Medical care cost of Medicare beneficiaries with vision loss

The Hierarchical Condition Category (HCC) Risk Adjustment Payment Model developed by the Centers for Medicaid and Medicare evaluates the diagnosis codes in a beneficiary's claims from one year, along with age, sex and other factors to determine a beneficiary's risk score. We applied the HCC methodology to analyze data from the Medicare 5% Sample datasets for 2003 and 2004 to determine if beneficiaries with vision impairment are at an increased risk of incurring medical care costs. Previously (APHA 2007), we analyzed data from the Program of All-Inclusive Care (PACE) and found that health care cost risk attributable to vision loss is not captured by HCC risk adjustment method and understates cost by about 13%. In this analysis of the Medicare 5% sample data, we found that the HCC model under-predicts costs incurred by individuals with severe visual impairment by about 17%. We hypothesize this is due to additional morbidity and treatment patterns associated with visual impairment. In addition, a lack of understanding by the health care community of how to properly address care issues in individuals with vision loss continues to result in excess costs, a finding Morse, et al. (Arch of Ophthal., 1999, 117, 943-949) previously noted. The current analysis provides additional evidence that health care cost risk attributable to vision loss remains inadequately recognized and captured by current risk adjustment methodology.