Plan Responses to Diagnosis-Based Payment: Evidence from Germany's Morbidity-Based Risk Adjustment

46 Pages Posted: 23 Jun 2017

See all articles by Sebastian Bauhoff

Sebastian Bauhoff

Center for Global Development

Lisa Fischer

German Federal Social Insurance Office

Dirk Göpffarth

North Rhine-Westphalian State Chancellery

Amelie C. Wuppermann

Ludwig Maximilian University of Munich (LMU) - Faculty of Economics

Date Written: June 08, 2017

Abstract

Many competitive health insurance markets adjust payments to participating health plans according to their enrollees’ risk – including based on diagnostic information. We investigate responses of German health plans to the introduction of morbidity-based risk adjustment in the Statutory Health Insurance in 2009, which triggers payments based on “validated” diagnoses by providers. Using the regulator’s data from office-based physicians, we estimate a difference-indifference analysis of the change in the share and number of validated diagnoses for ICD codes that are inside or outside the risk adjustment but are otherwise similar. We find a differential increase in the share of validated diagnoses of 2.6 and 3.6 percentage points (3-4%) between 2008 and 2013. This increase appears to originate from both a shift from not-validated toward validated diagnoses and an increase in the number of such diagnoses. Overall, our results indicate that plans were successful in influencing physicians’ coding practices in a way that could lead to higher payments.

Keywords: Health Plan Payment, Risk Adjustment, Managed Competition, Diagnostic Coding, German Statutory Health Insurance

JEL Classification: H510, I100, I130, I180

Suggested Citation

Bauhoff, Sebastian and Fischer, Lisa and Göpffarth, Dirk and Wuppermann, Amelie C., Plan Responses to Diagnosis-Based Payment: Evidence from Germany's Morbidity-Based Risk Adjustment (June 08, 2017). CESifo Working Paper Series No. 6507. Available at SSRN: https://ssrn.com/abstract=2990961

Sebastian Bauhoff (Contact Author)

Center for Global Development ( email )

2055 L Street NW
Washington, DC DC 20009
United States

HOME PAGE: http://scholar.harvard.edu/bauhoff/

Lisa Fischer

German Federal Social Insurance Office ( email )

Friedrich-Ebert-Allee 38
Bonn, 53113
Germany

Dirk Göpffarth

North Rhine-Westphalian State Chancellery ( email )

Stadttor 1
Düsseldorf, 40219
Germany

Amelie C. Wuppermann

Ludwig Maximilian University of Munich (LMU) - Faculty of Economics ( email )

Ludwigstrasse 28
Munich, D-80539
Germany

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