← Back to Insights
May 15, 2024
Authors
David Burda
Topics
Economics Outcomes System Dynamics
Channels
Blogs

Cashing in on DIY Health Risk Assessments?

My mom is 85, and she still lives alone in the same house that me and my sister grew up in. My mom’s in relatively decent health for a person her age, but my sister and I make her text us sometime after dinner and before bed to let us know she’s still alive. We call it “proof of life.” She likes to know we’re alive, too.

The daily proof of life ritual came about after we couldn’t reach my mom for almost two days. My sister and I flipped a coin to see who would drive the 40 minutes to my mom’s house to see if she was dead. My sister lost, and as she was getting in her car, my mom called. She left her phone outside on the patio table and forgot where it was. We called off the recovery mission.

My mom’s nightly texts are a sliding scale of how she’s feeling. She’s one of the following:

  • OK
  • Fine
  • Good
  • Great

That’s our do-it-yourself health risk assessment, aka our DIY HRA. It’s not scientific. It’s unstructured data. It gets the job done.

I discovered that our family ritual parallels trends in healthcare when I read a new study in Health Affairs on Medicare Advantage (MA) plans and health risk assessments (HRAs).

Before I comment about what the study said, let’s quickly go over the MA plan business model. On one end, MA plans overstate how sick their enrollees are to extract higher payment rates from the federal government and increase revenue. On the other end, MA plans understate how sick their enrollees are to deny coverage to enrollees and deny claim for payment from providers and decrease their costs.

Higher revenue and lower costs equal higher profits in any industry, including healthcare.

Anyway, seven researchers from Brown University looked at the use of HRAs by MA plans. MA plans use the results from HRAs to adjust Hierarchical Condition Categories (HCC) risk scores. The worse the HRA results, the higher the HCC risk scores, the higher the reimbursement rates from Medicare to pay for the level of care required by the enrollees.

HRAs are fairly standard. MA plans or companies under contract with MA plans conduct them as part of annual wellness visits. Although the HRA questions are fairly standard, how enrollees answer them and how agents conduct HRAs and interpret enrollees’ answers can be subjective.

Here’s what the researchers found using MA plan encounter data from Medicare:

  • 44.4% of MA plan enrollees had at least one HRA in 2019.
  • HCC risk scores jumped nearly 13% for enrollees with at least one HRA.
  • The higher risk scores increased payments to MA plans by more than $12 billion in 2020.

“The overuse of HRAs by some plans may lead to substantial payment distortions in the MA program if the risk-score increases due to HRAs are not necessarily associated with increased resource use,” the researchers said.

Translated from health services researcher speak, that’s exactly the same MA business model I described earlier. Now, as people who partake in HRA management every single day, how can my sister and I get a piece of that $12 billion?

Thanks for reading.

To learn more about what’s going on with MA plans, please read, “Medicare Advantage Is Pushing People’s Buttons.”

About the Author

David Burda

David Burda began covering healthcare in 1983 and hasn’t stopped since. Dave writes this monthly column “Burda on Healthcare,” contributes weekly blog posts, manages our weekly newsletter 4sight Friday, and hosts our weekly Roundup podcast. Dave believes that healthcare is a business like any other business, and customers — patients — are king. If you do what’s right for patients, good business results will follow.

Dave’s personnel experiences with the healthcare system both as a patient and family caregiver have shaped his point of view. It’s also been shaped by covering the industry for 40 years as a reporter and editor. He worked at Modern Healthcare for 25 years, the last 11 as editor.

Prior to Modern Healthcare, he did stints at the American Medical Record Association (now AHIMA) and the American Hospital Association. After Modern Healthcare, he wrote a monthly column for Twin Cities Business explaining healthcare trends to a business audience, and he developed and executed content marketing plans for leading healthcare corporations as the editorial director for healthcare strategies at MSP Communications.

When he’s not reading and writing about healthcare, Dave spends his time riding the trails of DuPage County, IL, on his bike, tending his vegetable garden and daydreaming about being a lobster fisherman in Maine. He lives in Wheaton, IL, with his lovely wife of 40 years and his three children, none of whom want to be journalists or lobster fishermen.

Recent Posts

Economics
How Healthcare Revolutionaries Think: 10 Questions with Matt Marek
Welcome to the latest installment of 4sight Health’s series, How Healthcare Revolutionaries Think. Our interview series profiles healthcare… Read More
By May 21, 2024
Economics
A Relatively Short Anecdote About Patient Leakage
Healthcare has more industry jargon than most. One of my least favorite terms is “patient leakage.” That occurs… Read More
By May 8, 2024
Default Image
Outcomes
4sight Friday | May 3, 2024
4sight Friday | Rethinking the Role of Employers in Healthcare | Some Good Medical Debt News for a… Read More
By May 3, 2024