada spends less than half of the U.S. amount and Taiwan spends significantly less than Canada.^[10] Reinhardt faulted the seeming U.S. preference for an unwieldy "mishmash of private insurance plans" for the inefficiency.^[10] He said if the U.S. could spend half as much on administration, it would save more than enough money to cover all the uninsured.

Physician Abdication of Power

Background:

During the last two decades physicians have abdicated their role to CMS and payers fo policing each other. Resident physicians are closely supervised and gradually given more responsibility for decision making as they proceed from PGY 1-PGY4.  As a chief resident they are responsible for much of the activity of junior residents. Surgical and/or medical residents in certain specialties have their proposed surgical cases reviewed by either a chief resident, or director of the training program prior to scheduling.

During the first year of practice or if the MD change hospitals medical staff regulatons require providers to have a  proctor during a certain number of cases to insure proper judgment and  competence.

Following this period they are allowed to operate alone.  Further proctoring is usually not necessary unless there is a complication or a death. Usually this takes place in a departmental meeting for review. This often serves as a learning experience and is not a punitive affair. If the difficulties persist the physician will be required to obtain further training or more supervision until he demonstrates competence.  The entire process is physician led. It is private and confidential and not discoverable by non-physicians.

During the last two decades physicians have been lax in many regards, and have not required chart reviews prior to surgery nor review of treatment protocols unless there is an untoward event resulting in a morbidity or mortality and after the fact.

Current:

The review and authorization procedure now is conducted by insurers for prior authorization by a non-physician or a medical director for a payer.  This occurs away from the clinical setting when the physician submits the case  history, and proposed procedure.  The intensity of the review by CMS and payers is usually determined by the level of cost and number of procedures that are done.  The ultimate goal is not patient safety, nor quality of care. It is to reduce cost.  Their benchmark for what is reviewed is a simple algorithm.   #of cases X cost/case = total cost. Cases that are done in high volume, or high expense will require prior authorization. Such cases or diagnostics include Cataract removal, Hysterectomy, Spine surgery, Interventional cardiology. Many of these are surgical or advanced medical interventions. Many of the reviews are for expensive imaging, such as MRI or CT imaging.

There has been a gradual erosion of self determination and  pre-surgical review by physicians and surgeons, allowing CMS and payers to intrude into physician-patient relationshiphs.

Future:

Physicians will reclaim the role of ascertaining quality control and prevention of abuse and fraud by peer-review of  expensive and high volume procedures prior to procedures, both diagnostic and Invasive.  It will be required that all pre-surgical cases be reviewed by another member of the department prior to scheduling (except for emergent or urgent need.) The insurance company should not have any role in  prior authorization.  That will be the purview of medical staff, much like PQRI was performed in the late 1980s for cataract removal.  

This system will allow peer and case review for the medical staff and immediate feedback for non-compliant providers.

The insurance system will be simplified.   Delays and/or denials could be eliminated for review, authorization and payments.  Administrative expense could be reduced. This will require some additonal time and effort by physicians.  That is the price for professional freedoms.  Freedom takes effort to maintain.

Is this an idealized vision for the future, or will it come to pass?  Only you and I can decide.

The time has come to draw a red line in the sands of health care.

Openness and Transparency

Medicare recently released figures for physician billing It included all physicians who bill CMS for services.  CMS requires a ‘current procedural code’ (CPT) for each visit, outpatient, inpatient, laboratory, imaging and/or medication and durable medical equpment. There are numerous modifiers, such as those for bilateral proceduress and the like. The data was released without explanation or definition.  The codes are uniform and identical across all specialties.  This is the first time such complete information was released to the general public.

CMS uses the data to track and analyze billing practices. It is used to analyze for fraud and abuse. CMS studies the numbers for outliers...who bill the most….using a specific code. Some CPT codes are used to determine the amount of complexity or time involved in a patient visit.  CMS has specific items which are required to code for the level of complexity of the visit.  The CPT codes are complicated and providers will often consult with or have a ‘reimbursement expert’ to code. Except for general internal medicine most specialists use a relatively narrow range of CPT codes according to the procedures they do. (gastroenterology, ophthalmology,urology, radiology etc.

(NPR) National Public Radio broadcast information given by CMS and also commentary by a  physician who  heads the kidney transplant program at the University of Colorado.  The program is the only facility in Colorado providing these services and referrals come from a wide area, even beyond Colorado.

The data revealed the following. Some physicians  coded every visit at the maximum level of reimbursement (rare), some appeared to up-code or bill more than the standard level for some or all visits. Some even down-coded to avoid being selected for an audit.  They chose to decrease income to avoid such an audit which is time consuming and expensive. The outcome of many of the audits is a demand for repayment of the amount CMS determined was billed in excess of the supporting documentation.  Providers must document in the medical record exactly what systems (kidney, lung, heart, skeletal) were examined, and the amount of time for the visit.  The CPT code must be justified by the medical record.  CMS provides guidelines for each level of care. In surgical cases the code also includes all post-operative care for a defined period of time depending on the complexity of problems.

Physicians are the ultimate responsible person who attests to the level of billing and it’ accuracy.

In some cases the data reflects billings for multiple providers who  work for another provider. The data has nothing to do with quality of care. Frequently new procedures develop and it may take months for CMS to announce a code for the new procedure.  The rapid advances in medicine and surgery often result in procedures and/or tests for which there is no code.

Missing from the information is the necessary linkage between a diagnosis and a procedure, without which the claim is denied. If the ICD code and CPT do not fit CMS’s definition the claim will be denied.  CMS has a vast data base on what CPT codes match which ICD code.

The ICD-9 codes have been in existence since       . To further complicate matters a new expanded series of codes, ICD-10 will go into effect in the next 12 months.  The original date for compliance (October 2014) was extended because of providers and hospitals informing CMS and HHS they would not be able to comply with that mandate.  The number of ICD codes expands from 14,000 to over 60,000.  The data in the released information is based upon ICD-9.   The expansion of the ICD codes will require expensive EHR software upgrades and in some cases a new EHR.  Some  providers already replaced their systems several years ago due to early mandates for interoperability and other features.  This amounts to billions of dollars for providers.  The cost may well be more than the ‘fraud and abuse’ claimed by CMS.   CMS  has no provision for the expense of providers to continually be required to upgrade in order to bill.  This is a recurring problem.  CMS quarterly modifies its list of CPT codes and instruction for modifiers as well.  These are hidden costs to medical care, and their is little to no information available to the public regarding these CMS requirements.  The expense from these requirements is never ending and repetitive.

Private Insurers also becoming more open and transparent

Aetna, Humana, UnitedHealthcare to supply healthcare cost data for new transparency tool

Three major insurers are partnering with a not-for-profit group to provide consumers with greater access to healthcare cost information, the group announced Wednesday morning. (MODERN HEALTHCARE)

FULL STORY »

Openness and transparency not only apply to financial information, but more important to the physician-hospital-patient interaction.  Unfortunately patient centered medicine is still far from reality.  The transition from a physician led system has been a subtle erosion of ‘captain of the ship’ to a member of the team mind-set.

FEDERAL HEALTH BENEFIT EXCHANGES: COVERED CALIFORNIA, BREAKING NEWS

Exchange enrollments at 3.3 million, big jump in January

By Paul Demko 

Posted: February 12, 2014 - 5:15 pm ET

Tags: Costs, HealthCare.gov, Insurance

(Story updated at 6:15 p.m. ET)

Nearly 3.3 million individuals signed up for private insurance plans through the state and federal exchanges during the first four months of the open enrollment period, HHS reported Wednesday. The total represents significant growth in January, but is still less than halfway toward the goal of 7 million enrollments by March 31.

State exchanges enrolled 1.4 million individuals through the end of January, while 1.9 million individuals signed up through the federal exchange, according to figures released by the CMS on Wednesday. The federal exchange, in particular, showed momentum in January: Nearly 40% of total enrollments through the federal HealthCare.gov website occurred last month. 

It's very, very encouraging news,” HHS Secreatary Kathleen Sebelius said on a call with reporters Wednesday.  

However the total numbers only show a small part of the enrollment issues.  Demographics vary widely from state to state in terms of age, health, and gender.

“We're seeing a growing population of Americans who are young, healthy and well covered, and these younger Americans are signing up in greater proportions,” Sebelius said.

A significant number of new enrollees are from those who had pre-existing policies cancelled at the end of 2013.

Catastrophic Options

Hardship Exemptions  (Qualifications)

However, in some states exchange customers continue to skew significantly older. In Ohio and Wisconsin, for example, only 21% of enrollees were between the ages of 18 and 34.

A gender discrepancy is also emerging, with women representing 55% of those seeking coverage. In some states, the gender imbalance is even more pronounced. Women account for 60% of signups in Oregon and 62% of exchange customers in Mississippi.

HHS also issued data for the first time on the type of plans being purchased on the exchanges. More than 60% of state and federal exchange customers opted for silver plans, which are designed to cover 70% of medical costs

Last week, the Congressional Budget Office reduced its estimate for how many people will sign up for coverage in 2014 from 7 million to 6 million, due in part to the rocky rollout of the federal exchange and continued problems with some state marketplaces. 

There is still no data available on how many individuals have actually made their first premium payment. Even after enrollment and premium payment it remains to be seen how many will find a suitable provider. Magnifying this issue in California is massive errors in the provider directory listing providers who will not accept Covered California.

A massive  deception has been built into Covered California. Policies called Blue Shield PPO (Silver  Plan) are not ordinary Blue Shield PPO plans.  Not only that but there is a difference between group PPO plans and Individual Family Plans (IFP).

I contacted a wel established medical group (Inland Empire)  (120 providers)  to inquire about their providers enrolled in Covered California. I was told tthey accept the group Blue Shield PPO, but NOT the IFP. 

This will come as a great shock to those enrolled in many Covered California plans.

Precautionary note:  Check with your chosen provider to ascertain if they accept your specific plan under Covered California. Covered Callifornia is a general term and means very little. Be certain to find if the specific plan that was signed up for is truly available.

Many patients will present to the doctor's office and find they do not have a provider.

Important News:  Covered California is updating it's Provider  Directory.  Check with your chosen provider to corroborate their participation.  Urgent Care Centers are also specific to a planBe certain your chosen provider is aa member of the medical staff of your chosen hospital.

The Health Benefit Exchanges say that enrollment can be changed until March 31.2014.  

Note: This article will be updated weekly.

The Sad State of HHS and CMS

Many ask, "Has HHS and CMS bitten off more than it could chew?"

The Failed Whale

Perhaps health.gov should have used the 'Fail Whale' icon for it's failed website. Those of you who were on twitter when it first began would see the 'fail whale' when twitter was overloaded. We don't see this very much anymore.....HHS has inherited the 'Moby Dick" of the Affordable Care Act.  Has anyone seen Ishmael ?

Medicaid & Medicare  Pharmacies Braced for Cuts to Their Medi-Cal Payments LawMakers Reach Deal on Doctor Payments Health Reform News  U.S. lawmakers reach accord on paying doctors for Medicare Los Angeles Times - February 7, 2014 Exchange Mum on Premium Payments California Healthline - February 6, 2014 Aetna Expects to Lose Money on Health-Law Marketplaces Wall Street Journal - February 7, 2014 Obamacare Thrives In San Francisco's Chinatown Kaiser Health News and NPR - February 7, 2014 An interesting evaluation of an ethnic community health plan Ex Microsoft Exec Brings Lists and Whiteboard to Overhaul Obama Website How he wound up with this job...His road to this job was a long one. It began in July -- about 12 weeks before the launch of healthcare.gov -- when Microsoft CEO Steve Ballmer announced a massive reorganization  (their loss, our gain).  DelBene’s process is collaborative and open, his colleagues say -- which is important in his new role. “You can see him evolve his positions as he gets more data. It’s not like he’s established his positions and [listening] is just a formality -- just Kabuki ritual theatre,” says U.S. Chief Technology Officer Todd Park. Todd Park, the U.S. chief technology officer, praises DelBene for listening and being open to new ideas (Photo by Karl Eisenhower/KHN). After finishing up his part of the presentation, he felt a “tingle” at the back of his throat, as though he was going to start coughing. He didn’t want to disturb anyone, so he headed for the door to the hallway -- or so he thought. “I started opening the door to the closet!” he recalls, and there was laughter all around.  “Oh! The new guy!” the president said. The Health Benefit Exchange is a product of how government works. DelBene would never have released a product from Microsoft without assurances it did not have many "bugs.  Perhaps part of our government should be 'privatized' and failures should be penalized........just as it is in the real world.  How long will voters and taxpayers tolerate incompetence while paying the bill ?

Feeling the Pain ? ACO ACA HIX HIE HHS CMS ICD10

We physicians have some difficulty objectively measuring pain.  Even subjectively it becomes a challenge when your patient asks for pain medications.

The standard of medical practice now is to ask, "What is your pain level from 1-10 if 10 would be the worst pain  you have ever felt, and 0 is no pain whatsoeverl.  Even this scale is very subjective and is based upon what that patient considers his worst pain.  That depends on many factors. Patients who have never had any pain would not know what the worst pain would be.  Pain thresholds differ greatly from one patient to ano ther.  Comparing one patient to another with  this metric is meaningless.  Perhaps we should set a standard as labor pains. This standard however would only apply to women.

All of the above acronyms are a feature of health reform, which is not painless. The medical lexicon includes countless three letter or four letter acronyms, which are too lengthy to describe here.

ACO, ICD-10, MU, PCMH, and PQRS are more than just an acronym soup. 

Karen DeSalvo now the head of ONC and a former primary care physician from Louisana is the lady for the job of reducing our pain. (perhaps hypnosis, denial, or retirment would be better than the narcotic of acceptance and/or major revision of how government interacts with healthcare.

Diana Manos of Health IT News describes DeSalvo's background: 

To advance America’s triple aim of improving the experience of care, improving the health of populations, and reducing per capita costs of healthcare, DeSalvo outlined five key goals, which ONC will be focused on over this, the second decade of its work.

They are:

1. Increase end user adoption of health IT
2. Establish standards so the various technologies can speak to each other
3. Provide the right incentives for the market to drive this advancement
4. Make sure personal health information remains private and secure
5. Provide governance and structure for health IT

DeSalvo believes interoperability remains the most important issue as a framework for Health Reform.

Despite more than half a decade of progress, Interoperability appears to have stalled.

Michael Schatzlein MD 

of Asencio Health describes the current status of interoperabillity and it's future in the world of the internet.  It's greatest hope is the present generation of internet enabled patients who will demand interoperability, perhaps at the ballot box if bureaucrats cannot accomplish the goal..  The federal government has already invested billions of dollars of your tax money toward this goal.

Death Spiral ? Is this the 'Black Hole for the Affordable Care Act

A better title for this may be "Failure to Launch"

Our congress has launched a multi-stage rocket. Whether it will obtain a free standing orbit is open to question.
Stage I success is very much in doubt. The velocity may be inadequate to launch stage II and even if Stage II lights off the orbital insertion velocity will be insufficient to obtain an orbit.

The lack of success in the enrollment process due to the failures of healthcare.gov and other related items in enrollment of young people may be a fatal even in financing the entire initiative for the Affordable Care Act.

This enrollment was meant to offset the expanded coverage for older patients, and increased enrollment of previously uninsured due to income limitations, and patients with pre-existing conditions.

Those in the know are already talking about a 'bailout' for insurers amounting to billions of dollars.  Again, 'it's too big to fail".

Nancy Pelosi was correct, "We won't know what is in it until it is passed"  This is a hell of a way to run 1/6th of our economy.

Prominenrt voices are being raised in the credible media about these real risks. Even dome Democrats have lowered their flag, although there remain some demagoguery and social engineers who are attempting to hi-jack our freedoms and bankrupt our already insolvent government.

Let's face it, our government lies, not only about health care, and politics, but national security issues.

Keep and open mind, but verify what we are being told by our government.