The Wall Street Journal’s investigative report on Medicare Advantage (MA) deftly uncovers little known concerns about how these plans harm taxpayers. Specifically, these plans exploit Medicare by manipulating coding to increase their payments. This particular report on The One Hour Nurse Visit illustrates how these private insurers use coding to gerrymander a patient's list of illnesses, making them look sicker, so the insurers can collect billions in higher government payments.
This nurse visit strategy is merely one of hundreds of practices by the insurers to increase their government reimbursement through coding. What makes this manipulation of coding possible is complexity. Coding is unbelievably complex and this complexity creates a gray space where MA plans can justify their actions as defensible. In this case, insurers argue
these nurse visits are good for patients, when in fact, the nurses are not there to treat anyone, they are there to gather new diagnoses to increase payments.
Unfortunately, Medicare, which does acknowledge this problem, seeks to cure it by making coding even more complex and by increasing their efforts at fraud oversight. This strategy has not worked and will not work. The answer is to decrease the use of coding for the determination of payments.
Basing premium payments on a patient's list of diagnoses, in theory, is a good idea. However, the continuous increase in coding complexity creates the gray space and invites fraudulent actions like the One Hour Nurse Visit. There are less complex methods of adjusting patient risk for insurance premiums that are technically less accurate but are simple and not subject to billions of dollars in manipulation. Healthcare needs to start embracing simple solutions to our challenges in healthcare payment.
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