CMS Chooses DCG Model to Set Payments for Medicare+Choice.

Business/Technology Editors & Health/Medical Writers

BOSTON--(BW HealthWire)--April 15, 2002

DxCG(R), Inc., a leading provider of software tools that predict health care expenses, announced today that the Centers for Medicare & Medicaid Services (CMS) has selected one of the Diagnostic Cost Group/Hierarchical Condition Category (DCG/HCC) models as the risk adjustment tool for use in Medicare+Choice.

DxCG founders and senior scientists Gregory C. Pope, Randall P. Ellis, Ph.D and Arlene S. Ash, Ph.D have worked closely with CMS for nearly two decades developing and refining the DCG models.

Health Economics Research (HER) of Waltham, Mass. developed the CMS version of the DCG models under CMS contract. The model consists of 61 disease groups deemed significant because they are relevant for risk-adjusted payment and have been included in the model because of their statistical and clinical significance for the Medicare population. Additionally, the model is site neutral to discourage unnecessary hospitalization. The model will be implemented in 2004.

"In an effort to ensure that the Centers for Medicare & Medicaid Services pay health plans more accurately and fairly, we are implementing a revised DCG/HCC model for our new risk adjustment approach," said Jennifer Boulanger, deputy director of the Center for Beneficiary Choices at CMS.

"We are confident that additional payors and plans will standardize on this model," stated Marilyn Schlein Kramer, president and CEO of DxCG. "This announcement reinforces our mission to ensure equitable and efficient healthcare by ensuring fair payments."

DxCG is the only company that supports the DCG family of models and plans to incorporate the CMS-revised version of the DCG/HCC model into its software offering.

About CMS

The Centers for Medicare & Medicaid Services (CMS) is a federal agency within the U. S. Department of Health and Human Services. CMS runs the Medicare and Medicaid programs, two national health care programs that benefit about 75 million Americans. And with the Resources and Services Administration, CMS runs the State Children's Health Insurance Program (SCHIP), a program that is expected to cover many of the approximately 10 million uninsured children in the United States.

About DxCG, Inc.

DxCG promotes fair and efficient health care by providing software tools to more accurately plan, budget and evaluate health care management programs. More than 120 clients, covering more than 40 million lives, use the company's Diagnostic Cost Group and RxGroups(R) predictive models to negotiate health-based payments, identify opportunities for disease management, profile physicians and evaluate managed care programs. DxCG clients include Blue Cross Blue Shield of Michigan, Highmark Blue Cross Blue Shield, Kaiser Permanente and Pacific Business Group on Health. Recognized by leading independent researchers as the most proven models available, DxCG's methodologies are used by the federal government to set payment rates for the Medicare+Choice program. For more information, visit the company's web site at www.dxcg.com.