Why are Med Supp Policies Zip Code Rated?

[Frank Stastny]

In Kentucky, people just dip whatever is wrong with them in kerosene to see if that will cure it before they bother the doctor.

You think I'm joking...but I am not joking.

I know you are not kidding. I have seen my grandfather slice his hand open, go to the gas pump, run about a quart of gas on his hand, wrap it in a dirty rag and go back to work. He was a farmer.

Never got infected and healed with no problems.

My uncle tells a story he swears is true, when he was a kid running around barefooted and cut his foot open on a piece of glass. My grandfather told him to get a milking stool, go to the pasture, find a fresh cow pie, sit down and put his foot in it for a while. He said it healed right up.

Goats don't make "pies" so I've never had a chance to try it.

 

[G.Gordon]

I grew up on a 100 year old farm we used terpentine for cuts, worms, or just general ailments. Farm kids get wormy. Put a few drops of terp on teaspoon of sugar and swallow. Clears the problem right up.

 

[Bruce]

While all medicare inpatient claims start at the same "level" of dollar reimbursement based on the applied DRG (Diagnosis Related Groups), they are adjusted by CMS for several factors that impact the actual reimbursement Medicare makes to a given hospital.

1.Indirect Medical Education Costs. "Teaching institution" hospitals have higher costs. DRG payments to these hospitals are adjusted upward. I believe CMS uses some kind of raatio of residents/interns vs hospital beds to determine this adjustment.

2. Disproportionate Share Payments. Hospitals thaqt treat a large percentage of Low income patients get a bump for the cost of treating these people.

3. Cost Outliers. I never really fully understood this but I think it is case-by-case for large dollar patients where costly treatments are used.

4. Wage Index. CMS does indeed adjust the base DRG reimbursement by location, using what they term, I believe, a "prevailing wage index" that is adjusted annually. I believe the "Base DRG" is broken down into two elements, 1. Non-Labor-related costs and 2. Labor-related costs. The wage index is applied to only the labor related costs portion.

Those are the major adjustment factors, I believe. There are some others as well including rural hospitals and specialty hospitals (ie cancer).

I think the wage index used is in here, around page 70.

http://edocket.access.gpo.gov/2008/pdf/E8-23083.pdf

 

[G.Gordon]

All of that is pretty much irrelevant in todays world. Actuarial claims analysis is the bases for all cost/risk relationships. Claims data are readily available for any carrier wanting to enter a market thus they can make a decision as to what price scheme to offer or whether to enter a state at all.

There are four carriers in MO, that I know of, that don't rate on zip code. AARP, Blue Cross, Golden Rule, and Old Surity. Two of these have actually had pretty good rates. One pulled out of the supp market effect 1/1.

The Kansas vs. United World saw this fact when they did battle about the low rates UW wanted to come out with in 2007. The Kansas DOI's actuaries argued with MOO's actuaries that in light of the data there is no way they can offer supps at that price. I and others believe they have someone from Kansas Blue Cross in their pocket, but MOO won out by threatening a lawsuit. The rates we finally got to offer in 07 were close to a year late getting out there due to that battle.

The numbers don't lie.

 

[Yoda]

"Why are Med Supp Policies Zip Code Rated? "
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I know lets ask a medicare expert less then a year into the business fresh off his mentors teet....he knows everything! Why do they make basketballs so damn round?

 

[LoriRutl]

Can anyone explain to me why Med Supp companies charge different premiums for the same policies in the same state based on the zip codes in that state?

In Missouri the premiums for the same policy are a lot more expensive in the St. Louis and Kansas City areas than they are in the rural parts of the state.

Frank

In Oregon it is the same rate for the whole state. The rates are age banded. In Washingon State it is rated by County.

 

[DS4]

Some of you guys are lucky you aren't in California. Anthem Blue Cross has 3 areas. Blue Shield of California has 6 areas. AARP has 4 areas.
The under 65 market is much worse. Blue Shield has 9 areas. My county borders 2 other counties that are in different areas.

 

[somarco]

Why do they make basketballs so damn round?

If they weren't round you would not be able to dribble them. Ever try to dribble a football?

We now return you to your regular programming.

 

[coachd]

I know for a fact that doctors get paid different amounts depending on where they are at. Here in IL the Chicago area is much more. Some carriers see that some people do not go in the city to get care and have cheaper rates than in the city. It also has to do with the level of trama units in that area and how close they are to where you live. I found the higher the rating of tram care closer to you the more you pay.

I have been trying to find a break down for costs by doctors in zipcodes for a while. What is the medicare allowable charge for that zipcode. I have not seen it yet.

 

[rphillips]

Goats don't make "pies" so I've never had a chance to try it.

Don't goats make tarts?