Third in a three-part series.
Some of the senior citizens who called Arizona insurance agent Denise Early wondered why their Medicare Advantage health plans were eager to send a doctor to visit them at home.
A few worried that the offer might be a scam. After all, they asked, how many doctors make house calls these days?
More than people might think. Home visits have risen sharply at many private Medicare health plans, which treat close to 16 million elderly and disabled people under contracts with the federal government.
The health plans tout the voluntary, free annual physicals as a major new benefit that can help selected members stay fit and in their homes as long as possible. While the doctors and nurses don’t offer any treatment during their visit, they report their exam findings to the patient’s primary care physician.
Yet there’s more to this spurt in home visits than the appearance of enhanced elder care. The house calls can be money makers for health plans when they help document medical problems — from complications of diabetes to a history of heart trouble that’s flared up.
Health plans can profit because Medicare pays them higher rates for sicker patients using a billing formula known as a “risk score.” So when a home visit unearths a medical condition, as it often does, health plans may be able to raise a person’s risk score and collect thousands of dollars in added Medicare revenue over a year — even if they don’t incur any added expenses caring for that person. That’s been allowed under the billing rules.
The home visits are the most visible segment of a burgeoning medical information and data analysis industry that is thriving behind the scenes, in some cases backed by formidable venture capital and other investment groups, including Google Ventures.
The cottage industry is flourishing as federal officials struggle to prevent Medicare Advantage plans from overcharging the government by billions of dollars every year, a Center for Public Integrity investigation has found.
Medicare made nearly $70 billion in “improper” payments to Medicare Advantage plans from 2008 through 2013, mostly overbillings based on inflated risk scores, according to government estimates.
Federal officials last year suggested that home visits might play a role. They said they were concerned that some health plans may be turning to home visits and other strategies that drive up risk scores — and Medicare costs — without offering patients more actual medical services or tangible health benefits.
Officials didn’t say in the draft regulation how much the home visits have added to Medicare’s cost through higher risk scores. But two investor-backed companies together made a total of nearly half-a-million senior home visits in 2013.
In April, though, officials bowed to industry pressure and backed off their earlier proposal to restrict these visits.
Officials at the Centers for Medicare and Medicaid Services in Washington refused numerous requests for comment and declined to answer questions posed in writing.
Limiting the house calls could have cut payments to Medicare Advantage plans by nearly $3 billion a year, according to a report prepared for the insurance industry’s trade association.
Health plans argue that home visits help them meet a patient’s total health care needs — and assure that the plans are paid fairly for taking on that responsibility.
Scott Weiner, a Virginia Medicare billing expert, said health plans that don’t bill aggressively “will lose out to competitors” that do. “It’s keeping up with the Joneses,” he said.
The accuracy of risk scores isn’t just a Medicare Advantage issue. The payment system also will be used in paying for health care for millions of Americans under the Affordable Care Act, which officials expect to contain costs.