Can someone explain in simple terms why executives keep saying the reason for profit loss or RIFS is because of Medicare? What does that really mean? Is UHC losing contracts or CMS revenue? I keep hearing the reason for trimming is “due to Medicare” but they never explain what that means.
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https://www.beckersasc.com/asc-news/optum-undergoes-layoffs-what-ascs-should-know.html
It is because the Medicare risk adjustment model change fl starting in 2023 will cause hundreds of billions of dollars in loss across all Medicare companies. The change from 2020 model to 2024 model causes a massive revenue loss occurring over the next 2 years. We have our government to thank for these cuts in reality. Medicare is expensive and CMS cut out major risk adjustable codes that drive revenue.
Re: the poster who referred to ICD9, no one is saying it’s in any way related to that as that transition occurred in 2015. HCC is completely different. It’s a reimbursement model that ranks a member’s chronic condition. The more severe the condition, the lower the HCC = more capitation paid annually. If CMS adjusts the capitation rates each HCC is paid, UHG projects less money to care for these chronically ill members. Generally chronic conditions will require more $ spent in total on these members. The health plan should instead be incentivized to take better care of these members. CMS also requires an in person visit at least once a year with strict documentation that attests to all the HCC chronic conditions. So in the long forecast, reduced capitation could impact the bottom line which is evident in the Medicare related layoffs.
https://www.wolterskluwer.com/en/expert-insights/how-cms-hcc-version-28-will-impact-risk-adjustment-factor-raf-scores
This is what they are referring to.
This layoff impact had nothing to do with reduction in Medicare risk adjustment and revenue caused by ICD9 to ICD10 coding change. The change to ICD10 was already effective in 2016, so most companies have already adapted to such coding change before 2023. If coding change was an issue, then Commercial and Medicaid and other lines should all be affected in reduction in revenue.
Each claim could have more than 10 diagnosis fields for physicians to put on. If some diagnosis codes to severe conditions of a disease got put in later fields instead of first few diagnosis codes in a large payment claim, then that entire claim can be treated as a mild symptom for neglecting the severe diagnosis code. Such thing can happen in all lines of businesses. You just need better programs in risk adjustment departments to capture all diagnosis codes and categorize them efficiently by severity levels. Meanwhile, ask care managers and nurses to visit large payment claimants especially if these patients are disabled at home. There has to be a valid reason or more than one severe diagnosis codes associated with each large payment claimants. If not, then care management and risk adjustment teams have not done enough work and need to change their employees.
Apparently CMS Medicare risk rates were lower than expected and part of it is related to ICD10 code changes which impacts how much we get paid? I have minimal understanding of this but I googled CMS final rule ICD10 codes and found the notice from CMS. It's kind of scary just how much the Medicare LOB impacts our entire bottom line across the enterprise.
Medicaid Membership: Many states expanded Medicaid membership during Covid and several did not purge rolls over that time. It appears that trend is over. Several states are purging their rolls. I just read that Texas will be purging over 500,000 members out ot the system. MCOs earn a lot of money via Medicaid and they have a lot of FTEs supporting the business. I expect that C&S will see more layoffs as the impact works into the financial projections.
I thought it was because we joined/assumed many companies this last year. Redundant positions. But Medicare also changed what Diag codes map to HCC codes changing the amount we get for risk adjustment. For each hcc code they have the more money we get for patients under our Medicare programs. There are many Google sources that explain Medicare-CMS HCC risk adjustmentpq if you need more info. Maybe it is combo of that and they want to replace onshore with more offshore?