Managed Care - January 2008 - (Page 45) change. CMS has stated that the Medicare Modernization Act is a budget-neutral program. Total premiums distributed to participating Medicare Advantage plans will not be allowed to increase under the HCC payment system. How the premium dollars are divided among the plans will, however, change dramatically. Profitability There is a lot of money at stake. Al Lewis, president of the Disease Management Purchasing Consortium, says, “Average plans are leaving significant revenue on the table by not providing CMS with a complete and accurate listing of ICD-9 codes. When payments from the government are only increasing 2 percent to 4 percent per year and hensive reviews, they can look at a member’s medications more rationally and see which medications are really needed and which are not. After all, more drugs mean higher risk of adverse effects, higher potential for medication errors, and an increased risk of negative drug interactions. Fewer unnecessary and inappropriate drugs means lower costs. Effective plans will also identify ways to reach out to members who see a physician only when they have a crisis. Bringing these members into the fold will not only improve their health status but also will provide the plan with accurate risk profiles. Furthermore, these members will become less likely to utilize costly emergency services. For plans that have already implemented an HCC strategy, that strategy will require constant “Coding is 10 times as important as disease management, yet plans are probably spending 10 times as much on disease management as on coding,” says Al Lewis of the Disease Management Purchasing Consortium. medical costs are increasing at a much greater rate, plans must improve the coding of members to remain financially viable.” Plans that focus on cost-management strategies such as disease management and ignore the need for income management in the form of an effective HCC strategy are missing the big picture. “Best practices in a disease management program can save perhaps $200 per high-risk Medicare life,” Lewis explains. “Yet from a coding perspective, these plans are often paid $2,000 less than they should be paid for these members because of under-reporting of ICD-9 codes. So, coding is 10 times as important as disease management, yet plans are probably spending 10 times as much on disease management as on coding.” In addition to increasing their revenue, plans that embrace an HCC strategy are likely to achieve better outcomes. By using rigorous and comprehensive health assessments, members with underlying health conditions stand a greater likelihood of those conditions being identified. They can then be channeled into proper disease management programs. Members taking several medications are also more likely to get the attention they need to address their polypharmacy risks when coding has been addressed. As physicians complete more compreevaluation, regular modification, and lots of training. For plans that have chosen a “wait and see” approach, now is the time to act. Given the uncertainty of future premiums and escalating medical costs, it is critical for plans to be paid properly for their membership. Implementation There are two phases to creating a solid strategy. The first is the retrospective phase, whereby the plan utilizes sophisticated algorithms to find unreported diagnosis codes by searching through medical charts. This involves pulling large numbers of charts from physician offices to secure codes that have not been submitted to CMS. The second phase is the prospective phase. Plans train physicians in their network to provide complete and accurate lists of all relevant ICD-9 codes for each member encounter. This approach improves the plans’ ability to capture accurate data and eliminates the need for expensive retrospective chart reviews in the future. In the retrospective phase, a plan can become overwhelmed by the tedious nature of reviewing large numbers of medical charts. Therefore, it is important to stratify the population from highest risk to lowest risk, from an HCC perspective. According to Lewis, “Approximately 6 percent of JANUARY 2008 / MANAGED CARE 45
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