Medicare Risk Adjustment Services
Medicare risk adjustment is a process that Medicare uses to pay health plans. Medicare pays health plans based on the number of Medicare beneficiaries enrolled in the plan, and the risk scores of those beneficiaries. Medicare risk scores are calculated using a formula that takes into account many different factors, including age, sex, race, health status, and use of Medicare services. Medicare risk adjustment is designed to ensure that Medicare pays health plans fairly, and that plans are not unfairly penalized for enrolling sicker beneficiaries. Medicare risk adjustment is also intended to encourage health plans to enroll beneficiaries of all types, including those with chronic illnesses and those who are likely to need more expensive care.
There are many different models for medical risk adjustment within the healthcare system. The Centers for Medicare & Medicaid Service (CMS) risk adjustment model uses the Hierarchical Condition Category (HCC) method to calculate risk scores for Medicare Advantage patients. This method puts related medical diagnoses into groupings based on resource use. Higher category risk scores represent higher anticipated healthcare costs. For example, a diabetes diagnoses, including complications, has a higher risk score and in turn greater anticipated Medicare risk and healthcare costs than diabetes without complications.
HCCs are a grouping of clinically related diagnosis with similar associated cost to the healthcare system. Only those ICD codes that map to an HCC category are used in the risk adjustment processing system. Not every diagnosis will “risk adjust,” or map to an HCC in the Medicare risk adjustment model. Some illnesses and injuries may not be predictive of ongoing expenses, but severe acute diseases and injuries or chronic conditions such as diabetes, heart failure, and chronic obstructive pulmonary disease may pose a continuing financial burden to the healthcare system.
All risk adjustment models rely on comprehensive healthcare analytics and evidence-based reporting of patient care. CMS requires that a qualified healthcare provider describe all chronic conditions and severe diagnoses for every patient, every year, to establish a health profile. Documentation in the content of the medical record must indicate the provider’s plan for patient help or Management, Evaluation, Assessment or Treatment (MEAT) of the condition. Using HCC risk adjustment coding and Medicare risk adjustment software this data is then used to predict health costs for the subsequent contract year. Inaccurate or non-specific diagnoses can impact patient care, outcomes and reimbursement payment for ongoing care of that patient.
The Center for Medicare & Medicaid Services’ (CMS) Hierarchical Condition Category (HCC) risk adjustment model assigns a risk score, also called the Risk Adjustment Factor or RAF medical abbreviation “RAF score”, to each eligible Medicare Advantage (MA) beneficiary. A beneficiary’s medicare RAF is based on the beneficiaries health conditions, as well as demographic factors such as Medicaid and disability status, gender, age, and whether a beneficiary lives in the community or in an institution, like a skilled nursing facility.
Higher risk scores or RAF medical abbreviation “RAF score”, represent patients with a greater than average disease burden. Lower risk scores represent a healthier population view, but may also falsely indicate a healthy population when there is poor chart documentation or incomplete Medicare risk adjustment coding.
Using the Medicare risk adjustment factor system a “risk score” is chosen for each beneficiary according to the patient’s demographics, health status, and other clinical factors. The beneficiary’s risk score depicts the patient’s predicted health costs compared to those of an average beneficiary. The Medicare RAF is a relative measure of the predicted costs to meet the healthcare needs of the beneficiary.
Health plans collect payments for covered members from CMS. A risk adjustment factor system is used to adjust plan payments to ensure fair payment for providing healthcare services and benefits for a population of patients, sometimes know as population health management. The payments are determined by a complex formula that applies the Medicare risk adjustment factor terms to an average payment based on location. Other factors play a role in the payment calculation such as actuarial adjustments related to how the HCC model compares with the fee-for-service population. RAF Medicare scores increase based on the condition count (how many HCC conditions the patient has). There are certain disease interaction algorithms that may increase the risk score. There is also disease hierarchy logic that prevents inflated risk scores - example: the RAF healthcare score will not increase if you diagnose “breast cancer” and “metastatic breast cancer” in the same patient. The hierarchy logic is based on the RAF healthcare score for the more severe illness - metastatic breast cancer “supersedes” breast cancer without metastasis. In this example the Medicare RAF score of the patient related to breast cancer disease is calculated exclusively on the RAF score for metastatic breast cancer.
Medicare and Medicaid risk adjustment is used to modify capitated payments for beneficiaries enrolled in health plans. CMS policy requires that a qualified healthcare provider identify all conditions that may fall within an HCC at least one time, each and every calendar year. Many providers feel this requirement is a time consuming clerical burden on resources! It is challenging to have to look through the complete medical record each year to document and code every HCC related diagnosis. To reduce the burden on physicians and coders, healthcare organizations are beginning to adopt CMS risk adjustment software to help search and capture all the appropriate conditions of each patient in their population. Using computer assisted coding like Medicare risk adjustment software that can synthesize the medical record and quickly associate evidence for HCC related disease helps CMS match insurance payment accurately to the resource requirements of a Medicare Advantage population.
Risk adjustment optimization (RAO) is a process used to manage risk in healthcare. It helps identify which patients are at higher risk for complications or poor health outcomes, and then creates a plan to address those risks. RAO involves using data to create models that predict how likely a patient is to experience a certain health outcome. This information can then be used to develop targeted interventions for high-risk patients.
RAO is an important tool for healthcare providers, as it can help them reduce the overall cost of care and improve patient outcomes. In addition, RAO can help providers meet quality measures and avoid penalties.
There are several different types of data that can be used for RAO, including claims data, clinical data, and demographic data. Claims data includes information on diagnoses, procedures, and medications. Clinical data includes information from laboratory tests, vital signs, and medical records. Demographic data includes information on age, gender, race, and zip code.
Different types of data can be combined to create more accurate models. For example, claims data and clinical data can be used together to create a model that predicts the likelihood of a patient being readmitted to the hospital.
RAO is a complex process, but it is an important tool for managing risk in healthcare. By using data and risk adjustment software to identify high-risk patients, providers can develop targeted interventions that can improve patient outcomes and reduce the overall cost of care.
There are two main types of Medicare risk adjustment: prospective risk adjustment and retrospective risk adjustment.
Prospective risk adjustment is used to calculate Medicare payments to health plans before beneficiaries receive any care. Medicare uses a formula to calculate a risk score for each beneficiary, based on the beneficiary`s demographics and health status. This risk score is then used to adjust the Medicare payment that the plan will receive for that beneficiary.
Retrospective risk adjustment is used to calculate Medicare payments to health plans after beneficiaries have received care. Medicare uses claims data to calculate a risk score for each beneficiary, based on the care that the beneficiary received. This risk score is then used to adjust the Medicare payment that the plan will receive for that beneficiary.
Medicare risk adjustment is an important tool in ensuring that Medicare pays health plans fairly. Medicare risk adjustment is also an important way to encourage health plans to enroll beneficiaries of all types, including those with chronic illnesses and those who are likely to need more expensive care.
Since HCC coding is not intuitive, but accurate HCC coding is necessary to receive fair compensation, the integration of risk adjustment software with electronic health record systems can be extremely effective for risk adjustment optimization. Some specialized medical risk adjustment software platforms can collect available patient data, and using artificial intelligence and medical algorithms, detect HCC related diseases from patient charts and suggest ICD codes that optimize RAF Medicare payments.
With increasing numbers of at risk populations, healthcare organizations need to speed pre-encounter preparation and improve coding productivity standards before a claim is sent. Medicare risk adjustment software with clinical decision support at the point of care makes it easier to close HCC and HEDIS gaps, thereby reducing workload on office staff.
Can your team review every encounter within 24 hours of the visit for accurate HCC coding? Do you need to increase the number of chart reviews per hour? Do your physicians get decision support related to patient disease burden at the point of care? If not, then consider state of the art Medicare risk adjustment software.
When it comes to choosing Medicare risk adjustment software, it`s important to find a solution that fits your specific needs. Not all risk adjustment software programs are created equal, and each one has its own set of features and benefits.