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Plan responses to diagnosis-based payment: Evidence from Germany’s morbidity-based risk adjustment

Sebastian Bauhoff, Lisa Fischer, Dirk Göpffarth and Amelie Wuppermann

Journal of Health Economics, 2017, vol. 56, issue C, 397-413

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.

Keywords: Health plan payment; Risk adjustment; Managed competition; Diagnostic coding; German statutory health insurance (search for similar items in EconPapers)
JEL-codes: H51 I1 I13 I18 (search for similar items in EconPapers)
Date: 2017
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Working Paper: Plan Responses to Diagnosis-Based Payment: Evidence from Germany's Morbidity-Based Risk Adjustment (2017) Downloads
Working Paper: Plan Responses to Diagnosis-Based Payment: Evidence from Germany’s Morbidity-Based Risk Adjustment (2017) Downloads
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Journal of Health Economics is currently edited by J. P. Newhouse, A. J. Culyer, R. Frank, K. Claxton and T. McGuire

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