Managing Risk Adjustment Challenges – Tips for Physicians and Payers

Managing Risk Adjustment Challenges – Tips for Physicians and Payers

Proper collaboration between payers and physicians is necessary for both parties to make the most of the risk adjustment process.

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Risk adjustment is meant to discourage insurers from denying coverage to people who are in worse health and likely to need more costly medical care. Under the risk adjustment model, Medicare Advantage (MA) plans are reimbursed appropriately for members’ predicted health cost expenditures by adjusting payment based on demographics (such as age and gender), as well as health status.

Plans that serve higher-risk members receive higher payment. Risk scores that reflect the health status of enrollees are obtained from hierarchical condition categories (HCCs) assigned to members annually. HCCs are based on encounter or claims data collected from physicians. The HCCs used for Medicare and commercial risk adjustment are different.

Therefore, the challenge for physicians is to ensure proper documentation with accurate HCC risk adjustment coding. Claims and encounter data received from physicians are validated annually through a risk adjustment data validation (RADV) audit. The RADV audit is intended to verify the diagnosis codes submitted for payment through medical record documentation ensuring integrity and accuracy.

In RADV audits CMS selects 30 plan contracts and audits 201 members each to validate the HCC’s for which CMS provided a premium. The record must also meet formatting criteria including patient name and date of birth on each page and specific provider signature guidelines. This can be a challenge because the 201 members could comprise of more than 500 HCCs which means retrieving and reviewing over 1000 records over a 16 week period.

The records that best represent the HCC’s are submitted to CMS via the Centralized Data Abstraction Tool (CDAT). CMS then provides a pass/fail for each HCC. After CMS reviews the records, failed HCCs can result in large penalties for the plan. The blame however lies on the providers coding practices.

CMS has only completed three RDV audits so far for a limited number of insurers. process is moving to an annual process for all plans.

This

Insurers and providers must be

diligent to ensure correct documentation and coding focusing on common errors such as active verses history of cancer and acute condition billing. The RADV audits will imminently be a yearly part of most insurers workflows.

Adopting the right strategies can help payers and physicians make the most of the risk adjustment process.

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Phone: 1-800-670-2809

Tips for Payers 

Payers should communicate gaps in care, assessment, and disease documentation to providers to ensure that all diagnoses are documented and coded. This should be done using a two-pronged approach – review of historical claims data as well as medical record review.

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The Healthcare Effectiveness Data and Information Set (HEDIS)which is used to measure performance on important dimensions of care and service should be aligned with risk adjustment performance for maximum advantage. This can be achieved through physician engagement and education, as well as plan member outreach and evaluations.

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Payers can use professional RADV audit services to check if the diagnostic codes submitted by the MA plan are supported by the medical record documentation for a member.

Tips for Physicians 

The amount of the payments that physicians receive in the risk adjustment model will partly depend on how the payer measures the quality of their services. The American Medical Association (AMA) advises physicians to ask payers to inform them about all the applicable risk adjustment factors. Providers should know how the risk adjustment methodology will take account of patient characteristics such as age, gender, diagnosis, socioeconomic status, localized geographic area, family size, and so on.

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Physicians should collect all the necessary information from the patient at the time of care – both immediate issues and previous history. Not doing so would mean missing the opportunity to provide care that can contribute to the patient’s health, improved risk scores and optimal reimbursement.

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Outsourcing HCC risk adjustment coding can ensure that the most precise ICD-10 codes are assigned based on the narrative description of the symptom or diagnosis in the medical chart.

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Physicians’ practices can use analytics to identify the highest-risk patients with the most care gaps.

It’s obvious that payer/provider collaboration is crucial to create greater transparency around health information and for both parties to gain maximum advantage from the risk advantage process.

www.outsourcestrategies.com

Phone: 1-800-670-2809