Medicare Advantage ‘risk adjustment’ may affect care

Unlike traditional Medicare, which runs on a fee-for-service arrangement, the Medicare Advantage program pays participating private health plans a flat fee every month to provide whatever care a patient needs based on their age, gender, geography and risk factors that impact their health. To cover patients with expensive conditions like diabetes, heart disease and cancer, Medicare provides a higher monthly payment using a “risk adjustment” for each such condition. So the unhealthier the patient, the more the plan takes in.

Unfortunately, this has created an incentive for unscrupulous healthcare companies to game the system by adding codes to patients’ medical records for conditions that either have been resolved or do not currently impact the patients’ health.

For instance, in one of the examples that was part of a lawsuit the government brought against Sutter Health in California, the company added thyroid cancer to a patient’s record as a current condition even though the patient had been cancer-free for years. This way, Sutter got an inflated monthly payment from Medicare without providing treatment. In fact, some large health systems have engaged in sophisticated data-mining to scour health histories of thousands of Medicare Advantage patients in search of past conditions to add to current records, bringing in millions of dollars in inflated payments as a result.

So what does this mean for you? If you are a Medicare Advantage patient, it means your record may portray you as being sicker than you actually are. This could cause you to be stigmatized as being obese or mentally ill, or create a false picture that can influence how doctors decide to treat you. If you suspect that your health record or that of a loved one contains exaggerated or outdated diagnoses, you should discuss your options with an attorney.