The Medicare+Choice plans offered in the counties with the bulk of beneficiaries are due to receive the minimum increase of 2% in 2004, the CMS said, although the plans offered in most counties will receive reimbursements above the minimum. The estimates are preliminary and final 2004 rates for all counties will be announced on May 12. The CMS also announced it is phasing in more accurate risk-adjustment methodologies for health plans that enroll the sickest patients. Currently, Medicare+Choice health plans are paid on both a capitated basis and risk-adjusted basis for inpatient hospital diagnoses only. Next year, payments will include risk adjustments based on diagnoses from outpatient and physician settings as well.
Risk adjustment looks at a person's diagnosis during one year and anticipates whether any additional costs will be necessary for that person and how much. The CMS has eight years to phase in the risk adjustment payment method. -- by Tony Fong