From Tom's Desk

Both Puerto Rico and the Federal Government have the same problem, decreased access to quality healthcare for the underserved.  And both are trying to address this challenge independently.  Taken together, this combination of efforts has created a significant opportunity which could generate huge benefits for patients and the organizations who serve them—that is, if someone with vision will take it.

At the same time as the island commonwealth has dramatically decreased personal taxes for physicians to prevent their outmigration, CMS has begun efforts to shift resources into the care of underserved groups through adjustments in how it calculates its capitation rates, adjustments which should greatly increase the potential revenue of Medicare Advantage plans serving the island.  Add to that the fact that the ratio of primary care clinicians to specialists in Puerto Rico is as close to optimal as it comes and you have a recipe for a Medicare Advantage system that could deliver excellent healthcare, create high levels of clinician engagement and generate long term, accelerating revenue growth.

It’s a unique opportunity for the insurer or integrated healthcare delivery organization with the means and the expertise to execute it. By either leveraging existing or creating new Medicare Advantage networks on the Island, the right group could take these new conditions and create a national model of service, quality and profitability. 

The only question that remains: who’s going to be the first to try?






Puerto Rico y el Gobierno Federal tienen el mismo problema, acceso disminuido a la atención de salud de calidad para los desatendidos. Y los dos están tratando de abordar este desafío independientemente. En conjunto, esta combinación de esfuerzos ha creado una oportunidad significativa que podría generar grandes beneficios para los pacientes y las organizaciones que los sirven, pero solo si alguien con visión lo tomará.

Al mismo tiempo que la comunidad isleña ha reducido drásticamente los impuestos personales para los médicos para prevenir su emigración, la CMS ha comenzado esfuerzos para transferir recursos al cuidado de grupos desatendidos a través de ajustes en cómo calcula sus tasas de capitación, ajustes que deberían aumentar considerablemente el ingreso potencial de los planes de Medicare Advantage que sirven a la isla. A esto se añade el hecho de que la proporción de médicos de atención primaria a especialistas en Puerto Rico es lo más cercana posible a lo óptimo y tiene una receta para un sistema de Medicare Advantage que podría brindar una atención médica excelente, crear altos niveles de compromiso clínico y generar el crecimiento de los ingresos aceleradando a largo plazo.

Es una oportunidad única para la aseguradora o la organización integrada de prestación de servicios de salud con los medios y la experiencia para ejecutarlo. Al aprovechar o crear nuevas redes de Medicare Advantage en la Isla, el grupo adecuado podría tomar estas nuevas condiciones y crear un modelo nacional de servicio, calidad y rentabilidad.

La única pregunta que queda: ¿quién va a ser el primero en intentarlo?

You Should Know...

A series of reports released this week by the CMS Office of Minority Health and the Rand Corporation highlighted differences in quality measures among genders and minorities in the Medicare Advantage program. Although the variations in quality metrics across the groups lead to headlines about “Quality Differences” in the popular media, what’s most striking about the data is actually the extent of the similarities. 

The number of unequal measures favoring one group over the other was about the same for each, except for African-Americans. And herein lies importance of the report. 

These reports are part of the data set that’s driving CMS to change its calculation of risk scores to shift resources towards the underserved. If you’re not front-running this trend and working strategically to expand your services to these newly favored populations, your gross revenues will decline sharply, and without much warning.

With the basic administrative infrastructure of a Medicare Advantage network already in place, organizations and clinicians should find extending care to the underserved not only professionally satisfying but also financially rewarding, with returns significantly greater that when your Medicare Advantage system first started up.

There has always been a moral imperative to extend the benefits of the Medicare Advantage program to the underserved, now there’s a business case as well.

High-Value Insight

Acute myocardial infarctions (ICD-10 I21.xx) can only be coded within 4 weeks of the event. You’d think that this would not be a problem, after all, most MIs are caught either in the ER or in an inpatient setting. However, a stunning number of these codes are submitted as an outpatient, usually as a result of a past history of a heart attack inappropriately coded. The more appropriate code for an MI greater than four weeks out is I25.2, (old MI).

The importance of these distinctions is that an appropriately coded MI is worth a significant bump to your risk score and subsequent capitation, while old MIs are not.

Best practice is for your coders never to accept outpatient MI codes without the date of the event in the associated documentation. Coding an old MI as an acute event is a common and pervasive problem, one which audit contractors recognize as a significant source of revenue that can be easily challenged and clawed back.

Code correctly and you don’t give them that chance.

Q&A with Dr. Tom

My practice has been inundated with representatives from companies who sell software that assist in identifying and extracting risk codes from my EHR. Just how useful are they?

Not as useful as the human brain. Nor as cost-effective.

Many organizations take a passive approach to managing patients under shared-risks systems. They pay their providers fee-for-service and hope to offset the increased costs associated with care inefficiencies through automated code extraction and market share growth.

With the Medicare population set to double in twelve years and no sign of any funding cuts on the horizon, it seems like a reasonable approach— assuming, of course, no changes to the Medicare Advantage program. However, if there are changes, say to offset exploding costs, the awesome fragility of the passive approach will become apparent, and very rapidly.

Here are the problems:

  • Software is expensive to purchase and even more so to maintain, with fixed costs independent of revenue. Your clinician’s brains are already paid for and can be compensated based on your organization’s performance. If there is a decrease in gross revenue, you can adjust their compensation based on that performance. The price for software is far less elastic. And given the dynamic nature of the Medicare Advantage program, the software must be kept continually up to date.
  • Once you select a product, you’re stuck—and they know it. With so much of your revenue tied to software extraction, you are at risk of suffering great disruption if you decide to change vendors. And with the revenue cycle of 12-18 months for most risk-based plans, that disruption can have dire consequences for your organization.


  • As more and more of these risk-code software product are activated, more and more risk codes will be selected and submitted. As more are submitted, the government decreases the revenue associated with each one, decreasing the rate on return on your investment, even as the cost of maintaining the software and its licenses increases.

With the numbers and functionality of risk-code extraction software exploding, it’s much wiser to take a contrarian view—opt for simplicity and invest your money in clinician education, gain-sharing and compliance. The costs are far more elastic, the flexibility greater, and the return much higher. And you’ll be much better able to weather the financial shocks to come.

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