Medicaid patients admitted to hospitals with a higher proportion of private payers received more diagnoses on Medicaid insurance claims than those from hospitals with a lower proportion of private payers, a new study of more than 1 million finds Medicaid admissions in New York State.
Diagnostic coding software is an infrastructure investment that can be used more often by hospitals with a higher proportion of privately insured patients with higher reimbursement rates, wrote Kacie L. Dragan, MPH, Ph.D. at Harvard University, Cambridge, Massachusetts, and colleagues. .
“Provider-level variation in coding intensity has been documented to some extent for Medicare and commercially insured groups, but little was known about diagnostic coding patterns for Medicaid-insured groups,” said Dragan in an interview.
“We also wanted to provide evidence on whether higher prices from private payers appear to incentivize administrative investments at the hospital level, such as advanced EHRs or highly trained staff,” she explained. “If so, the impact of these administrative investments could spill over and be reflected in the number of diagnoses Medicaid patients receive.”
In a study published in JAMA Health Forum, Dragan and colleagues analyzed data from 1.6 million Medicaid-insured patient hospitalizations between 2010 and 2017. The study population included Medicaid enrollees with at least two admissions to at least two different hospitals in the state of New York. The average age of the patients was 48 years old, 51.4% were women. Overall, 30.1% were white, 28.6% were black, 23.3% were Hispanic, 4.6% were Asian, and 5.4% were of other ethnicities.
Significantly more diagnoses were recorded when the same patient was seen in a hospital with more privately insured patients (0.03 diagnoses for each percentage point increase in the share of privately insured patients, P
Patients first discharged from hospitals in the lowest quartile of privately insured patients received 1.37 more diagnoses when subsequently discharged from hospitals in the highest quartile, and those first discharged from hospitals in the top quartile of privately insured patients received 1.67 fewer diagnoses when they left hospitals in the top quartile. the lower quartile (P
Payment incentives appeared to play a role in the diagnostic codes used, the researchers noted. Diagnoses in hospitals with a higher share of private payers were significantly more likely to involve conditions sensitive to payment incentives, such as neuropathy or the Depression.
“The odds of receiving a commonly coded additional diagnosis increased by 2.50 percentage points when a Medicaid-insured patient was seen in a hospital with 40% privately insured patients compared to when they were seen in a hospital with only 10% of patients privately insured,” the researchers write.
Findings persisted in subgroup analyzes and in a study replication using data from 2016 to 2017, after implementation of the ICD-10 diagnostic code set, with an equally large increase 0.06 additional diagnoses for each percentage point increase in the proportion of private paying patients.
Study results were limited by several factors, including the use of only claims through 2014 in the primary analysis and the inability to determine whether patients choose well-resourced hospitals for more complex conditions. noted the researchers. However, “to the extent that diagnoses drive reimbursement and quality scores, this may create a feedback loop that further benefits highly reimbursed facilities and exacerbates resource inequality,” the authors conclude.
“We were somewhat surprised to see such symmetry and a ‘dose-response’ gradient in the relationship between a hospital’s private payer share and the number of diagnoses coded,” Dragan told Medscape. Although many studies have focused on provider overcoding, “this finding may suggest that there might also be undercoding occurring at the opposite extreme, among providers with a large share of Medicaid-insured patients however, our study cannot say what the ideal level of diagnostic coding would be.”
The impact of incentives remains uncertain
“Documented diagnoses for Medicaid patients may, in part, reflect the makeup of hospital payors and associated administrative style, rather than a reflection of a patient’s true underlying health,” Dragan said in an interview. “Disease surveillance measures or risk-adjusted quality measures, for example, may be affected by this variation in code capture, calling for caution when relying on patient diagnoses,” said she added.
“Future research should aim to document whether this variation in diagnostic coding intensity has downstream implications for treatment or Medicaid patient outcomes,” Dragan said. “In addition, it will be important to better understand the specific actions that hospitals are taking in response to payer incentives, such as modifying the EHR [electronic health record] vendors or training staff, who may be responsible for this observed variation in coding intensity among Medicaid patients.”
A measurement of the risk for the patient is necessary
“Almost all health care reforms require that we can accurately measure patient risk in order to compare providers or insurance plans,” said Andrew Ryan, PhD, of the University of Michigan, Ann Arbor, in an interview. “Factors other than true clinical severity that influence the measurement of patient risk, such as hospitals’ share of private patients, may result in an inaccurate measurement.”
“This is a strong study,” said Ryan, a UM health management professor who was not involved in the research. “The authors found that a higher share of private patients resulted in higher risk coding for Medicaid patients; they attribute this effect to the fact that hospitals with a higher share of private (commercial) patients have greater incentives to code,” he said.
However, “I don’t know if this mechanism is driving the results,” Ryan noted. “For example, I believe the strongest incentives for overcoding risk are for Medicare Advantage patients, and these were classified as public payers by the authors. Instead, I believe the likely mechanism of overcoding is that hospitals with more private patients are better resourced, and likely hired more coders.”
As for further research, Ryan said he would be interested to see if hospitals with more Medicare Advantage patients code more. “I would also be interested in understanding whether hospital investments in coding staff are driving the results,” he said.
The study was supported by the Agency for Healthcare Research and Quality and the Commonwealth Fund. Dragan revealed training fellowships from the Agency for Health Care Research and Quality and the NIH National Institute of Mental Health. Ryan reports no relevant financial relationships.
JAMA Health Forum. Published online September 2, 2022. Full Text
Heidi Splete is a freelance medical journalist with 20 years of experience.