What is risk adjustment?
What is risk adjustment in Medicare Advantage?
Medicare Advantage (MA) beneficiaries receive their Medicare benefits via private health plans. The Centers for Medicare & Medicaid Services (CMS) pays these health plans based on the health status of each member, which is determined by demographic and disease factors. Risk adjustment is designed to promote fairness and ensure that appropriate funding is available to cover the cost of patient care.
Components of risk adjustment
Health status adjustment
This considers the underlying health conditions of each patient, reflecting the fact that patients with chronic illnesses typically require more medical care than healthier individuals.
Demographic adjustment
Factors such as age, gender and socioeconomic status are considered since they can also affect healthcare needs and costs.
Payment models
Payment models vary according to the type of health plan but are designed to ensure that plans enrolling less healthy individuals can cover those increased costs. At the same time, it discourages health plans from not enrolling patients with complex medical needs.
Accurate coding drives
risk adjustment
Hierarchical Condition Category (HCC) coding is distinct from office visit coding, grouping similar diagnoses into categories for risk adjustment payment models. Diagnostic coding plays a critical role in risk adjustment by providing more accurate and comprehensive information about the health status of individuals. If diagnostic coding is inaccurate, it can have significant impacts.
Financial implications
Poor coding can result in under/overpayments or under/overbilling.
Compliance issues
Organizations can be exposed to legal liabilities, fines and reputational damage.
Compromised care
Inaccurate coding can drive incorrect treatment decisions, delays or unnecessary procedures.
Healthcare system inefficiencies
Health systems and medical practices can experience unwanted claim denials and payment delays.
Better risk adjustment
benefits everyone
For patients
Medicare Advantage plans offer additional benefits not covered by Original Medicare
- 97% offer vision benefits
- 91% offer dental benefits
- 94% offer hearing benefits
- 94% offer wellness or fitness benefits
More efficient care than Original Medicare
- 49% lower rate of long-term acute care hospital stays
- 13% lower in-patient hospitalization costs
- 43% lower rate of potentially avoidable hospitalizations
- $1,965 less in total annual out-of-pocket spending
Highly satisfied patients
98% of MA beneficiaries stay with MA plans due in part to long-term relationships with their PCPs
Source: Better Medicare Alliance
For providers
- The ability to identify and close care gaps
- Better coding improves the accuracy and completeness of health records, enabling proactive identification of patient needs and targeted interventions
- The opportunity to offer programs not covered by Original Medicare
- Care management programs like disease and medication management, lifestyle coaching and preventive screenings give PCPs an extra hand in caring for patients with complex conditions
The key to effective
risk adjustment:
making coding easier
Vatica provides clinical teams plus user-friendly technology at the point of care to help providers capture more accurate and complete diagnostic codes that lead to more accurate reimbursement from CMS.
How Vatica Health
supports risk adjustment
Dedicated clinical and administrative support
Vatica licensed nurses and administrative support staff are assigned to each practice, helping PCPs capture more accurate and complete diagnosis coding and documentation.
Comprehensive data
Vatica synthesizes EMR (via EMR access) and health plan data to create the most comprehensive view of each patient.
Intuitive technology
Vatica’s technology is both powerful and easy to use, driving efficiency and surfacing clinically appropriate codes.
Additional resources
Working with Vatica, PCPs receive health plan program revenue for each completed visit. Health systems and medical practices often use this funding to hire staff and provide services such as care management, behavioral health and enhanced pharmacy services.
Hear from our customers
“Using Vatica has helped immensely with our quality program and identifying gaps in care. We’ve seen an improvement to risk adjustment accuracy of more than 10%.”
General Physician PC, New York
“I find the process to be very easy, and we get valuable information. Vatica collects data from different providers and presents it to us in one place—it’s a one-stop shop.”
Nuestra Clinic, Texas
“For patients who are part of the Vatica program, we have frequently identified conditions that weren’t on the radar or were buried in the chart. Our clinical teams don’t have the bandwidth to do a deep dive and find those things. Vatica gets these conditions on the radar, and they get the attention they deserve. It reduces the risk of morbidity and mortality because they aren’t missed. I like Vatica’s approach to risk assessment. It’s very user-friendly; the interface is great.”
NEMG, Connecticut
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