Documents
Resources
Learning Center
Upload
Plans & pricing Sign in
Sign Out

Refinements to the CMS-HCC Model For Risk - AcademyHealth

VIEWS: 2 PAGES: 25

									  Refinements to the CMS-HCC
  Model For Risk Adjustment of
  Medicare Capitation Payments

                                             Presented by:

                                     John Kautter, Ph.D.
                                     Gregory Pope, M.S.
                                     Eric Olmsted, Ph.D.

                                       RTI International

Contact: John Kautter, PhD, jkautter@rti.org
RTI International is a trade name of Research Triangle Institute.
History of Medicare Risk
Adjustment
   Demographics (AAPCC)
      Doesn’t explain cost variation
      Favorable selection => higher program costs

   Principal inpatient diagnoses (PIP-DCG model,
    2000)
      Incentive to admit
      Penalizes plans that avoid admissions

   Inpatient and ambulatory diagnoses (2004)



                                                     2
CMS-HCC Model

   Centers for Medicare & Medicaid Services
    (CMS) Hierarchical Condition Categories
    (HCC) model
   Prospective
   Inpatient and outpatient diagnoses w/o
    distinction
   70 diagnostic categories (HCCs)
   Hierarchical within diseases




                                               3
CMS-HCC Model (continued)

   Cumulative (additive) across diseases
   6 disease interactions
   Discretionary diagnoses are excluded
   Demographic factors included
   Calibrated on 1999/2000 Medicare 5% Sample




                                                 4
CMS-HCC Model
Performance
   Percentage of cost variation explained
      Age/Sex:                        0.8%
      PIP-DCG:                        5.5%
      CMS-HCC:                        10.0%




                                               5
CMS-HCC Models for
Medicare Subpopulations
   Disabled
   End-stage renal disease
   Institutionalized
   New enrollees
   Secondary payer status
   Frail elderly




                              6
Disabled

   Over 10% of Medicare population
   Under age 65
   Model estimated separately for aged and
    disabled
       Overall cost patterns similar
       For 5 diagnostic categories, incremental
        expense of the disabled is higher
   5 disease interactions for disabled in final CMS-
    HCC model

                                                        7
End-Stage Renal Disease

   About 1% of Medicare population
   Very expensive: approximately $50,000/year
   3-segment model
      Dialysis patients
         CMS-HCC model calibrated on dialysis
          patients
      Transplant period (3 months)
         Lump-sum payment
      Post-transplant period
         Aged/disabled CMS-HCC model w/add-
          on for drugs                           8
Institutionalized Beneficiaries

   About 5% of Medicare population
   Costly, but less expensive than community
    residents for same diagnostic profile
   Combined CMS-HCC model
      Overpredicts costs for institutionalized
      Underpredicts costs for community frail
       elderly




                                                  9
Institutionalized Beneficiaries
(continued)
   Different cost patterns by age and diagnosis for
    community and institutionalized
   CMS-HCC model calibrated separately on
    community and institutionalized
   Current year institutional status reported by
    nursing homes




                                                       10
New Enrollees

   Lack 12 months of base year enrollment
   Two-thirds are 65 year olds
   New enrollees versus continuing enrollees
      Much less costly at age 65

       Similar costs at other ages
   Merged new/continuing enrollee sample
   Separate cost weights for 65 year olds
   Demographic model

                                                11
Medicare as Secondary Payer

   Beneficiaries with active employee employer-
    sponsored insurance
   Costs are lower
   Multiplier scales cost predictions down
   Multiplier is ratio of mean actual to mean
    predicted expenditures




                                                   12
Frail Elderly

   Diagnosis-based models underpredict
    expenditures for the functionally impaired
   Medicare specialty plans (e.g., PACE) serve
    functionally-impaired populations
   Frailty adjuster to better predict their costs
      Predicts costs unexplained by CMS-HCC
      Based on difficulties in ADLs
      ADLs collected from surveys or assessments




                                                     13
CMS-HCC Model
Refinements
   Additional HCCs added to model
   100% institutional sample used for institutional
    model calibration
   Changes in diagnostic classification
   2002/2003 Medicare FFS data used for
    calibration of all models




                                                       14
Availability of Additional
HCCs
   For Part D risk adjuster, plans required to submit
    diagnoses for 127 HCCs
   Additional 57 HCCs available for CMS-HCC
    models (127 – 70 = 57)




                                                         15
Adding HCCs

   Benefits
      Greater accuracy in predicting illness burden

      Rewards plans who enroll and treat
       beneficiaries with these diagnoses
         E.g., Special Needs Plans (SNPs)

   Drawbacks
      Creates greater opportunities for diagnostic
       “upcoding”



                                                       16
HCCs Added to CMS-HCC
Model
   Available additional HCCs reviewed by project
    team to determine which were appropriate for
    payment model
   Number of HCCs increased from 70 to 101




                                                    17
Examples of HCCs Added to
CMS-HCC Model
               “Refined” CMS-HCC Model
HCC             Community Institutional

Type I
Diabetes
Mellitus        $1,557      $1,435

Dementia/
Cerebral
Degeneration    $1,576        −−

Hypertension    $388        $919
                                          18
100% Institutional Sample

   CMS-HCC institutional model calibrated on 5%
    institutional sample (n = 65,593)
   To increase statistical accuracy and stability,
    “refined” CMS-HCC institutional model
    calibrated on 100% institutional sample
    (n = 1,238,842)




                                                      19
Distribution of Annualized
Medicare Expenditures, 2003
               5% Community 100% Institutional

Sample Size       1,380,978     1,238,842

Expenditures
Mean              $6,541        $11,252

95th Percentile   $31,285       $47,390
90th Percentile   $17,682       $31,553
Median            $1,445        $3,028
10th Percentile   $56           $538
5th Percentile    $0            $349
                                                 20
Changes in Diagnostic
Classification

   Diabetes complications moved to diabetes
    hierarchy
      E.g., diabetic neuropathy moved from HCC
       71 Polyneuropathy to HCC 16 Diabetes with
       Neurologic or Other Specified Manifestation
   HCC 119 Proliferative Diabetic Retinopathy and
    Vitreous Hemorrhage deleted and most moved
    to HCC 18 Diabetes with Ophthalmologic or
    Unspecified Manifestation
   Cerebral Palsy consolidated in HCC 70 Cerebral
    Palsy and Muscular Distrophy
                                                     21
Refined CMS-HCC Community
and Institutional Models

                 % of Cost
                 Variation
                 Explained   # HCCs

CMS-HCC
Community        9.8%        70
Institutional    6.0%        69

“Refined” CMS-HCC
Community         11.0%      101
Institutional     8.9%       90

                                      22
Refined CMS-HCC Model
Performance – I
   Predictive ratios, prior year expenditure quintiles
             Age/Sex      CMS-HCC
First            2.65           1.20
Second           1.82           1.19
Third            1.31           1.09
Fourth           0.91           0.99
Fifth            0.46           0.90


                                                          23
Refined CMS-HCC Model
Performance – II
   Predicted ratios by CMS-HCC predicted
    expenditure deciles
               Age/Sex       CMS-HCC
First          2.84          0.88
Second         2.43          0.92
Third          2.10          0.94
Fourth         1.70          0.97
Fifth          1.49          0.97
Sixth          1.27          1.00
Seventh        1.06          1.01
Eighth         0.86          1.04
Ninth          0.64          1.04
Tenth          0.35          1.00           24
Conclusions

   Medicare risk adjustment has been evolving
     Demographic  Inpatient  All-Encounter
      (AAPCC)           (PIP-DCG) (CMS-HCC)
   The “refined” CMS-HCC model represents a
    more comprehensive all-encounter risk
    adjustment model
      Increases payment accuracy for plans
         Viability of plans
             – Beneficiaries’ access to plans


                                                 25

								
To top