Category: Compliance

The RADV final rule – strategies for mitigating the impact

By Vatica Health | March 13, 2023 | Compliance, Risk Adjustment

By Brian Flower, vice president of client solutions, Vatica Health

The Centers for Medicare and Medicaid Services (CMS) released on January 30 the long-awaited final rule on Risk Adjustment Data Validation (RADV). The rule includes two significant modifications to the RADV audit methodology used by CMS to address overpayments to Medicare Advantage plans based on the submission of unsupported risk-adjusting diagnosis codes. First, the final rule authorizes CMS to extrapolate RADV audit findings beginning with payment year 2018 (not 2011-2017 as originally proposed) but did not elaborate on the extrapolation methodology. Second, a fee-for-service (FFS) adjuster will not be applied to RADV audit results, which was previously leveraged as a method of normalizing Medicare Part C payment errors against fee-for-service Medicare.

Industry leaders and health plan advocates have expressed concerns. Matt Eyles, president and CEO of America’s Health Insurance Plans, said, “Our view remains unchanged: this rule is unlawful and fatally flawed, and it should have been withdrawn instead of finalized. The rule will hurt seniors, reduce benefits for those who choose MA, and yield fewer plan options in the future.”

Health plans had similar reactions. “While we all can agree that improvements can be made, the failure to adjust for the legitimate differences between Medicare Advantage and original Medicare will have a detrimental effect on the seniors and people with disabilities who rely on the Medicare Advantage program,” the BCBS Association said. “CMS should have implemented a narrower solution aimed at a few bad actors, but instead this overreaching regulation will raise costs, reduce choice and make it more difficult for seniors and those with disabilities to effectively manage their health.”

As analysis of the rule continues, here are a few insights and practical strategies we have shared with our payer and provider clients.

  1. Assess your “thin HCC” risk
    Even while the focus remains on accurate submissions, some HCCs will be easier to substantiate than others in an audit. It is important to understand what percentage of your submissions and Risk Adjustment Factor share would qualify as “thin” (associated with only one or two encounters, especially if significant effort is required to obtain a valid medical record). Understanding your risk will inform decision making on remediation within and after a given measurement period, as well as financial planning. 
  2. Prioritize treating providers
    Invest in programs that inform treating providers and empower them to code directly and accurately in a consistent and submittable manner, in favor of downstream coder abstraction that is not associated with the patient’s care plan. Engaged providers will become better organic coders over time, and a structured process can ensure necessary supporting documentation is reliably collected. In addition, compliant conditions collected shortly after encounters are recognized earlier than retrospective coding, allowing plans to identify open revalidation candidates within, instead of after, the measurement period.
  3. Anchor on primary care
    The clinical benefits of encouraging a strong patient-to-PCP relationship are largely understood. Build a risk adjustment strategy that recognizes PCPs as partners in accuracy and quality capture as well. PCPs are your starting lineup for long-term chronic care management, medication compliance, specialty referrals and testing needed to fully assess many HCCs.
  4. Engage the member
    As scrutiny over coding escalates, payers and providers should collaborate on member engagement to ensure annual visits are performed so that chronic conditions can be properly managed, as well as documented. Medicare Annual Wellness Visits (AWVs) are a great opportunity to engage patients in preventive care. AWVs can also be used as a springboard to participate in health plan-sponsored programs designed to capture accurate clinical documentation and close risk and quality care gaps. This expanded scope, which Vatica Health has dubbed an “Enhanced Wellness Visit,” ensures appropriate care and reimbursement while enhancing performance under value-based care arrangements.
  5. Focus on accuracy above all else
    The final rule can result in more severe penalties, as well as myriad legal actions against payers and providers relating to alleged improper practices focused on boosting risk scores and associated payments. In light of this, at-risk entities should evaluate the compliance (real and perceived) of their current risk adjustment solutions. Consider solutions that produce compliant yield, focus on improving accuracy and completeness of documentation and coding, and include a QI process to validate coding prior to submission.

How Vatica Health can help

Vatica Health is the leading provider-centric risk adjustment and quality of care solution for health plans and health systems. By pairing expert clinical teams with cutting-edge technology, Vatica increases patient engagement and wellness, improves coding accuracy and completeness, identifies and facilitates the closure of care gaps, and enhances communication and collaboration between providers and health plans. The company’s unique solution helps providers, health plans, and patients achieve better outcomes, together. Vatica Health is trusted by many of the leading health plans and thousands of providers nationwide. For more information, visit https://www.vaticahealth.com/.

3 major PCP risks in VBC—and how to reduce them

By Vatica Health | December 1, 2022 | Compliance, Risk Adjustment, Value-Based Care

By Lindsay Dosen, senior vice president of legal and compliance, Vatica Health

As more physician groups move into value-based care (VBC), many are encountering risk adjustment compliance issues they aren’t prepared for. Some of these issues can have serious legal and financial consequences if left unchecked. Preparing for these issues will enable physician practices to successfully transition to, and thrive in, a VBC environment by reducing compliance risk, improving patient outcomes and boosting financial performance. This article focuses on three common VBC compliance risks that PCPs should be aware of—along with recommendations on how best to mitigate them.

Risk 1: Unsubstantiated HCC codes

With the traditional fee-for-service payment models that PCPs have historically operated under, health plans—not PCPs—have primarily focused on accurately capturing Hierarchical Condition Category (HCC) codes for purposes of risk adjustment. However, under VBC arrangements (depending on the type of gain-sharing relationship), PCPs must focus on accurately capturing and documenting HCC codes. Underreporting or missing codes could translate to lost revenue for the PCP. Overreporting or submitting HCC codes that are inaccurate or unsubstantiated could subject the PCP to legal liability and regulatory penalties.

While this has been a major issue for health plans in recent years, this is also becoming a significant compliance risk for PCPs, as regulatory agencies have increased scrutiny of the risk adjustment programs and activities of both health plans and healthcare providers. These regulatory actions often assert violations of the False Claims Act (FCA) based on the government’s position that the risk adjustment payments were artificially inflated due to inaccurate or unsubstantiated diagnoses codes. Violations of the FCA can result in multi-million-dollar fines, not to mention lasting damage to a physician group’s public image and reputation, even when the violations were committed in error and without intentional wrongdoing by the PCP.

Fortunately, there are ways PCPs can protect against this compliance risk. First, PCPs should avoid payment structures that base payment on either a higher number of codes or higher-value codes. These types of payment arrangements are construed by the Department of Justice (DOJ) as problematic because they incentivize over coding and upcoding. Second, PCPs should provide training that reinforces the importance of compliant and accurate coding and that educates their staff about the potential legal, regulatory and financial risks associated with submitting inaccurate or unsubstantiated codes. Last, PCPs should invest in compliance programs that review coding and documentation to ensure accuracy.

Risk 2: Improper medical record review and sign-off

Another common VBC compliance issue that PCPs face is medical record compliance. You would think that the Centers for Medicare and Medicaid Services (CMS) recommended medical record review and sign-off process would be simple and straightforward. And it is—but only if the right person is doing it.

CMS outlines specific requirements as it relates to medical record documentation and risk adjustment diagnosis codes. Submissions with documentation issues could impact the validity of the medical record in a Risk Adjustment Data Validation (RADV) audit, leading to a potential discrepancy for the audited CMS-HCC findings. For a diagnosis to be risk adjustment-eligible, it must result from a face-to-face encounter with an approved provider type. The medical record must have, among other things, a valid signature and credentials for the approved provider. For PCPs, that means not just anyone in the practice can sign off on a medical record. A CMS risk adjustment-approved physician must be present during the face-to-face encounter. The record must also be signed by the CMS risk adjustment-approved provider. Learn more here.

This is an issue that can be easily remedied with proper education and training. PCPs should take steps to make sure that their staff clearly understands the importance of following the CMS guidance related to medical record documentation for risk adjustment. PCPs and their teams should read and be familiar with these compliance guidelines and should develop and implement policies and procedures to ensure compliance.

Risk 3: Vendor non-compliance

A third VBC issue is the misconception that a PCP’s responsibility for compliance is limited to only activities within the practice. If a PCP is working with an outside vendor that is non-compliant, the PCP may also be held liable for the vendor’s compliance violations.

The best way to mitigate this risk is to vet prospective vendors thoroughly in advance to ensure they have a clean compliance record and a strong compliance program in place. When selecting a risk adjustment vendor, PCPs should conduct due diligence to include, without limitation, reviewing information about the vendor’s compliance and security programs, any applicable coding policies and procedures, mechanisms for reporting suspected fraud, waste and abuse, exclusion screening, and any prior enforcement or legal actions taken against the vendor. In addition, a thorough review should be completed of the vendor’s operations related to the services being provided, including coding. Finally, PCPs should be thoughtful when structuring any fee arrangements with the vendor so as not to encourage over coding or upcoding. Payments under the arrangement should be based on the scope and quality of the services performed, without fluctuation (including bonuses or penalties) tied to the value or volume of the diagnosis codes captured.  

Final recommendation: appoint a compliance lead

These three issues are examples of the compliance risks that PCPs operating in VBC are faced with every day. However, they are also examples of how an effective compliance program can help PCPs successfully navigate these issues and substantially reduce risk in VBC arrangements. An important way to ensure the PCP has an effective compliance program is to appoint a compliance lead for the practice. The compliance lead should stay up to date on compliance requirements and guidelines, develop policies and procedures to ensure compliance, provide training, promote awareness, and monitor and enforce compliance within the organization. An effective compliance program, led by a person with knowledge and expertise related to the compliance risks and regulatory requirements that are applicable to VBC, can greatly mitigate the compliance and financial risks to the practice. With compliance adequately addressed, PCPs can focus on delivering efficient, high-quality care to patients, which leads to successful financial performance in a VBC arrangement.