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Life Health > Health Insurance > Health Insurance

PPACA: Rise of the health detectives?

By Allison Bell

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A company that helps health insurers measure exactly how risky their enrollees are says major medical insurers may have to start sending health evaluation workers to some enrollees’ homes.

PopHealthCare, a company that has been selling enrollee analysis services to Medicare and Medicaid plan issuers, is now marketing its services to the insurers that write individual major medical coverage. The company argues in a new commentary that the best way to make enrollee risk assessments more accurate is to conduct in-home enrollee assessments. 

See also: Underwriting, frailty and older age applicants

The Patient Protection and Affordable Care Act of 2010 (PPACA) requires insurers that sell PPACA-compliant individual and small-group major medical coverage, inside or outside the PPACA public exchange system, to participate in a permanent risk-adjustment program, to reduce the possibility that some insurers will do better than others simply because they find ways to avoid covering people with health problems.

Individual and small-group issuers are supposed to use the Hierarchical Condition Categories (HCC) system to assign as many enrollees as possible an HCC code; translate the HCC code into a risk score; and use risk scores to calculate how risky the enrollees in a plan are.

See also: Feds post PPACA lifeboat program numbers

Plans with relatively low risk scores are supposed to send cash to plans with relatively high risk scores. Analysts at Standard & Poor’s recently suggested that some health insurers had problems with accurately estimating risk-adjustment transfer amounts and will be getting or paying much more than they had expected.

Insurers are now in the middle of efforts to report any concerns about federal risk-adjustment transfer estimate accuracy and get the payables reduced as much as possible.

See also: PPACA World managers prepare to collect bills

Some consumers may prefer not to let health raters in the door, but insurers in the ordinary major medical market have a much tougher time assessing enrollees’ health than insurers in the Medicare market, because enrollees in the major medical market are less likely to visit the doctor than Medicare enrollees are, and are much less likely to have an HCC code, PopHealthCare says.

About 20 percent of the enrollees in PPACA-compliant plans have HCC codes, compared with about 60 percent of Medicare Advantage plan enrollees, the firm says.

Sending raters to enrollees’ homes is a way for an insurer to get more information about enrollees who avoid seeing doctors, the firm says.

In-home assessments “provide the issuer accurate HCCs, quality-improvement opportunities and additional member insights such as socio-economic impressions, ultimately achieving better revenue accuracy and a better understanding of the full picture of member health,” PopHealthCare says.

In the Medicare market, officials at the Centers for Medicare & Medicaid Services (CMS) have been asking insurers to develop standards for in-home assessments. CMS officials have suggested that doing more in-home assessments might be a way to improve patient care, but that it also might be a way for maximizing reimbursement revenue, by increasing enrollees’ risk scores in ways that may not correlate with any increase in actual enrollee risk levels.

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