If they insist on stealing from health care to pay for renewing tax breaks for corporations and the wealthy, they should go where the money is -- in Medicare Advantage
Let me start off by saying that there is no fig leaf large enough to hide the embarrassment of excessive payments to Medicare Advantage plans. Between risk adjustment and the Stars bonus payments, it has gotten to be too much.
Let me also color in some important insights to temper the outrage a little. By comparing Medicare Advantage with Original Medicare payments, we miss the important fact that they are oranges and apples. In Original Medicare, physicians are paid on a fee for service basis where the all important input is the Current Procedural Terminology (CPT) codes, a universal language for identifying medical services and procedures. They are used by healthcare providers to report services to insurance companies. Physician practices aim to report these to the highest degree of accuracy. They must be accompanied by at least one diagnostic code that agrees with the procedure, no more than this minimum.
Under Medicare Advantage programs, the health plan must report the most accurate and comprehensive list of diagnoses (ICD-10 codes) along with a qualifying CPT code. This is the inverse of Fee for Service Medicare. The reason for this is that the flat monthly payment rates to the Medicare Advantage plans is adjusted based on the severity and complexity of health conditions and co-morbidities.
These two parallel worlds (Fee for service Medicare versus Medicare Advantage) produce very different burdens of illness: fee for service severely under-reports because it does not affect payment levels, while the opposite is true for Medicare Advantage. Therefore, if two Medicare patients with exactly the same objective diagnostic burdens of illness are compared, you will see under-reported diseases in fee for service, even though they may be under treatment for the same things. Unless we compensate physicians in the exact same manner, we will always see different burdens of disease reported.
The trouble with Medicare Advantage begins when potential diagnoses begin to be reported that are not actually being treated or monitored by the physician, the diagnostic code creep happens that artificially inflates risk scores and Medicare Advantage payments. This is why risk adjustment validation audits (RADV) are conducted: to identify and penalize Medicare Advantage plans that abuse or are careless in their reporting of ICD-10 codes. It is likely that some MA plans intentionally game the system.
The HHS OIG has been ramping up efforts to prosecute these offenders. However, now that the new administration has sacked all the OIGs, it will be a serious setback to this policing effort. I worry that without anyone watching over the RADV efforts, bad things may continue.
Excellent description of why coding varies in the two sides of the program. But the important thing to remember about the study I covered in this post is that it relied on neither Medicare FFS or Medicare Advantage coding to determine disease states. It looked at the NHANE survey by the CDC, which conducts independent clinical tests of key indicators of beneficiary health. It then cross-checked that data with the surveyed beneficiaries Medicare status (were they in FFS or MA?). The study authors were allowed to do that by agreeing to protocols that allow them access to that information in exchange for maintaining individuals' privacy. So this is a study based on actual health status, not coded medical conditions, which are prone, as you note, to under reporting in FFS and over reporting in MA.
Merrill, sure, the economics of cutting back Medicare Advantage over payments is very clear. However the politics are difficult. Cutting the MA payments could backfire on politicians who vote for it, including Democrats. I have been watching MA since it's inception and was worried from the beginning that it would be attractive to Medicare participants. And as we have seen these plans are, in fact, very popular and now cover a majority of Medicare members. Not all of the over payments to to insurance company profits. A substantial amount of the cash benefits the participants in terms of lower premiums (even zero!), the inclusion of prescription drugs, and sweeteners like dental and vision. If MA plans were paid less, what would they do? Take less in profits??? The question answers itself. The MA participants would be threatened with higher premiums and reduced benefits and turned loose on their Congresspeople! Politically who would try this? The Democrats! Who would be blamed?
A better long-term approach would be to raise taxes on the rich to improve traditional Medicare to the point that it was attractive. Eliminate cost sharing so there is no need for Supplemental Plans. Expand benefits to include dental, vision, hearing. And lower the Medicare eligibility age to 60. And regulate the profit of the MA insurers. They can be private, but they have to be regulated!
This puts the Democrats on the side of all retirees and against profiteering insurance companies.
Sadly, the MAGA strategy of DEMONIZE, DOWNSIZE, then PRIVATIZE seems to be working thus far, although resistance finally is building. It's too bad that there is no simple way to demonstrate to the MAGAts that the vaunted enactment of privatized Medicare Advantage to provide more cost-effective care than original Medicare actually costs billions more.
So many discussions of health care leave out Kaiser, of which I have been a lifetime member and am now in Kaiser Medicare Advantage. Does this same problem of upcoding and over-billing exist for Kaiser? I have had comprehensive coordinated and preventive care, unlike many of my non-Kaiser friends, including some serious cancer treatment. I'm sure Kaiser is large enough that it has separately negotiated agreements with Medicare, but wonder if dialing down on Medicare Advantage would cause problems for Kaiser. This narrow self-interested question is a reflection the intelligent comment below which notes the political problem of cutting "waste, fraud and abuse" out of Medicare Advantage--would the impacts be taken out on the clients or the insurance companies? As the comment notes, the question probably answers itself. When I look at the proposed $880 billion taken out of healthcare and the impacts on the states of likely Medicaid cuts, the approach here makes perfect sense. When I think about my own care at Kaiser, not so much...
The whole problem with our medical system is fee-for-service, for profit medicine. It is not that way in any other industrial democracy. It has been estimated by actuaries that we overpay for medical care by a huge margin and leave a significant part of the population uncovered. We could likely get excellent care for everyone for about 60% of what we pay for just the insured now. But, no no no, the business interests have the rethugs convinced they would be worse off… because ‘government’. We have the highest morbidity and lowest life expectancy of any of the industrial democracies…
Let me start off by saying that there is no fig leaf large enough to hide the embarrassment of excessive payments to Medicare Advantage plans. Between risk adjustment and the Stars bonus payments, it has gotten to be too much.
Let me also color in some important insights to temper the outrage a little. By comparing Medicare Advantage with Original Medicare payments, we miss the important fact that they are oranges and apples. In Original Medicare, physicians are paid on a fee for service basis where the all important input is the Current Procedural Terminology (CPT) codes, a universal language for identifying medical services and procedures. They are used by healthcare providers to report services to insurance companies. Physician practices aim to report these to the highest degree of accuracy. They must be accompanied by at least one diagnostic code that agrees with the procedure, no more than this minimum.
Under Medicare Advantage programs, the health plan must report the most accurate and comprehensive list of diagnoses (ICD-10 codes) along with a qualifying CPT code. This is the inverse of Fee for Service Medicare. The reason for this is that the flat monthly payment rates to the Medicare Advantage plans is adjusted based on the severity and complexity of health conditions and co-morbidities.
These two parallel worlds (Fee for service Medicare versus Medicare Advantage) produce very different burdens of illness: fee for service severely under-reports because it does not affect payment levels, while the opposite is true for Medicare Advantage. Therefore, if two Medicare patients with exactly the same objective diagnostic burdens of illness are compared, you will see under-reported diseases in fee for service, even though they may be under treatment for the same things. Unless we compensate physicians in the exact same manner, we will always see different burdens of disease reported.
The trouble with Medicare Advantage begins when potential diagnoses begin to be reported that are not actually being treated or monitored by the physician, the diagnostic code creep happens that artificially inflates risk scores and Medicare Advantage payments. This is why risk adjustment validation audits (RADV) are conducted: to identify and penalize Medicare Advantage plans that abuse or are careless in their reporting of ICD-10 codes. It is likely that some MA plans intentionally game the system.
The HHS OIG has been ramping up efforts to prosecute these offenders. However, now that the new administration has sacked all the OIGs, it will be a serious setback to this policing effort. I worry that without anyone watching over the RADV efforts, bad things may continue.
Excellent description of why coding varies in the two sides of the program. But the important thing to remember about the study I covered in this post is that it relied on neither Medicare FFS or Medicare Advantage coding to determine disease states. It looked at the NHANE survey by the CDC, which conducts independent clinical tests of key indicators of beneficiary health. It then cross-checked that data with the surveyed beneficiaries Medicare status (were they in FFS or MA?). The study authors were allowed to do that by agreeing to protocols that allow them access to that information in exchange for maintaining individuals' privacy. So this is a study based on actual health status, not coded medical conditions, which are prone, as you note, to under reporting in FFS and over reporting in MA.
Merrill, sure, the economics of cutting back Medicare Advantage over payments is very clear. However the politics are difficult. Cutting the MA payments could backfire on politicians who vote for it, including Democrats. I have been watching MA since it's inception and was worried from the beginning that it would be attractive to Medicare participants. And as we have seen these plans are, in fact, very popular and now cover a majority of Medicare members. Not all of the over payments to to insurance company profits. A substantial amount of the cash benefits the participants in terms of lower premiums (even zero!), the inclusion of prescription drugs, and sweeteners like dental and vision. If MA plans were paid less, what would they do? Take less in profits??? The question answers itself. The MA participants would be threatened with higher premiums and reduced benefits and turned loose on their Congresspeople! Politically who would try this? The Democrats! Who would be blamed?
A better long-term approach would be to raise taxes on the rich to improve traditional Medicare to the point that it was attractive. Eliminate cost sharing so there is no need for Supplemental Plans. Expand benefits to include dental, vision, hearing. And lower the Medicare eligibility age to 60. And regulate the profit of the MA insurers. They can be private, but they have to be regulated!
This puts the Democrats on the side of all retirees and against profiteering insurance companies.
Sadly, the MAGA strategy of DEMONIZE, DOWNSIZE, then PRIVATIZE seems to be working thus far, although resistance finally is building. It's too bad that there is no simple way to demonstrate to the MAGAts that the vaunted enactment of privatized Medicare Advantage to provide more cost-effective care than original Medicare actually costs billions more.
So many discussions of health care leave out Kaiser, of which I have been a lifetime member and am now in Kaiser Medicare Advantage. Does this same problem of upcoding and over-billing exist for Kaiser? I have had comprehensive coordinated and preventive care, unlike many of my non-Kaiser friends, including some serious cancer treatment. I'm sure Kaiser is large enough that it has separately negotiated agreements with Medicare, but wonder if dialing down on Medicare Advantage would cause problems for Kaiser. This narrow self-interested question is a reflection the intelligent comment below which notes the political problem of cutting "waste, fraud and abuse" out of Medicare Advantage--would the impacts be taken out on the clients or the insurance companies? As the comment notes, the question probably answers itself. When I look at the proposed $880 billion taken out of healthcare and the impacts on the states of likely Medicaid cuts, the approach here makes perfect sense. When I think about my own care at Kaiser, not so much...
Who is Willie Sutton?
A infamous criminal who when asked why he robbed banks, replied: “because that’s where the money is.”
Made all the more humorous by him denying he said it in one of his autobiographies.
The whole problem with our medical system is fee-for-service, for profit medicine. It is not that way in any other industrial democracy. It has been estimated by actuaries that we overpay for medical care by a huge margin and leave a significant part of the population uncovered. We could likely get excellent care for everyone for about 60% of what we pay for just the insured now. But, no no no, the business interests have the rethugs convinced they would be worse off… because ‘government’. We have the highest morbidity and lowest life expectancy of any of the industrial democracies…