Risk Scores and provider size

At a recent AcademyHealth presentation, Cheryl Damberg discussed her research to design a P4P program for implementation for Integrated Healthcare Association (IHA).  One thing I noticed about the presentation was that smaller provider groups had patients with lower risk scores (i.e., healthier patients).  Is it really the case that small providers treat much healthier patients?

My guess is the answer is not.  An alternative explanation would be that small providers do not have as much time or administrative staff to help them code the patient’s comorbidities in their claims (or even EMR).  If this is the case, it would make it appear that small provider’s patients are healthier when in fact the true differences may be due to differences in the quality of the data the providers report.

Any VBP system would need to take into account these differences when evaluating providers.  Setting a lower standard for small providers, however, would provide a disincentive for small providers to expand into the large provider category, even if this expansion could (potentially) create economies of scale and improve patient care.

1 Comment

  1. I agree with your assessment that smaller providers are not treating healthier patients. However I believe there are different reasons for this discrepancy.
    Based on my past experience, the effort to collect risk scores was championed by the Medicare Advantage (MA) plans. Their motivation was very simple, an increase in risk scores equaled an increase in reimbursement from CMS. MA plans focused their time and resources on educating physicians and office staff in the larger offices — they could influence the risk scores of a large percentage of their Medicare population in a few concentrated visits. Rarely did MA plans take the time to educate the solo or small offices, it was not an efficient use of their time/resources.
    Traditional Medicare does not reward physicians for reporting more detailed or more accurate Dx codes. A physician treating a patient for a cold, headache and high blood pressure will not receive additional compensation for adding CHF or Diabetes onto the bill to CMS.
    Finally, I would add that the traditional Medicare patient comprises a larger portion of the small provider’s business. If there is no requirement to change their behavior on getting paid for these members, they will be slow to change their ways.

    I believe it is these factors, a larger traditional Medicare poplutation, lack of training and lack of incentives, that are the root cause for the lower scores and the misleading assumption of healthier patients. These shortcomings create a negative environment if your goal is improve accurate data collection.

    However the end results tie back to your statement that the “true differences may be due to differences in the quality of the data the providers report”.

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