[Calculating Ratios Based on Statutory Health Care Data at the District Level - An Empirical Estimation Based on the Microcensus]. / Ratenbildung bei KV-Daten mit GKV-Versicherten auf Kreisebene ­ ein empirisches Schätzmodell auf der Basis des Mikrozensus.

Background: In Germany, data of the statutory health insurance system are used, amongst others, in health monitoring and health care research at the district level. For the calculation of exact ratios, the number of those covered by statutory health insurance is needed as denominator. For some federal states, however, this number is not available on a district level. Therefore, ratios based on statutory health care data are calculated using a surrogate defined in terms of visits to the doctor. This leads to uncertainties that limit small area comparisons. Therefore, the aim of the present study was to develop a superior estimation model for the number of those covered by statutory health insurance on a district level. Methods: The proportion of those covered by statutory health insurance in the Bavarian districts is estimated by a multiple linear regression model. The model relates data on determinants of the insurance status (income, proportions of civil servants and of self-employed persons) available on district level to data on the number of those covered by statutory health insurance obtained from microcensus on a regional level. The proportion of those covered by statutory health insurance estimated by this model is compared to the surrogate. As an example for practical application, small area estimations for diabetes prevalence are compared to data provided by the Bavarian Association of Statutory Health Insurance Physicians. Results: The proportion of those covered by the statutory health insurance in the Bavarian districts as estimated by the regression model varies between 74.7 and 91.6%. The difference to the currently used surrogate reaches up to 18.6 percentage points. This is also reflected in treatment prevalence, shown here using the example of diabetes mellitus. Conclusion: The present analysis shows the uncertainties of ratios and consequences for small area comparisons based on statutory healthcare data. Providing valid data for the denominator in accordance with the data transparency regulation in the Social Insurance Code (SGB) V should be attempted.

[Consistency and Reliability of MDK Expertise Examining the Encoding in the German DRG System]. / Einheitlichkeit der richtlinienkonformen Begutachtung durch den Medizinischen Dienst der Krankenversicherung bei der Prüfung der Kodierung im G-DRG-System.

INTRODUCTION: Hospital inpatient stays are reimbursed on the basis of German diagnosis-related groups (G-DRG). The G-DRG classification system is based on complex coding guidelines. The Medical Review Board of the Statutory Health Insurance Funds (MDK) examines the encoding by hospitals and delivers individual expertises on behalf of the German statutory health insurance companies in cases in which irregularities are suspected. A study was conducted on the inter-rater reliability of the MDK expertises regarding the scope of the assessment. METHODS: A representative sample of 212 MDK expertises was taken from a selected pool of 1 392 MDK expertises in May 2013. This representative sample underwent a double-examination by 2 independent MDK experts using a special software based on the 3MTM G-DRG Grouper 2013 of 3M Medica, Germany. The following items encoded by the hospitals were examined: DRG, principal diagnosis, secondary diagnoses, procedures and additional payments. It was analysed whether the results of MDK expertises were consistent, reliable and correct. RESULTS: 202 expertises were eligible for evaluation, containing a total of 254 questions regarding one or more of the 5 items encoded by hospitals. The double-examination by 2 independent MDK experts showed matching results in 187 questions (73.6%) meaning they had been examined consistently and correctly. 59 questions (23.2%) did not show matching results, nevertheless they had been examined correctly regarding the scope of the assessment. None of the principal diagnoses was significantly affected by inconsistent or wrong judgment. CONCLUSION: A representative sample of MDK expertises examining the DRG encoding by hospitals showed a very high percentage of correct examination by the MDK experts. Identical MDK expertises cannot be achieved in all cases due to the scope of the assessment. Further improvement and simplification of codes and coding guidelines are required to reduce the scope of assessment with regard to correct DRG encoding and its examination.

A matter of classes: stratifying health care populations to produce better estimates of inpatient costs.

OBJECTIVE: To stratify traditional risk-adjustment models by health severity classes in a way that is empirically based, is accessible to policy makers, and improves predictions of inpatient costs. DATA SOURCES: Secondary data created from the administrative claims from all 829,356 children aged 21 years and under enrolled in Georgia Medicaid in 1999. STUDY DESIGN: A finite mixture model was used to assign child Medicaid patients to health severity classes. These class assignments were then used to stratify both portions of a traditional two-part risk-adjustment model predicting inpatient Medicaid expenditures. Traditional model results were compared with the stratified model using actuarial statistics. PRINCIPAL FINDINGS: The finite mixture model identified four classes of children: a majority healthy class and three illness classes with increasing levels of severity. Stratifying the traditional two-part risk-adjustment model by health severity classes improved its R(2) from 0.17 to 0.25. The majority of additional predictive power resulted from stratifying the second part of the two-part model. Further, the preference for the stratified model was unaffected by months of patient enrollment time. CONCLUSIONS: Stratifying health care populations based on measures of health severity is a powerful method to achieve more accurate cost predictions. Insurers who ignore the predictive advances of sample stratification in setting risk-adjusted premiums may create strong financial incentives for adverse selection. Finite mixture models provide an empirically based, replicable methodology for stratification that should be accessible to most health care financial managers.

Comparing the financial risk of bed-day and DRG based pricing types using parametric and simulation methods.

The extent of random financial risk involved in the Finnish bed-day and Diagnosis Related Groups (DRG) based hospital pricing systems were estimated and compared using parametric and simulation methods. DRG based payment schemes were found to provide significantly better protection against financial risk for municipalities, but municipality's size was the main determinant of financial risk. Small municipalities should use longer contracts between hospitals or form bigger purchaser-organisations for risk pooling. In addition, the current risk management system proved to be ineffective in decreasing the random variation in total costs.

Medicare program; update of ambulatory surgical center list of covered procedures effective July 1, 2003. Final rule with comment period.

This final rule with comment period will make additions to and deletions from the current list of Medicare approved ambulatory surgical center (ASCs) procedures. In addition, it responds to comments received on the June 12, 1998 proposed rule (63 FR 32290) that addressed proposed additions to and deletions from the list of ASC covered procedures. This rule also implements requirements of section 1833(i)(1) and (2) of the Social Security Act.

Community rating in health insurance and different benefit packages.

This paper presents a model of a competitive health insurance market with two risk types and two health benefits. In the benchmark case, community rating insurers (CRIs) are only allowed to offer the basic benefit. The additional benefit is sold by risk rating insurers (RRIs). It is shown that low risk types can only be better off at the expense of high risk types if CRIs are allowed to offer the additional benefit and no additional measures are taken. However, high risk types can be made better off if CRIs must offer the additional benefit or if community rating health insurers offering the additional benefit are subsidized while those selling only the basic benefit are taxed.

The financial implications of HMOs' partial county carve-out option.

This study examined the Health Care Financing Administration's policy allowing Medicare HMO risk contracts to carve out certain portions of counties from their service areas without adjusting the HMOs' capitation rate. In 1999, the policy resulted in 2.2 million Medicare enrollees losing access to HMOs and 2.3 million Medicare enrollees left with fewer HMO options. Although the majority of Medicare HMOs did not appear to be adopting the policy, there did seem to be a general tendency to exclude higher cost areas, which resulted in an estimated loss to the Medicare Trust Fund of $769 million in 1999. Of particular concern is the magnitude of profits and losses this policy generated for some individual HMOs.

Does an increase in the Medicaid reimbursement rate improve nursing home quality?

OBJECTIVES: Numerous studies have documented poor nursing home quality over the last 3 decades. Previous research has questioned the effectiveness of Medicaid reimbursement policy in improving quality in the presence of certificate-of-need (CON) and construction moratoria regulation. This study evaluated how the Medicaid reimbursement rate may influence a home's decision to provide quality under CON and moratoria. METHODS: Linking national data from the On-Line Survey, Certification, and Reporting system, the Area Resource File, and aggregate reimbursement information, the author examined the effect of Medicaid reimbursement on a range of quality measures in the context of CON and moratoria. RESULTS: An increase in Medicaid reimbursement improved quality as measured by professional staffing, but there was not a statistically significant effect when quality was measured by nonprofessional staffing, various procedural measures, or regulatory deficiencies. However, this study did not support previous research showing a negative effect of Medicaid reimbursement on nursing home quality in the context of CON laws. DISCUSSION: This study supports recent trends suggesting that nursing home CON laws may be lessening in importance for the nursing home market. Nevertheless, further work is necessary to determine the quality returns to increased Medicaid reimbursement.

Medicaid managed care payment rates in 1998.

This paper reports on a new survey of state Medicaid managed care payment rates. We collected rate data for Medicaid's Aid to Families with Dependent Children (AFDC)/Temporary Assistance for Needy Families (TANF) and poverty-related populations and made adjustments to make the data comparable across states. The results show a slightly more than twofold variation in capitation rates among states, caused primarily by fee-for-service spending levels and demographics. There is a very low correlation between the variation in Medicaid capitation rates among states and the variations in Medicare's adjusted average per capita cost. The data are not sufficient to answer questions about the adequacy of rates but should help to further policy discussions and research.

California market a rough ride for risk contractors, data show.

Data Insight: California encompasses a variety of markets, but capitation is a common thread that runs through most. This snapshot of two provider groups' PMPM rates illustrates that financial results can differ dramatically.

Varying health care provider objectives and cost-shifting: the case of retail pharmacy in the US.

In this paper we investigate the relationship between health care provider objectives, cost-shifting, and prices by exploring the relationship between state Medicaid pharmacy reimbursements and average prices paid by pharmacy retail customers for four distinct pharmaceutical products across the US in 1994. We develop a more general theory than past researchers to enable provider objectives to vary with Medicaid pharmacy reimbursement levels. We find that provider objectives and the direction of relationship between Medicaid pharmacy reimbursements and retail prices vary with Medicaid pharmacy reimbursement levels. At high Medicaid pharmacy reimbursement levels we find a consistent negative relationship across products. At low Medicaid pharmacy reimbursement levels, the direction of the relationship is product-specific. As a result, policy-makers should be aware that policies affecting reimbursements from government-sponsored health insurance will also affect retail customers that include the uninsured. Paradoxically, for certain products if a state cuts a generous Medicaid reimbursement level this could hurt uninsured patients, whereas cuts in a stingy Medicaid reimbursement rate may help uninsured patients.

Adjusted community rate reforms to promote HMO participation in Medicare+Choice.

The authors review the financial regulations imposed on health maintenance organizations (HMOs) that participate in the Medicare+Choice program and identify elements of the regulations that may discourage HMO participation in the program. Modifications of the regulations are proposed that could encourage the participation of HMOs without affording them excessive profit. The modifications include smoothing and bounding profit estimates and authorizing and encouraging expanded use of benefit stabilization funds.

Physician rewards for different kinds of service: the RBRVS versus the CPR system.

The resource-based relative value scale (RBRVS) was introduced in 1992 by Medicare for payments to physicians. This replaced the previous system based on the physician's customary, prevailing, and reasonable (CPR) charges. This paper analyzes the RBRVS from two perspectives: (1) the economic logic of the system and (2) how it functions differently from the CPR system in practice. As a social pricing system, it can make sense under certain conditions. However, when we provided a test for a New York plastic surgeon of the alleged underpricing of evaluative relative to procedural services under CPR, we found evidence to the contrary.