As noted, the school district’s benefit structure for non-Nextera patients likely results in adverse selection. But even without adverse selection, even when patient population is sorted into two groups at equal health risk but with sharply different benefits, the group receiving the more generous benefits can be expected to utilize medical services benefits at a higher rate. Better benefits in themselves generate “induced utilization”.
The ACG® technical manual notes that “where differences in ACG concurrent risk are present across healthcare organizations, it is almost universally attributable to differences in covered services reflected by different benefit levels and cost structures”. But, if different benefit designs can produce different ACG® concurrent risk score differences for equally risky populations, might there be occasions when different benefit designs will produce similar ACG® concurrent risk scores for populations that have different levels of underlying risk?
So it would seem. Members in a group with higher cost-sharing will under-represented for care relative to a group with lower cost-sharing. If the higher cost sharing group was also the less risky group, this “benefit design artifact” would artificially shrink the “true” ACG® concurrent risk score gap. This artifact is a corollary of induced utilization. Note that the Milliman authors expressly called for studies of direct primary care to address induced utilization in addition to population health, and that CMS’s “risk adjustment” process for the individual marker incorporates both risk measurements and induced utilization factors.
One particular result of a benefit design artifact would be a discrepancy between concurrent risk measurements that incorporate clinical information and risk measurements that rely solely on demographics; specifically, a younger population with less generous benefits will have ACG® concurrent risk scores that make it look sicker than it is relative to an older population with more generous benefits.
The Nextera cohort is younger; it looks sicker than its years on ACG® concurrent risk scores; its benefit package requires significantly more cost-sharing; and cohort members presents less frequently for care. The Nextera cohort lands squarely atop a benefit design artifact.
On this basis alone, KPI Ninja’s measured risk difference in ACG® concurrent risk score would likely be an underestimate by an additional measure beyond any shortfall reflecting just adverse selection.
DPC Referee 