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.

Medical School Hopefuls Grapple With Overhauled Entrance Exam : Shots - Health News

Medical School Hopefuls Grapple With Overhauled Entrance Exam : Shots - Health News : NPR

Prospective medical students MCAT test updated for first time in 20 years.  Major new emphasis on social science students. Meaning of life, quality of life, Humanities weighted more heavily......21st Century Medicine

Accountable Care Organizations: The Next IRS

The invention of the ACO is associated primarily with one man – Dr. Elliot Fisher, director of the Center for Health Policy Research at Dartmouth Medical School.

Fisher’s statement that he can invent rules for assigning patients to doctors and doctors to hospitals is no more or less logical or useful than the statement by the inventors of the Kevin Bacon game that they can assign a Kevin Bacon number to virtually any actor.

Elliott Fisher, shown here with Dartmouth Atlas founder Jack Wennberg, is credited with coining the phrase Accountable Care Organization.

By Kip Sullivan, October 2010

The “accountable care organization” (ACO) is the latest fad in American health policy. It remains an unknown concept to the vast majority of the public, including most doctors, but it is all the rage among health policy analysts as well as lawmakers who sit on heath policy committees in Congress and in state legislatures.

Although the assumptions used by ACO proponents to justify ACOs have been around since the dawn of the HMO movement, the ACO label is relatively new. It was invented late in 2006 during a discussion at a public meeting of the Medicare Payment Advisory Commission (Medpac). The seminal article announcing the concept appeared in December 2006. By 2009 the ACO had become so fashionable among congressional Democrats it was mentioned in all three draft health care “reform” bills prepared by Democrats during the first half of 2009 (two of those bills originated in the Senate and one, the Tri-Committee bill, was written in the House). The ACO movement’s crowning achievement to date is the inclusion of ACO provisions in the final “reform” legislation – the Patient Protection and Affordable Care Act (PPACA)

The Affordable Care Act created a new kind of “cooperative” health insurance arrangement heralded by supporters of health reform.  The co-ops were founded on the idealistic belief that community members could band together to create health insurance companies that would be member-driven, service-oriented, and would not have to answer to shareholders or turn a profit. But the 23 co-ops that were created had significant start-up costs, no experiential data upon which to set premiums, generally had to pay extra to lease physician and hospital networks, and had few people in the companies and none on their boards with insurance experience.  The idealism has quickly faded.  After receiving hundreds of millions of dollars in government start-up loans, most co-ops are surviving now on what remains of more than $2 billion in federal “solvency loans” and on the promise of future “shared risk” payments that are likely to produce only a fraction of the revenue co-ops have booked.

The History and Definition of the “Accountable Care Organization”

The definition of “ACO” bears a striking resemblance to the definition and history of “HMO,” a term coined in 1970. As was the case with the HMO, the ACO has been promoted primarily for its alleged value as a cost-cutting tool. Like the HMO concept, the ACO concept is vague and has multiple definitions which vary depending on who you ask. Like the HMO, the ACO is defined as an entity that will be “held accountable” for providing comprehensive health services to a defined population. As was the case with the HMO, “accountability” for cost will allegedly be achieved by shifting some or all of the insurance risk now born by insurance companies and public programs like Medicare to providers, and “accountability” for quality will allegedly be achieved by subjecting providers to report cards. 

The principle difference between HMOs and ACOs, at least for the foreseeable future, will be their size. Whereas HMOs, like most insurance companies, generally have enrollees in the hundreds of thousands, the ACO has so far been defined as having a much smaller number of enrollees, possibly as few as 5,000 (that’s the minimum number of Medicare beneficiaries who must be in an ACO according to PPACA’s Section 3022). The other major difference between HMOs and ACOs, at least for the near term, will be the extent to which they bear insurance risk. Whereas HMOs function like insurance companies (they bear 100 percent of the risk that the premiums they charge will not be enough to cover all necessary services for their enrollees), ACOs will bear little or no insurance risk for the first few years. However, judging from published papers by Elliot Fisher and other proponents of ACOs, proponents want ACOs eventually to bear all insurance risk, just as HMOs have.

ObamaCare Co-ops: Cause Célèbre or Costly Conundrum? 

By Grace-Marie Turner and Thomas P. Miller Overview     

Portions of this blog were taken from publications from PHNP, Physicians for a National Health Program 

Healtlh Care Collaboration and Kenneth Cohn, M.D.

I received an email at 2:45 AM PDT today.  It was a bit like a knock at the door with a message from an unknown person. "I regret to inform you, your colleague, Kenneth Cohn passed away prematurely at age 64.

I couldn't read the rest of my emails until just now, 2:45 PM.  After a pause I decided to write this blog in memory of Ken, and to offer solace to his  family close fellow workers,  well as the rest of us who remain largely unknown to Ken other than the replies to his blog and other writings.

Kenneth Cohn M.D.  had this huge data base in his mind, always searching for new data,  and did not need fancy analytics or algorithms to analyze health care.  He took it all in and then revealed 'out of the box' solutions.  He lived in one of the most challenging periods of health care.  It is one of those sea-changes when things happen so fast one is b arely able to adjust to a  change when another even more radical change occurs.

Some of us were swept away by the tsunami of government intrusions, managed care, reduced reimbursements and more. Others went with the flow, ending up higher on the beach, or sucked out to sea to swim for our lives. Kenneth did his  best to keep us afloat......what a battle it was.   He is in a far better place today. I hope he and his family did not suffer too long.

Thanks Ken for all the things you did for us.

In closing  here is the official announcement from Linda O'Brien



In Memoriam

Gary M. Levin M.D.

Post SCOTUS ruling on the Affordable Care Act

A recent survey (admittedly uncontrolled, and unscientific) reveals several types of reactions to  the SCOTUS ruling on the Affordable Care Act.

1. Apathy
2. Continuing resistance
3. Liberals who equate Obamacare with socialized medicine.

Nothing could be further from the truth.  Apathy amongst providers is growing. Too much energy and time are involved fighting this battle for patients, which detracts time and energy from direct patient care.

Republicans                 Democrats                                

The Republican party has wasted much time and effort attempting to tear down the  Obamacare Wall by removing a tiny  cindereblock from the foundation.

The major problem with Obamacare is not the tax credit issue.

Blindly offering insurance coverage and access by politicians intent upon gaining political influence, and/or election is a great disservice to the American voter.  The internal workings of the American health system are overshadowed by HHS, Medicare, and Medicaid rulings which at times overrule the workings of the private sector.

As recently as 1965 governmental intrusion into health care was minimal.  Over the next 50 years involvement grew exponentially as Americans lined up for their 'entitlements'. As it grew, freedom of choicde gradually eroded.

President Obama now claims the Affordable Care Act is "the law of the land", much like he promised, "If you like your doctor, you can keep your doctor".  The truth is quite the opposite.  This one lie disenchanted any intelligent voter. He lied about that, and about the influence of Jonathan Gruber on the construction of the Affordable Care Act.  Obama lined up with Gruber and his statement about the American Voter being too stupid to  understand the law.

The lingering problem is that many Americans are ignorant how medical care is financed, and the insatiable appetite for  health  care...there is never enough.

In the long run SCOTUS' ruling will not mean much when the law is deconstructed and heavily amended.  It will require intellligent minds who are grounded in patient care and health administration, keeping it paitent and provider centered.

SCOTUS and the Affordable Care Act

As Yogi Berra said, "It ain't over until it's all over"

Any baseball fan can quote this fundamental Yogi Berra-ism. Berra was a famous catcher for the New York Yankees in the 1950s and 60s. I was a diehard Yankee fan during an era when they won  7 straight world  series, a feat yet to be duplicated in the 'modern era'.

it will be along time before ObamaCare and it's influence can be duplicated, nor produce a more disruptive, controversial law.

SCOTUS'  decision is far from ending the dispute about the Affordable Care Act.  Out of desperation the  GOP has focused it's effort to negate the entire law.  This is a fundamental flaw in the game to unravel the law.

Today there are many opinions from health reform pundits and politicians about what the SCOTUS ruling means.

No, Obamacare Isn't Any More 'Here To Stay' Than It Was Before The Supreme Court Decision 

Avik Roy
Forbes, 6/26/15

 “In a statement after the decision, President Obama declared that his signature health law is “here to stay.” But in his remarks, the President knowingly ignored the key concept in the case: that if the challengers had won, not one word of the law called the “Affordable Care Act” would have been changed. On the other hand, if voters elect a Republican President and a Republican Congress in 2016, quite a bit will change.”

Most Americans aren’t signing up for Obamacare

For the people that Obamacare claims to help—those who shop for coverage on their own—an analysis by the Manhattan Institute found that the law increased individual-market premiums by 49 percent in the average county, in its first year alone. Since, then many states are facing additional double-digit rate hikes.

The Case Against Obamacare: An eBook From Forbes 
Make no mistake. The new health law has disrupted coverage for millions, and driven up costs for millions more.

It shows that as a percentage of those eligible for Obamacare’s subsidies, only those near poverty—with incomes between 100 and 150 percent of the Federal Poverty Level—are signing up in large proportion. That’s because for them, taxpayers are subsidizing nearly all of the cost of their coverage. As you go up the income scale, Obamacare’s subsidies aren’t large enough to make up for the law’s steep premium hikes. This is exactly what I and my Manhattan Institute colleagues were concerned about when we first started writing about Obamacare’s “rate shock” problem.

Indeed, the vast bulk of Obamacare’s increase in health insurance “coverage” comes from its expansion of Medicaid. Medicaid is so dysfunctional that it has been shown to have “no significant effect” on health outcomes, relative to having no insurance at all.

Insurers will continue to announce premium hikes, and states will continue to struggle to fund roads and schools, as Medicaid eats up more and more of their budgets. Obamacare will remain unpopular.

And if voters elect a Republican President in 16 months, it will be elected officials—not the Supreme Court—who will be rewriting the law.

Bill Would Force Supreme Court to Enroll in Obamacare

A House Republican on Thursday proposed forcing the Supreme Court justices and their staff to enroll in ObamaCare. ....

King v Burwell Decision Teaches Sad Lesson in Law Making

(John Lynn) from EMR & HIPAA

In case you’re living under a hole (in the healthcare world we call that in the middle of an EHR implementation), the Supreme Court ruled on King v Burwell today. You can read the 47 page document here if you’re interested in the details of the decision. If you’ve ever read a Scalia decision or dissent, then you’ll know what to expect in his dissenting comments.

The Anti-Constitutional Consequences of King v. Burwell

Roberts gets it wrong -- Again from National Review Online

The Affordable Care Act was drafted with extraordinary carelessness given its importance, and conservatives who say that the Obama administration has implemented it contrary to its plain meaning have strong arguments. So opined six justices of the Supreme Court, including its most liberal members, in King v. Burwell. 

Read more at:

Supreme Court Upholds Obamacare Subsidies, President Says ACA 'Is Here to Stay' - ABC News

Supreme Court Upholds Obamacare Subsidies, President Says ACA 'Is Here to Stay' - 

The Supreme Court today voted 6-3 to uphold subsidies to states who do not operate their own health insurance exchange, thereby strengthening the market place across the United States.

Congress, overwhelmingly Democratic wrote a flawed law, the Affordable Care Act, poorly written and conceived will for the time being remain intact.

The vote is seen as a win for President Obama and the Affordable Care Act, and some say this will insure the survival of the law after 2016.  Republicans remain adamantly opposed to the law.  However Republican Governors can breathe a sigh of relief knowing that their  state constiuents will qualify for federal  subsidies.

The questionable wording is buried in the lengthy 1200 page law, most of which was not read by Congress.  As Nancy Pelosi  predicted, "We won't know what is in it until we pass it"

The wording, "established by the state"  appears ten (10) times in the law, found by this author in the certified text of the Affordable Care Act.

No one seems to have specified this wording in the law. The closest wording found:   (Section 1311)

(2) ELIGIBLE INDIVIDUALS MAY NOT USE EX-
12 CHANGE.—An eligible individual shall not be treated
13 as a qualified individual under section 1312 eligible
14 for enrollment in a qualified health plan offered
15 through an Exchange established under section 1311. 

Was it congress' intent to obfuscate it's plan to insure all Americans? The Supreme Court's Opinion is "YES"  firmly establishing the Affordable Care Act as the law of the land.

.

Health Information Technology: Are we facing another bubble ?

U.S. Technology Funding -- What's Going On? from a16z

Some are comparing today's hot market in HIT to the Internet bubble of 1999.  However there are some significant differences.

The beauty here is its attempt to understand an organic phenomenon. IMO, it's also useful to look at the underlying drivers of (aka, incentives attributable to) that phenomenon. Today's large, "mature," post-IPO firms (Cisco, Apple, Microsoft, Ellie Mae, Intel, just to name a few) do less of their development in-house and rely more on the startup factories to generate new ideas; then the M&A engine kicks in to liquidate and (hopefully) integrate the new ideas. Sadly, most of these large(r) firms are saddled with un-innovative, un-inspired, un-inspiring, and sadly conventional senior managers, hence old thinking. It's too far a cry from the erstwhile "intra-preneuring" of the 70s and 80s to get to market relevancy, aka traction, while the market is still fertile and competitors sitting on laurels. Thanks for sharing this analysis.

Survey: Few Providers Discuss Wearables, Mobile Apps With Patients - iHealthBeat

Survey: Few Providers Discuss Wearables, Mobile Apps With Patients - iHealthBeat



Few health care providers are discussing wearable devices or mobile health applications with their patients, even though they believe the technology could be beneficial, according a MedPanel market survey of 415 providers, Health IT Analytics reports (Bresnick, Health IT Analytics, 6/22).

The researchers also found that providers are only somewhat satisfied with the products currently on the market. MedPanel suggested that the responsibility to boost mobile health use falls on vendors, who can improve their products to make them more appealing to providers (Health Data Management, 6/22).

For instance, a product that could integrate mobile health data directly with an electronic health record system in a way that supports productive workflow could boost mobile health recommendations among providers, according to the study.

• 38% of patients who are not using a wearable device could benefit from such technology; and
• 42% of patients who are not using a mobile health app could benefit from such technology (Health IT Analytics, 6/22).

A  key factor in adoption will be classification of the wearable as durable medical equipment and with FDA approval...........a difficult bridge to cross.

Big Gaps in How Medical Schools Are Preparing Students To Use EHRs - iHealthBeat

Big Gaps in How Medical Schools Are Preparing Students To Use EHRs - iHealthBeat

Electronic health records are a key part of practicing medicine today.

However, there's no national standard for how medical students should be trained on EHRs.

Practicing medicine today means interacting not just with patients, but also with
computers. As of 2013, nearly 80% of office-based physicians were using electronic
health records. But medical schools have been slow to keep up with the trend.
There's no national standard yet for how med students should be trained on EHRs.
Some are using computer systems from day one of their education. While others
may be forced to sink or swim once they start to practice.

Transcript of Audio Report 

Health insurer Cigna rejects Anthem takeover bid - Modern Healthcare

Health insurer Cigna rejects Anthem takeover bid - Modern Healthcare



(Modern Healthcare)



Health insurer Cigna Corp. has rejected a $47 billion offer to be acquired by Anthem, a larger rival, saying the terms of the bid are inadequate and "woefully skewed in favor of Anthem shareholders."



Cigna's sharply worded rejection came just one day after Anthem went public with its cash-and-stock offer, which amounts to about $184 for each Cigna share or about an 18% premium on Cigna's closing stock price on Friday.



The proposed deal would make Anthem an even bigger giant in an industry that many see as ripe for consolidation, as insurers struggle to cut costs in the face of new regulations and technological advances. Anthem has said the combined companies would have annual revenue of more than $115 billion and provide insurance for about 53 million people.



Insurers view the increased scale as a primary way to boost earnings and diversify their products. The Affordable Care Act caps health insurance profits as a percentage of premium revenue. The insurers, along with some independent observers, also argue that getting bigger will enable them to leverage lower prices from providers, drugmakers and other industry players, thus saving money for employers and consumers. 



"How big is big enough ? "



Any insurance mergers almost certainly would face rigorous antitrust scrutiny from the U.S. Justice Department because of the colossal sizes of companies involved and the multistate impact. The Obama administration in the past has been critical of insurers' premium increases, and rate increases by bigger new entities could jeopardize the administration's cost-control efforts under healthcare reform.

Health insurer Cigna rejects Anthem takeover bid - Modern Healthcare

Health insurer Cigna rejects Anthem takeover bid - Modern Healthcare



(Modern Healthcare)



Health insurer Cigna Corp. has rejected a $47 billion offer to be acquired by Anthem, a larger rival, saying the terms of the bid are inadequate and "woefully skewed in favor of Anthem shareholders."

Cigna's sharply worded rejection came just one day after Anthem went public with its cash-and-stock offer, which amounts to about $184 for each Cigna share or about an 18% premium on Cigna's closing stock price on Friday.

The proposed deal would make Anthem an even bigger giant in an industry that many see as ripe for consolidation, as insurers struggle to cut costs in the face of new regulations and technological advances. Anthem has said the combined companies would have annual revenue of more than $115 billion and provide insurance for about 53 million people.



Insurers view the increased scale as a primary way to boost earnings and diversify their products. The Affordable Care Act caps health insurance profits as a percentage of premium revenue. The insurers, along with some independent observers, also argue that getting bigger will enable them to leverage lower prices from providers, drugmakers and other industry players, thus saving money for employers and consumers. 



"How big is big enough ? "



Any insurance mergers almost certainly would face rigorous antitrust scrutiny from the U.S. Justice Department because of the colossal sizes of companies involved and the multistate impact. The Obama administration in the past has been critical of insurers' premium increases, and rate increases by bigger new entities could jeopardize the administration's cost-control efforts under healthcare reform.

Averting the Ax at AHRQ | The Health Care Blog

Averting the Ax at AHRQ | The Health Care Blog

House fails to fund AHRQ....

U.S. Congress chooses between social security and health quality organization.





An example of an AHRQ report:

Comparative Effectiveness Reviews are systematic reviews of existing research on the effectiveness, comparative effectiveness, and harms of different health care interventions. They provide syntheses of relevant evidence to inform real-world health care decisions for patients, providers, and policymakers. Strong methodologic approaches to systematic review improve the transparency, consistency, and scientific rigor of these reports. Through a collaborative effort of the Effective Health Care (EHC) Program, the Agency for Healthcare Research and Quality (AHRQ), the EHC Program Scientific Resource Center, and the AHRQ Evidence-based Practice Centers have developed a Methods Guide for Effectiveness and Comparative Effectiveness Reviews. This Guide presents issues key to the development of Comparative Effectiveness Reviews and describes recommended approaches for addressing difficult, frequently encountered methodological issues.

The Methods Guide for Comparative Effectiveness Reviews is a living document, and will be updated as further empiric evidence develops and our understanding of better methods improves. Comments and suggestions on the Methods Guide for Effectiveness and Comparative Effectiveness Reviews and the Effective Health Care Program can be made at www.effectivehealthcare.ahrq.gov.

This document was written with support from the Effective Health Care Program at AHRQ.

AHRQ Master Index

For Patients and Consumers

For Professionals

For Policy Makers

Health Train Express recommends readers review the AHRQ Master Index for an overall view of what and how AHRQ spends it's money.  What is your opinion on how de-funding AHRQ will effect health care ?  Is it a duplication of other organizations that perform similar if not identical tasks?

The Affordable Care Act is stimulating the growth of other needless and reduncant health organizations focused on outcomes, safety and quality of care.