Blog

Medicare Advantage (MA) is the plan of choice for lower-income, older adults, providing coverage to 54% of the nation’s seniors, almost 33 million people. The sustained growth of the MA program over the past two decades is driven by myriad factors, including the availability of plans that charge no premium above and beyond Part B premiums, out-of-pocket caps and the availability of supplemental benefits not covered by traditional Medicare, like dental, vision or hearing services.   

MA boasts consistently positive patient satisfaction scores. But recent regulatory changes, provider frustration with prior authorization processes and negative media coverage have cast a shadow over the MA program, leading some providers and health systems to question its value or altogether exit existing contracts.  

One of the biggest challenges facing MA plans concerns changes to risk adjustment regulations. These changes in turn affect providers. Risk adjustment is complex, and most providers are not well versed on this topic. Let’s break it down and explore how the right partnerships and resources can help providers succeed in the current turbulence that’s affecting the MA ecosystem. 

MA and risk adjustment headwinds

Risk adjustment in MA was designed to ensure equity and fairness in coverage. By adjusting payments to health plans based on the patient’s health status, MA discourages health plans from “cherry–picking” healthy patients. However, the system is grappling with some strong headwinds. 

CMS-HCC V28 pros and cons

The Centers for Medicare & Medicaid Services (CMS) has completed the three-year transition from Hierarchical Condition Categories (HCC) model version 24 to version 28 (V28). According to CMS, V28 is designed to better reflect utilization, cost and diagnostic patterns observed in the Medicare population. The latest changes found in V28 introduce refinements in how conditions are categorized and weighted, referencing ICD-10-CM and phasing out the ICD-9-CM used for the V24 model. Notably for providers, it removes over 2,000 diagnostic codes from the risk adjustment model.  

For those who aren’t well versed on the model, the transition and its impact on risk adjustment scores, this could translate to: 

• Loss of clinically relevant diagnoses: Conditions critical to patient care may no longer be risk adjustable, to the detriment of the patient and the practice. 

• Confusion, friction and frustration: Providers unfamiliar with V28 may struggle to adjust workflows or understand the impact on patient care and practice performance. 

• Increased compliance risk: Inaccurate coding and documentation increases the risk of non-compliance and subsequent legal action. 

Provider perception and behaviors are hard to shift

The healthcare industry has a way to go in educating and convincing providers that risk adjustment is beneficial to their practice and their patients. HCC coding is still widely perceived as additional layers of work put on already overburdened clinicians and staff. Provider burnout remains high. The mental and physical exhaustion that results from excessive interaction with electronic health record (EHR) systems and other digital tools (“click fatigue”) can obstruct the ultimate value of risk adjustment. 

General ambivalence towards MA and exhaustion behaviors like click fatigue not only contribute to provider burnout but create missed opportunities to improve clinical outcomes, streamline practice management and ensure sustainable MA funding. Not to mention they put the clinician’s credentials and signature on the line in the event of compliance audits and legal action. 

Challenges compounded by media coverage

Unfortunately, mainstream news outlets are rife with headlines alleging billing fraud and litigation between health systems and MA carriers, some based on questionable analytics.  

While these accusations are serious and the system far from perfect, sensational reporting and click-bait headlines paint an incomplete and critical picture of MA and risk adjustment’s vital role within the program. These stories can, intentionally or not, mislead providers and their teams. They reinforce the perception of risk adjustment as (at best) onerous or (at worst) useless or risky—while conveniently sidestepping its benefits for patient care, provider revenue and program sustainability.  

What’s at risk when risk adjustment is shaky?

When risk adjustment is misunderstood or undervalued in the MA ecosystem, it creates challenges for patients, providers and health plans alike. 

For patients:

• Missed opportunities for care: Patients may not get access to care management programs they qualify for due to the removal of clinically important conditions from the risk adjustment model.  

• Higher costs and reduced benefits: Inaccurate risk adjustment can result in reduced reimbursements to health plans, which may lead to higher premiums and fewer supplemental benefits for beneficiaries. 

For providers:

• Lost revenue: With inaccurate or incomplete coding and documentation, providers may leave significant revenue on the table from health plan programs and value-based care (VBC) contracts. 

• Reduced access to coding support programs: Fewer resources for coding and documentation, including provider education, could hinder practice efficiency and patient outcomes. 

• Loss of valuable care management resources: Providers need all the support they can get. With inaccurate coding and documentation, they may miss opportunities to refer patients to health plan-provided care management services and other resources that help them care for their patients with chronic and acute conditions. 

The path forward: Education early and often

To overcome these challenges, stakeholders in the MA ecosystem must collectively prioritize risk adjustment education while at the same time reducing administrative burden. From our perspective at Vatica Health, alignment will require a collaborative, multi-pronged approach that starts early and shifts the focus from a mandate or legal requirement to collective opportunity and mutual success. 

1. Start early: Risk adjustment and coding education should begin in residency programs to set the foundation for new providers. 

1. Keep it consistent: Ongoing education, including mandatory CME, can help providers stay updated on risk adjustment regulations and strategies. 

1. Leverage expert partners: Organizations like Vatica Health offer expert coding and documentation support to lighten administrative loads, allowing providers to focus more on clinical care. Vatica’s solution—often available to providers at no charge from their health plans—is designed to support both providers and health plans. It bridges gaps in understanding and is easy to implement, ensuring a compliant, efficient and provider-centered approach to risk adjustment. 

How everyone in the MA ecosystem can succeed 

When players in the MA ecosystem come together to deliver an accurate picture of patient risk, the benefits ripple to all parties. Patients receive better care. Providers see improved outcomes with less administrative burden. Health plans can offer sustainable, high-value benefits. 

Navigating MA risk adjustment can be complex, but Vatica Health is here to help. Together, we can ensure that risk adjustment works for everyone—and that we never lose sight of the ultimate goal: better care for patients and improved outcomes across the healthcare ecosystem.