Medicare Advantage Chart Reviews Are Associated With Billions in Additional Payments for Some Plans
Medical Care
February, 2021
By David J. Meyers and Amal Trivedi.  

From the Abstract: 

Background: In the Medicare Advantage (MA) program, private plans receive capitated payments that are adjusted based on their enrollees’ number and type of clinical conditions. Plans have the ability to review charts to identify additional conditions that are not present in claims data, thereby increasing risk-adjusted payments.. . .

Results: Chart reviews were associated with a $2.3 billion increase in payments to plans, a 3.7% increase in Medicare spending to MA plans. Just 10% of plans accounted for 42% of the $2.3 billion in additional spending attributed to chart review. Among these plans, the relative increase in risk score from chart review was 17.2%. For-profit plans engaged in chart reviews substantially more frequently than nonprofit plans.

Comment by David Himmelstein and Steffie Woolhandler

It’s long been known that Medicare Advantage (MA) plans selectively recruit low-cost Medicare enrollees and evict the expensively-ill, such as those who require nursing home care. As a result, Medicare pays MA plans 4% more than it would cost to care for their patients in the traditional Medicare program.

In response, CMS has tried to risk adjust MA plan premiums based on patients’ diagnoses. MA plans have counter-attacked by pressing clinicians to more assiduously code every diagnosis that might raise the risk score. That’s entirely legal. But this study shows that they’ve  gone even further than that, combing through patients’ medical records for possible indicators of diagnoses that physicians never entered as actual diagnoses. So if, for instance, a doctor never mentioned renal failure, but noted a slightly high creatinine level on one blood test (which might have come down on a subsequent test), that might trigger an MA plan to claim the extra payment for renal failure.

After 40 years of unsuccessful attempts to rein-in MA plans’ profit-driven efforts to cheat the taxpayers, it’s time to end the MA program and return to fully public Medicare. 

Comment by Jim Kahn

On the 4^th of July, my thoughts turn to our system of governance, as it relates to health reform.

Our democracy is under siege. First, the President who lost his re-election bid tried to retain power by claiming he won and fomenting a coup. Crisis averted, barely. The vast majority of GOP officials still support this “big lie” about the election. Then, in June, a Democratic Senator – Joe Manchin of W. Virginia – published an op-ed declaring his fealty to the filibuster (anti-majority) and bipartisanship (a myth) over voting rights. This would allow GOP-controlled swing states to selectively disenfranchise Democrats, especially poor people of color living in big cities. Subsequently, Manchin expressed support for a scaled-back but still strong voting rights bill. Encouraging. Last week, the U.S. Supreme Court upheld state laws that manipulate voting rules in ways that will likely selectively disenfranchise blacks, relying on a 6-3 conservative majority enabled by Mitch McConnel’s abandonment of long-standing norms regarding Supreme Court appointments. Worrisome. The future of voting bills and rights – with implications for 2022 Congressional midterms and Biden’s ability to govern – will play out later this month. These events are thoroughly and thoughtfully chronicled by Heather Cox Richardson in Letters from an American. I also recommend Paul Krugman’s forceful take-down of the GOP’s thorough abandonment of reality in favor of ideology and self-interest. Dire challenges loom for democracy.

So what does this have to do with single payer financing of health care?

A lot, actually. The parallels are numerous. For today’s blog, I offer a list. If you care to suggest others, please reply to the email or add comments on the website. In future posts, I’ll delve into specific issues.

Democracy and single payer …

• Both honor human rights, highlighting human dignity – the ability to participate in collective decisions, and the right to healthcare and health.
• Both foster equality – everyone is treated the same. No preferential voice, no preferential care. Nobody excluded.
• Both reflect and strengthen community values – society working collectively to address important decisions and solutions.
• Both honor majority rule – fair voting to maximize the right and ability to cast ballots, and adoption of a health care financing approach favored by most Americans.
• Both use simplicity to achieve performance & efficiency – one straightforward, unconvoluted set of rules for everyone, simplifying and maximizing access.
• Both reduce manipulation of the system for gain by those in control – by requiring neutral voting rules and eliminating exorbitant profits from the provision of health.
• Both recognize that some societal functions are most efficiently and effectively accomplished by government agencies –e.g., fairly designed and enforced voting, and financing for essential services like health care.

I think I always knew intuitively that single payer is profoundly democratic. Now I’m beginning to understand the details.

Finally, the day-to-day struggles for both causes are linked:

Empowering the maximum number of people with the vote will bolster the prospects for single payer. Because voters – especially those the GOP is trying to exclude – support single payer. And achieving single payer will build commitment to progressive, democratic values, and showcase the advantages of a benevolent government. Linking the battles may prove synergistically enabling, helping achieve both worthy causes.

Enjoy the holiday weekend, and next week let’s all dig in again to fight for justice in democracy and health care.

Impact of High-Deductible Health Plans on Emergency Department Patients With Nonspecific Chest Pain and Their Subsequent Care
Circulation
June 2021
By Shih-Chuan Chou et al

Methods: Using a commercial and Medicare Advantage claims database, we identified members 19 to 63 years old whose employers exclusively offered low-deductible (≤$500) plans in 1 year, then, at an index date, mandated enrollment in HDHPs (≥$1000) for a subsequent year. We matched them with contemporaneous members whose employers only offered low- deductible plans. Primary outcomes included population rates of index ED visits with a principal diagnosis of nonspecific chest pain, admission during index ED visits, and index ED visits followed by noninvasive cardiac testing within 3 and 30 days, coronary revascularization, and acute myocardial infarction hospitalization within 30 days. Members from higher-poverty neighborhoods were a subgroup of interest.

From Discussion: The contrasting findings between members from neighborhoods of different poverty levels merit particular attention. After HDHP switches, members from lower-poverty neighborhoods reduced invasive procedures after nonspecific chest pain ED visits without changes in ED visits for nonspecific chest pain, hospitalizations, non-invasive testing, or AMI admissions. However, members living in higher-poverty neighborhoods reduced non-specific chest pain ED visits, disproportionately reduced hospitalizations from index ED visits, and significantly increased AMI hospitalization in 30 days after index ED visits. Our findings support that, although HDHPs can reduce potentially low-value acute care among those with higher socioeconomic status, the disproportionate financial pressure from high out-of-pocket costs on lower-income populations appears to lead to unintended consequences with potentially negative health implications.

There is growing evidence that exposing low socioeconomic status populations to high cost-sharing leads to the deferral of appropriate care.

What Is New?

High deductible health plan enrollment was associated with increased 30-day acute myocardial infarction rate after emergency department visits for nonspecific chest pain among patients living in neighborhoods with higher poverty rates.

Comment by Don McCanne

Keep in mind that high deductibles are a tool used by private insurers to discourage patients from obtaining health care that the insurer might have to pay for. It is a profit-motivated business tool and not a tool to provide assistance to a patient in obtaining beneficial health care. It especially negatively impacts those with greater financial needs. Of note, this study evaluated private commercial and Medicare Advantage plans and not patients in the public Medicare program which avoids high deductibles (though even modest deductibles may be a hardship for those of limited financial means).

In this study of emergency department patients presenting with chest pain, it was found that those with low socioeconomic status who had high deductibles “reduced non-specific chest pain ED visits” and “significantly increased acute myocardial infarction hospitalization in 30 days after index ED visits.” They conclude, “the disproportionate financial pressure from high out-of-pocket costs on lower-income populations appears to lead to unintended consequences with potentially negative health implications.”

We can conclude that “potentially negative health implications” from deferred diagnosis of acute myocardial infarctions includes the potential for death. Since the delays were due to high deductibles, we can further conclude that high deductibles used by private health plans kill people.

We don’t need high deductibles, and we certainly don’t need expensive private insurers who use them to create more wealth for themselves at a cost of providing optimal patient service. After many decades, their profit-maximizing behavior only grows worse. Time to replace them with a single payer improved Medicare for All – no profits, just patient service.

Desperate for Covid Care, Undocumented Immigrants Resort to Unproven Drugs
New York Times
June 20, 2021
By Amy Maxmen

“It’s disappointing but not surprising” that people living below the poverty line have spent large sums of money for unproven treatments for Covid-19, said Rais Vohra, the interim head of Fresno County’s health department. “People are desperate and bombarded with misinformation and may not have the skills, time or context to interpret medical evidence.”
…

During the pandemic, many immigrants shut out of mainstream health care have turned to such markets for Covid-19 treatments. About 20 percent of Hispanic people in the United States lack health insurance, and the proportion is far higher among undocumented immigrants.

What’s more, some immigrants mistrust doctors who don’t speak their language or who treat them curtly — and those concerns have been amplified by harsh political rhetoric directed at Mexicans and Central Americans.
…

“My community fears that the government might be trying to get rid of us,” said Oralia Maceda Méndez, an advocate at a Fresno-based community group for Indigenous people from Oaxaca, Mexico. She has heard many stories from immigrants in her community who treat themselves for Covid-19 with penicillin, other antibiotics or a mix of vitamins and herbal therapies bought from shops or travelers selling medications bought in Mexico.

“I am not surprised that people are taken advantage of,” she said. “We don’t have the care we need.”

Comment by Eagan Kemp

Barring undocumented immigrants and workers from getting health care is cruel and inhumane. As the cited NYT article notes, the COVID-19 crisis has further exacerbated the costs and dangers of lacking health insurance in America. This is particularly severe for undocumented workers in frontline industries where they are unable to social distance. Even before the pandemic, almost half of undocument immigrants were uninsured, placing them at risk for financial ruin if they got sick. 

It may also be suicidal — lack of regular medical care will prevent many from getting the COVID-19 vaccine. We must protect everyone from even more dangerous COVID-19 variants through inoculating a sufficient percentage of people in the U.S. and around the world.

And while undocumented immigrants make up only around 3 percent of the U.S. population and 4.4 percent of the workforce, they are make up a large share in certain industries, including some deemed essential during the COVID-19 crisis. 

For example, more than half of all agricultural workers are undocumented, many of whom were deemed essential during the COVID-19 crisis, placing them at increased risk for the virus. Similarly, around 40 percent of workers in meatpacking plants in the U.S. are reported to be undocumented, with many unable to effectively social distance or fight for better worker protections. 

Of the policy reforms under consideration by Congress, only Medicare for All would guarantee all necessary health care to all undocumented immigrants, by finally treating health care as a human right instead of as a means for profit. 

No one in the U.S. should be forced to go without health care, especially the COVID-19 vaccine. And leaving immigrants to fend off the medical vultures seeking to exploit them and take their money is no solution at all. We need reform now.

Assessment of Electronic Health Record Use Between US and Non-US Health Systems
JAMA Internal Medicine  2021;181(2):251-259.
February 1, 2021
A. Jay Holmgren et al. 

From the Abstract: 

Design, Setting, and Participants: This cross-sectional study analyzed the deidentified metadata of ambulatory care health systems in the US, Canada, Northern Europe, Western Europe, the Middle East, and Oceania from January 1, 2019, to August 31, 2019. All of these organizations used the EHR software from Epic Systems and represented most of Epic Systems’s ambulatory customer base.

Results: US clinicians spent more time per day actively using the EHR compared with non-US clinicians (mean time, 90.2 minutes vs 59.1 minutes; P < .001). In addition, US clinicians vs non-US clinicians spent significantly more time performing 4 clinical activities: notes (40.7 minutes vs 30.7 minutes; P < .001), orders (19.5 minutes vs 8.75 minutes; P < .001), in-basket messages (12.5 minutes vs 4.80 minutes; P < .001), and clinical review (17.6 minutes vs 14.8 minutes; P = .01). Clinicians in the US composed more automated note text than their non-US counterparts (77.5% vs 60.8% of note text; P < .001) . . . . The median US clinician spent as much time actively using the EHR per day (90.1 minutes) as a non-US clinician in the 99th percentile of active EHR use time per day (90.7 minutes) in the sample. These results persisted after controlling for organizational characteristics, including structure, type, size, and daily patient volume.

Comment by David Himmelstein and Steffie Woolhandler

US clinicians complain bitterly about their documentation burden and unwieldy EHRs that sap the joy of patient care, and these burdens are a main cause of the widespread and growing burnout problem.  This study makes clear that the US payment system inflicts much of this burden.  In other nations, clinicians using EPIC – the most widely used EHR in the US – spend far less of their time staring at computer screens and checking the endless boxes needed to assure payment.  A single payer reform that simplifies payment would greatly improve clinicians’ work lives.    

Time to Rethink Nursing Homes
The JAMA Forum
April 13, 2021
By Stuart M. Butler

“Hundreds of thousands of people who are older and disabled live in nursing homes not because they need specialized care or want to live in those facilities, but because Medicaid payment rules make that the only housing with daily living care they can afford.

Nursing homes serve two quite different populations. One requires short-term postacute care services. The other is long-stay residents who mostly need only basic daily living care, many of whom would prefer to be living in their own communities and among friends.”

Comment by Allison K. Hoffman

The COVID pandemic led many to question the safety and wisdom of long-term care in nursing homes, where the virus spread dramatically and tragically. In response, nursing homes and their regulation are under scrutiny, and some people are advocating for their end.  

However, moving long-term care into personal homes is not easy and not always the right option, even if older people might prefer to “be living in their own communities and among friends.” Historically, Medicaid had a distinct institutional bias, funding long-term care in institutional settings as a mandatory benefit and in home-based settings as an optional benefit. Over the past few decades, however, funding for Medicaid long-term services and supports has shifted dramatically from paying for care in institutions toward home- and community-based services (HCBS) – a process called “rebalancing.” Now, over half of Medicaid dollars fund care in home-based settings.

When long-term care happens in homes, however, much of the cost of that care is incurred by family members who serve as informal caregivers. Elsewhere, I’ve called these sizeable costs the “invisible copayment” of long-term care. Some scholars like Butler suggest that we’ll save money by moving care out of institutions and into homes.

But this move does not truly save costs; it shifts and hides them. Family members incur costs invisibly and behind closed doors in the form of lost wages, leisure time, and benefits and retirement savings, as well as poor health. My colleague Norma Coe and co-authors estimate that the median and indirect cost of caring for an older parent over two years are equal to the cost of full-time institutional care. Any response to nursing home problems that increases the already strong trends of relying on family caregiving will exacerbate these costs.

We’re far from a solution that will fully pay for home-based care, whether provided by formal caregivers or by family. President Biden proposed an additional $400B over the next 10 years to help fund home and community-based as part of the Americans Jobs Plan. Even if this full amount were to be enacted into law (a big if!), it barely scratches the surface of what it would take to fund the demand for long-term care at home. Already, states’ waiting lists for HCBS are long and formal caregivers are grossly underpaid, causing workforce shortages.

To meet the need for long-term care and to pay for it at a living wage, whether provided by formal caregivers or by family members, will take a much more dedicated effort. This is an essential topic in the single payer discussion.

COVID-19-Related Deaths And Excess Deaths Among Medicare Fee-For-Service Beneficiaries
Health Affairs
June 2021
By Wafa W. Tarazi, et al.

The experience with COVID-19 has brought to light a number of data limitations in the health care system. … Medicare’s administrative and claims data systems can support detailed analyses of morbidity, mortality, service use, and spending for beneficiaries in Medicare fee-for-service, to inform the nation’s response to COVID. … these data can be accessed and analyzed on a near-real-time basis to inform the response to future public health emergencies. Similar data for the rest of the population, however, are not readily available despite the efforts of some states to create all-payer claims databases.

Developing policies and methods around data collection and access will be important to address the consequences of future pandemics and other health emergencies.

***

Racial/Ethnic Disparities In COVID-19 Exposure Risk, Testing, And Cases At The Subcounty Level In California
Health Affairs
May 12, 2021
By Marissa B. Reitsma, et al

Tracking COVID-19 disparities and developing equity-focused public health programming that mitigates the effects of systemic racism can help improve health outcomes among California’s populations of color.

Comment by Don McCanne

Medicare’s administrative and claims data systems support detailed analyses of morbidity, mortality, service use, and spending for beneficiaries in Medicare fee-for-service that was used to inform the nation’s response to COVID. Similar data for the rest of the population was not available through the fragmented administrative system prevailing in the remainder of our health care financing system. It would have been had we had a single payer Medicare for All system.

Routine data can make a real difference, if comprehensive and quickly available.. “Tracking COVID-19 disparities and developing equity-focused public health programming that mitigates the effects of systemic racism can help improve health outcomes among… populations of color.”

The current pandemic has certainly reinforced the importance of public health, and, by extension, the importance of enacting and implementing a single payer system.

For the record: MedPAC’s response to AHIP’s recent “Correcting the Record” blog post.
March 3, 2021
By MedPAC Staff

“A recent blog post (“Correcting the Record”) from America’s Health Insurance Plans (AHIP) provides an inaccurate description of how the Medicare Payment Advisory Commission (MedPAC) compares spending in the Medicare Advantage (MA) program to Medicare fee-for-service (FFS) spending. The blog questions MedPAC’s long-standing assessment that, when properly compared, Medicare spends more overall for enrollees in Medicare Advantage than the program would have spent for similar beneficiaries enrolled in traditional FFS Medicare.[1]  . . .

Since 2004, our MA status report has presented a comparison of MA and FFS spending levels. This comparison aims to make an apples-to-apples comparison by accounting for a variety of differences between the two programs, such as:

• the health status of MA and FFS enrollees,
• the geographic distribution of MA and FFS enrollees,
• Medicare spending for hospice services and graduate medical education (both direct and indirect), and
• the tendency of MA plans to submit more diagnosis codes for their enrollees, which causes the risk scores for MA enrollees to be higher than the risk scores for similar FFS enrollees. . . .

When such adjustments are made, it is clear that Medicare spending for MA beneficiaries exceeds that for comparable FFS beneficiaries.  . . . we find that, since 2004, MA spending has consistently been higher than FFS spending, although the difference between them has varied over time (Figure 1).

Figure 1.  Medicare has paid more to MA plans than FFS Medicare spending would have been for the same enrollees, 2004–2021

Comment by David Himmelstein and Steffie Woolhandler

Private insurers garnered $278 billion from Medicare in 2019, a figure expected to rise steeply in the years ahead.  Their overhead averages 18% of their total premiums – equivalent to about $50 billion in 2019 alone.  In contrast, the overhead of traditional Medicare is only 2.3%.

MedPAC – the official Medicare advisory panel – has long estimated that private Medicare Advantage (MA) plans raise Medicare’s costs because the plans selectively recruit (and receive premiums for) healthier than average seniors who would cost Medicare little if they stayed in traditional Medicare; selectively disenroll the expensively ill; and “upcode” to make their enrollees look sicker than they actually are, boosting their premiums.

America’s Health Insurance Plans (AHIP) – the private insurers’ trade group – recently issued a report disputing MedPAC’s figures, and claiming that the MA program is actually a money saver.  The MedPAC’s staff’s rejoinder makes it clear that AHIP is dead wrong.

The MA program enriches private insurers but impoverishes the federal treasury.  It’s high time we ended it.  A Medicare for All reform must exclude MA, and the enormous waste it imposes on our health care system. 

Lake Research Partners
Polling on California Recall and Medicare for All
May 3, 2021

A new poll shows that likely voters in California strongly support  a state Medicare for All healthcare system, and that Governor Newsom seeking permission from the Biden Administration to fund the new system with federal dollars would strengthen his support in the upcoming recall election and among his potential supporters in the regularly scheduled re-election next year.
….

Overall, likely voters in California support a state Medicare for All system by a +26-point margin,  with 60% of voters supporting it and 34% (comprised largely of Republicans) opposing it. 

Among  “base” voters (those voting strongly or not-so-strongly “No” on the recall), 86% support Medicare for All (a +76-point margin of support). Core constituencies important to Governor Newsom’s recall effort also support Medicare for All at high margins, including registered Democrats (+73), women (+33), voters under 50 (+42), Latinos (+43), and AAPI voters (+48). Support for Medicare for All remains strong (52% to 34%) even when a comparative message is tested attacking Medicare for All, with the new system maintaining extremely high support (75%) among those who would vote “No” on the  recall, and strong majority support (62%) among swing voters. 

How the question was asked:

Supporters say Medicare for All will guarantee every Californian quality care with no premiums, co-pays, or deductibles, while ending the extreme health care inequities exposed by COVID-19. It would lower costs by eliminating insurance company profits and waste while reining in excessive drug and hospital prices. The state would expand care with existing funds plus more equitable taxes on large businesses and the wealthy, while we would have free choice of doctors, pharmacies, and hospitals, and would pay less for it.

Opponents say Medicare for All will require 350 billion dollars a year more in taxes, nearly tripling the state budget and making it impossible to fund priorities like better schools, ending homelessness, fighting climate change, managing drought and wildfires, and improving transportation. They say that under a one-size-fits-all health care, consumers lose choices and bureaucrats ration care. They say we should improve our current system which already covers 93 percent of Californians, not adopt a costly system of government-run medicine.

Comment by Jim Kahn

This remarkable poll was conducted for political purposes, and not widely publicized. But it is indeed worthy of note, and cause for optimism. It was conducted by Lake Research Partners, a highly respected firm known recently for work with the Biden campaign. Their polling is sophisticated and reliable.

The key finding is that 60% of California voters favor single payer — still 52% after hearing the pro and con arguments. This balanced presentation is essential for understanding the robustness of support. 

Among voters leaning “no” on the Gov. Newsom recall ballot (mainly, Democrats), support is a sky-high 86%. 6 out of 7 voters. And voting tendency for Newsom increases if he pursues single payer.

The voters are speaking. Are the politicians listening?

Health Affairs, June 2021, Ultra-Expensive Drugs And Medicare Part D: Spending And Beneficiary Use Up Sharply, By So-Yeon Kang, Daniel Polsky, Jodi B. Segal, and Gerard F. Anderson

Drugs with exceptionally high prices have sparked debate on their sustainability and affordability. We refer to these as “ultra-expensive” drugs, defined as drugs with average annual per beneficiary total spending in excess of the annual US per capita gross domestic product ($62,996 in 2018). In the context of Medicare, this includes both Medicare’s and the beneficiary’s responsibilities. Our findings show a rapid increase in the share of Medicare Part D spending on these drugs compared with other drugs.

It is a limitation of our study that we analyzed only Medicare Part D data and thus could not draw any conclusions regarding Medicaid or private insurance.

Medicare Part D spending for ultra-expensive brand-name drugs, 2018:

• 122 – Total number of drugs
•  278,000 – Total number of beneficiaries
•  $24,550,000,000 – Total spending
•  $175,513 – Average spending per beneficiary per drug

(The table also includes a section for drugs that are only expensive, defined as those that were not ultra-expensive but whose annual per beneficiary total spending was more than the yearly average Social Security benefits of retired workers [$16,848 in 2018]. These expensive drugs were consumed by 651,000 beneficiaries at an average of $34,451 per drug for total Medicare Part D spending of $21,552,000,000.)

The number of ultra-expensive drugs covered by Medicare Part D increased from 23 in 2012 to 122 in 2018.

We note that sixty-one drugs (50 percent of ultra-expensive drugs in 2018) entered the market as ultra-expensive drugs between 2012 and 2018; 31 percent were on the market but not ultra-expensive in 2012 and became ultra-expensive by 2018.

One challenge for policy makers is that half of these ultra-expensive drugs are new, and their sustained therapeutic and economic benefit for the price has not yet been demonstrated.

The concentration of Part D spending on the growing number of beneficiaries using ultra-expensive drugs suggests that policy makers should pay attention to this drug category.

—

Comment by Don McCanne

Drug spending is out of control and getting much worse. By the standards in the article, the newly released, likely-ineffective Alzheimer’s drug, aducanumab, at $56,000 per year, is considered onl expensive and not ultra-expensive.

Imagine, single drug pricing per beneficiary in excess of the per capita GDP. Wasn’t the equivalent of taking a full year’s Social Security retiree benefits for a single drug enough?

Perhaps the most important statement in this article, which is decidedly an understatement, is that “policy makers should pay attention to this drug category.”

Perhaps we should approach Sen. Joe Manchin, as a moderate conservative, and explain the situation to him so he can lead a unified Congress to do something about it. But, wait a minute, wasn’t it his daughter, Heather Bresch, as CEO of Mylan, who purchased the company, Abbott, that sold the EpiPen brand of epinephrine, and then increased its price by 461 percent?

Sadly, this Congress has already shown its lack of concern by its inaction; this price gouging is taking place under its very nose. No, we need to elect a Congress that will not only pay attention, but one that will actually do something about it. We certainly can no longer leave it up to the pharmaceutical industry to come up with fair pricing for its products.