A flawed risk-adjustment model is causing Medicare to overpay some health plans and providers and underpay others, according to a new study published by BMJ.
The problem is that people in some parts of the country visit healthcare providers more frequently than in others, according to the findings. Based on diagnoses, though, it turns out more visits don't necessarily equate to sicker patients, suggesting Medicare has been overpaying in those regions.
"Adjusting without correction for regional variation in visit rates tends to make regions with high rates of visits seem to have lower mortality and lower costs and vice versa," the researchers conclude. "Visit-corrected comorbidity measures better explain variation in age, sex, and race mortality than observed measures, and reduce observational intensity bias."
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To learn more:
-here's the BMJ study-read Rau's blog post
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