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PPACA risk system may get 9 billion claim records per year

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The Centers for Medicare & Medicaid Services (CMS) is cranking up a major new health record collection and analysis effort: the Patient Protection and Affordable Care Act (PPACA) risk-adjustment program.

Regulators plan to use the program — one of the PPACA “three R’s” risk-management programs — to shift cash from health insurers with unusually low-risk individual and small-group enrollees to insurers with unusually high-risk individual and small-group enrollees.

CMS officials predicted in an information collection review statement that 2,400 insurers will file detailed risk-adjustment information for about one-third of their enrollees through a special data system that’s separate from other data systems operated by CMS and CMS’s parent, the U.S. Department of Health and Human Services (HHS).

The insurers will file summary information about their plans, anonymized ID numbers for individual enrollees, and detailed risk-scoring information for individual enrollees. In addition to the anonymized ID number, an enrollee-level filing will include the enrollees’ date of birth, gender, enrollment period activity, plan enrollment start date, and information about a pharmacy or medical claim.

A pharmacy claim filing, for example, might include the pharmacy product ID number, the total plan allowed cost for the prescription, and the amount the plan actually paid.

A medical claim filing would include a diagnosis code, the total allowed amount, the total amount paid, a code describing the service provided, and information about the place the service was provided.

CMS is expecting the risk-adjustment system to take in about 9 billion filings this year alone.

The program could take a typical insurer 5,760 hours per year — enough time to keep about three full-time employees busy — according to CMS estimates. Officials are estimating feeding records into the program will cost insurers about $1.2 billion, or about $500,000 each.

CMS has already been operating a risk-adjustment program for the Medicare Advantage program. Some have questioned how accurate the Medicare program risk scores have been.

See also: UnitedHealth still optimistic about PPACA exchanges