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

Citation:

Bauhoff, Sebastian, Dirk Göpffarth, Lisa Fischer, and Amelie C. Wuppermann. 2017. “Plan Responses to Diagnosis-Based Payment: Evidence from Germany's Morbidity-Based Risk Adjustment.” Journal of Health Economics 56: 397-413. Copy at https://j.mp/2nKI7Wx

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-in-difference 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.

Also available as CESIfo Working Paper 6507

Published paper (gated)

Last updated on 06/07/2021