What's Happening?
The Alliance of Community Health Plans (ACHP) has proposed a significant overhaul of the risk adjustment process in Medicare Advantage (MA) to combat upcoding and gamesmanship by major insurers. ACHP, representing community-based health insurers, released data indicating that national plans like UnitedHealthcare and Humana have higher risk scores compared to ACHP members, suggesting exploitation of system complexities. UnitedHealthcare's risk scores were 36.2% higher, while Humana's were 19.2% higher than ACHP insurers. ACHP argues these discrepancies are not due to sicker patients but rather system manipulation, impacting taxpayers and seniors. The organization suggests reducing the number of condition categories from 115 to about 10-12, focusing on key demographic and substantiated conditions. This proposal aims to simplify the risk model and reduce opportunities for gaming.
Why It's Important?
The proposed changes by ACHP are crucial as they address longstanding concerns about upcoding in the Medicare Advantage program, which has financial implications for taxpayers and affects the quality of care for seniors. By streamlining the risk adjustment process, ACHP aims to close the gap between large national insurers and regional nonprofit health plans, ensuring fairer distribution of funds. This could lead to more resources being allocated to patient care rather than marketing and administrative costs. The proposal also highlights the need for targeted audits rather than broad oversight, potentially leading to more effective identification of outliers and bad practices in the industry.
What's Next?
The ACHP has engaged in discussions with the Centers for Medicare & Medicaid Services (CMS), receiving positive feedback on their proposal. The CMS plans to conduct risk adjustment data validation audits of all MA companies, but ACHP suggests a more focused approach. If adopted, ACHP's streamlined model could reshape the risk adjustment landscape, reducing opportunities for manipulation and ensuring a more equitable system. Stakeholders, including policymakers and insurers, will likely continue to debate the best methods for implementing these changes, with potential impacts on regulatory practices and industry standards.
