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.

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 ?

IRS VIOLATES HIPAA FACES LAWSUIT BY A "JOHN DOE"

HealthCare IT News reports  The Internal Revenue Service could now be facing a class action lawsuit over allegations that it improperly accessed and stole the health records of some 10 million Americans, including medical records of all California state judges.

According to a report by Courthousenews.com, an unnamed HIPAA-covered entity in California is suing the IRS, alleging that some 60 million medical records from 10 million patients were stolen by 15 IRS agents. The personal health information seized on March 11, 2011, included psychological counseling, gynecological counseling, sexual/drug treatment and other medical treatment data. 

"No search warrant authorized the seizure of these records; no subpoena authorized the seizure of these records; none of the 10,000,000 Americans were under any kind of known criminal or civil investigation and their medical records had no relevance whatsoever to the IRS search. IT personnel at the scene, a HIPAA facility warning on the building and the IT portion of the searched premises, and the company executives each warned the IRS agents of these privileged records," the complaint continued.

If the allegations are true, the IRS is in trouble,” wrote Jim Pyles, Washington-based healthcare privacy lawyer, in a statement to Healthcare IT News. “By both constitutional law and HIPAA, then I think we have a problem.”

The Department of Health and Human Services recently stated that the ACA does not grant the IRS open access to Americans' medical records with no cause. "The Affordable Care Act maintains strict privacy controls to safeguard personal information. The IRS will not have access to personal health information,” said HHS spokesperson Erin Shields Britt, to Kaiser Health News.

The IRS refused to comment when questioned.

The present plan is for the IRS to verify and document income and the consumer's insurance status.  This is contemplated to begin in 2014 in order to determine the consumer's insurance status.  The result will be used to determine a fine or penalty in lieu of insurance.

Thus far we have seen extreme difficulty with the mandate for October 2014,  wherein the Health Benefit Exchanges would be accessible to the public. This did not occur, as planned.

The vagaries of having two large governmental agencies coordinating their  tasks is worrisome. HHS has demonstrated problems with their own agency, and this behavior by the Internal Revenue Services raises serious questions about HHS and the IRS conforming to HIPAA regulations.

The roll out of the ACA has been fraught with difficulties, and the majority of Americans are not  in favor of continuing in it's present form.  Some want the ACA repealed, others want major amendments to the law.

Despite law our executive branch makes unilateral decisions, ignores mandate dates, and has caused major upset to insurers and patients, alike.

Trust and faith have much to do with acceptance of laws, and the doctor-patient relationship. As physicians our duty is our patients. Most patients do not understand the  inner workings of the system until it goes wrong.

It is our ethical responsibility to inform our patients how the system  works, and the inherent and probable dangers of the affordable care act.