Tag: cms

CMS-HCC and risk adjustment: everything you need to know

By Vatica Health | December 19, 2024 | Risk Adjustment

Every patient has a story. The question is, are you—as the provider—telling the most important aspects of it, or are you missing critical details? We’re talking about the details that affect the patient’s health status and predict the resources required to care for them—two pieces of information that play a critical role in risk-adjusted payment models.

This article covers some common questions and topics surrounding risk adjustment and HCC coding. It is designed to help providers navigate a changing landscape.

What is risk adjustment in Medicare Advantage?

Risk adjustment promotes fairness and patient access in the Medicare Advantage (MA) program by ensuring that payments to health insurance plans or providers reflect the health status and needs of the individuals they serve. By accurately accounting for the health status of patients, risk adjustment ensures the appropriate funding is available so health plans can cover the cost to address patients’ full burden of illness. Without it, plans might be incentivized to avoid enrolling patients with complex medical needs to reduce costs.

How risk adjustment is calculated in Medicare Advantage

Graphic describes the three-step process involved in risk adjustment. 1. Beneficiaries receive their Medicare benefits via private health plans. 2. The Centers for Medicare & Medicaid Services (CMS) pays these health plans based on the health status of each member. 3. Health status is based on demographic and disease factors. Disease factors are based on the provider coding.

Provider documentation and risk adjustment

The provider—through their documentation—tells the patient’s story using the “language” of ICD-10-CM diagnosis codes. When combined with demographic data and other details, the patient’s health status becomes clearer.

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 on providers and their patients:

  • Financial implications: Under/overpayments or under/overbilling
  • Compliance issues: Legal liabilities, fines and reputational damage
  • Compromised care: Incorrect treatment decisions, delays or unnecessary procedures
  • Healthcare system inefficiencies: Claim denials and payment delays

What does CMS-HCC stand for, and how does it work?

CMS-HCC stands for Centers for Medicare & Medicaid Services-Hierarchical Condition Categories. It is a risk adjustment model used by CMS to adjust payments to MA plans.

Specific ICD-10-CM codes map to specific HCC categories—although not all ICD-10-CM codes map to an HCC category and thus don’t affect risk adjustment. While codes that represent chronic or serious conditions with a significant impact on healthcare costs are represented, the CMS model excludes diagnoses that are vague/nonspecific (e.g., symptoms), discretionary in medical treatment or coding (e.g., osteoarthritis), not medically significant (e.g., muscle strain), or transitory/definitively treated (e.g., appendicitis).

In the CMS model, those conditions that do affect risk adjustment, which are roughly 10,000 out of 70,000+ diagnoses, are grouped into approximately 1,300 diagnostic groups (DXG) that are then aggregated into condition categories (CC). CCs are related clinically and with respect to cost. Hierarchies are imposed among related condition categories. This means that a patient is coded for only the most severe manifestation among related diseases. Hence the term “hierarchical condition categories,” or HCC. HCCs accumulate among unrelated diseases, and the model accounts for interactions between certain conditions for which costs can be exacerbated (e.g., diabetes and congestive heart failure).

The CMS-HCC model uses these mappings to calculate a risk score for each patient, which reflects the expected healthcare costs. This score helps determine the amount of funding provided each month to Medicare Advantage plans. HCCs paint a complete picture of each beneficiary’s acuity to ensure appropriate and accurate funding, effectively managing costs for high-risk members and delivering high-quality care.

Impact of accurate documentation and code capture

Check out the example below that illustrates an $18,500+ difference in payment under the CMS-HCC model based on whether the provider captures accurate diagnoses with maximum specificity.

Graphic illustrates an $18,500+ difference in annual payment under the CMS-HCC model based on whether the provider captures accurate diagnoses with maximum specificity.

Figure 1. Payment by CMS-HCC based on coding specificity

Understand how the CMS-HCC Version 28 Model evolved

A new version of the CMS-HCC model was finalized in 2023 for implementation beginning in calendar year 2024. The new version, V28, replaces the most recent V24. As CMS explains, the existing HCCs that were used in the 2020/V24 model were built using ICD-9 codes, which they had to map to the newer ICD-10-CM codes while waiting for coding practices to stabilize.

For 2024, CMS undertook a CMS-HCC reclassification that involved building new condition categories from the ground up leveraging the increased specificity of ICD-10 coding, reviewing each diagnosis and determining the best grouping of diagnoses. Updating the underlying data and the clinical reclassification is meant to improve predictive ability by better reflecting current disease patterns, treatment methods and costs, and diagnosis and coding practices, says CMS. Some of the noteworthy changes include an expanded number of payment HCCs (115 from 86), changes in ICD-10-CM to HCC mapping (20% fewer codes) and adjustments in coefficient values.

V28 has been phased in over a three-year period. Per CMS: “For CY 2024, risk scores will be calculated as a blend of 67% of the risk scores calculated with the current model (the 2020 model) and 33% of the risk scores calculated with the updated model (the 2024 model). For CY 2025, we expect risk scores to be calculated as a blend of 33% of the risk scores calculated with the 2020 model and 67% of the risk scores calculated with the 2024 model, and for CY 2026, we expect 100% of the risk scores to be calculated with the 2024 model.”

The importance of accurate coding in CMS-HCC V28

Thorough and accurate documentation and coding is always important, but V28 will require even greater specificity in documentation and code assignment. Providers must adapt to the changes to ensure the health and stability of their patients and their practice.

  • Proper risk adjustment: Accurate coding ensures at-risk entities receive appropriate funding to cover the care needs of their enrollees so they can deliver quality care to patients with complex health conditions.
  • Financial performance: For healthcare providers and MA plans, precise coding influences reimbursement rates, maintaining financial stability and supporting the sustainability of healthcare services.
  • Full health picture: Accurate HCC coding reflects the true health status of patients and enables the identification of patients who may benefit from targeted interventions like screenings or medications, ultimately leading to improved patient outcomes.
  • Compliance: Inaccurate coding can lead to compliance issues, including audits and penalties, undermining a practice’s reputation and impacting its bottom line.
  • Data health integrity: Reliable data is essential for public health analysis, research and policy-making. It aids in identifying trends, managing population health and making informed decisions.
  • Benchmarking: Accurate data allows organizations to evaluate their performance accurately, identify areas for improvement and implement strategies to enhance care quality.

CMS-HCC coding best practices

Adhering to best practices ensures compliance, proper risk adjustment and, ultimately, better patient care. Here are some key practices to follow for effective HCC coding.

  1. Perform a valid face-to-face encounter. Note that telehealth visits are considered equivalent to face-to-face interactions and are subject to the same requirements regarding provider type and diagnostic value.
  2. Use the “DSP” acronym as a best practice guide for documentation:
    • D: Diagnosis – Refers to the patient’s active medical condition or health issue that is being treated or monitored.
    • S: Status – Includes the current signs, symptoms and how the disease or condition is progressing (or regressing).
    • P: Plan – Outlines the course of action or treatment plan, which may include medications, procedures, follow-up appointments or lifestyle changes to address the patient’s condition.
  1. Link diagnoses with manifestations using a linking statement or other document.
  2. Add all diagnosed conditions to both the chronic problem list and assessment.
  3. Submit all relevant ICD-10-CM diagnosis codes, including Z codes.
  4. Ensure the medical record includes a legible signature with name, date and credentials
  5. Ensure the diagnoses being billed match the actual medical record documentation.
  6. Always remember the golden rule of medical record documentation.

Optimizing coding with a risk adjustment solution

One way to minimize risk and to increase revenue is to participate in a health plan-sponsored risk adjustment program that helps providers tell the patient’s story as accurately and completely as possible—all while minimizing the impact on staff and internal processes.

What’s behind the move from retrospective to prospective risk adjustment?

By Vatica Health | July 10, 2024 | Provider, Risk Adjustment

Health plans across the country are recognizing the superior value of prospective risk adjustment programs, and rightfully so. These programs have impact at the point of care, as opposed to retrospective programs which are essentially chart reviews. Prospective risk adjustment programs permit timely, effective interventions. This includes presentation of suspected gaps in care and the opportunity to achieve thorough and accurate documentation, which supports coding to the highest degree of specificity.

Conversely, backward-looking retrospective risk adjustment programs limit effectiveness of code capture. A risk adjustment program consisting only of retrospective chart reviews is myopic and does not support the outcomes-driven, population health management focus inherent in most payment models today.

Which one is the optimal approach to risk adjustment? The answer: an effective mix of both. But most important is primary care physician (PCP) engagement. A winning risk adjustment strategy is heavily weighted towards prospective interventions but may need to include some retrospective elements to meet PCPs’ needs.

Prospective programs, while more operationally complex to deliver, are preferred because the ability to impact behavior at the point of care is powerful. It has significant cascading effects, including higher overall value, return on investment and reduced compliance risk. When coupled with PCP engagement, prospective risk adjustment can be the most effective method for obtaining comprehensive insight into the disease burden of a population. Prospective risk adjustment also enables forecasting the cost of care for your Medicare Advantage, Medicaid and commercial lines of business.

PCP engagement is the key to success across all risk adjustment strategies, especially prospective programs. PCP engagement improves care delivery and closes gaps in care by leveraging a proactive approach providing timely clinical and administrative support, education and performance management.

The challenge: Finding a prospective risk adjustment program that engages PCPs

Ideally, health plans and physicians would collaborate to reduce costs and improve health, quality and outcomes. Additionally, members would self-advocate and proactively schedule preventive and wellness visits. Unfortunately, true engagement among all stakeholders in the healthcare continuum is rare and difficult to attain. Physician engagement requires timely, ongoing support. It is essential to augment practices with dedicated clinical resources who curate information to save the physician time by streamlining coding and surfacing gaps in care that require consideration during the encounter.

Furthermore, support staff who provide insights on performance and drive physician engagement are critical. Successful programs supply expertly trained people, easy-to-use technology, turnkey processes and aligned financial incentives to achieve and maintain physician engagement.

Lastly, member engagement is an important piece of the puzzle. Physicians are more likely to engage in programs that drive material clinical improvements for their patients, such as improved outcomes and quality of life.

How Vatica Health can help: Aligning stakeholders around a common goal

Vatica Health is a compliance-first organization that enables a physician-centric approach to risk adjustment and clinical quality. We pair expert clinical teams with cutting-edge technology to work with physicians at the point of care. Vatica Health synthesizes EMR and health plan data to create the most comprehensive and complete view of each patient. We provide comprehensive PCP training as well as 100% clinical coding validation. All unsubstantiated codes are deleted prior to submission of the Vatica record to the health plan sponsor.

Advantages of partnering with Vatica Health

Our licensed registered nurses and administrative staff are dedicated to providing the best experience for PCPs and their office staff. Our attention to documentation and coding validation through Vatica’s quality improvement process improves accuracy and reduces compliance risk. Vatica’s clinical and administrative staff work closely with each practice to develop a custom workflow and process, achieving an ideal state that yields the best results with the least amount of effort for PCPs.

When health plans partner with Vatica Health, they ensure a comprehensive, collaborative and prospective risk adjustment program that’s a win-win for everyone, including patients. To learn more, visit vaticahealth.com.

Advancing health equity with an index

By Vatica Health | May 17, 2023 | Compliance, Risk Adjustment, Value-Based Care

By Jamie Jenkins, PhD, MBA, CPHQ, quality of care director, Vatica Health

Advancing health equity is the first pillar of Centers of the Medicare and Medicaid Services’ (CMS) strategic plan. The Biden-Harris administration has committed to promoting racial equity through government programs focused on underserved communities. To that end, CMS’ 2023 Medicare Advantage Quality Rule released in April 2023 finalized the new Health Equity Index (HEI) for measuring how well Medicare Advantage and Part D plans manage at-risk populations.

What is the index?

The HEI will drive health plans to fully engage and take steps to address the social determinants of health (SDOH) which negatively impact health quality and outcomes.

CMS has defined HEI as an index or single score that encapsulates contract performance for plans whose enrollees face specific social risk factors. The index will use existing data to limit the number of members who are identified as vulnerable. Stratified plan members who receive a low-income subsidy, those with a disability and those who are dual eligible will be in the scoring pool. Health plans should begin analyzing their data and designing programs to support these members.

What are the goals?

The initial goal of HEI is to increase transparency and understanding of plan performance in addressing the needs of members facing social risks. First, the index will be used to identify populations with the greatest needs so that targeted assistance may be granted to communities and providers serving those communities.

Second, the HEI will allow beneficiaries to select plans based on performance on health equity measures. Third, the index would become part of the Star Ratings program which is used to incentivize health plans with bonuses to improve performance. Prior to this new approach, there were no targeted incentives to address disparities among a plan’s enrollees. The HEI would be an added layer encouraging investment in health equity initiatives for Part C and Part D Star Ratings.

Call to action

Health plans have time to begin examining their approaches. The baseline data for the initial calculation of the HEI will be based on calendar years 2024 and 2025. The performance reward will be included in the 2027 Star ratings year.

Health plans can start their data analysis by comparing contracts to one another. For example, plans may consider the variances between those populations receiving a low-income subsidy versus those who are not. Comparing groups will allow plans to determine where support is most needed.

Data collection is key

One of the five priorities outlined by CMS in the framework is expanding the collection and analysis of standardized reporting. The agency seeks comprehensive, interoperable and standardized individual-level demographic and SDOH data. With an increased understanding of members’ needs, CMS plans to leverage quality improvement and other tools to ensure all members have access to equitable care and coverage.  

CMS notes that developments in health information technology have improved the ability to collect health data and measure disparities at the provider level. Vatica Health, for example, provides technology and dedicated clinicians to enable providers to efficiently capture more accurate and complete diagnostic coding and documentation both for risk adjustment and improving quality of care. Vatica’s team of nurses curates relevant clinical data from various sources and creates a pre-encounter provider notification to enable more comprehensive encounters. The notification lists medical conditions, unreconciled medications and targeted quality measures to help the provider efficiently address the patient’s needs during the visit. As part of this process, Vatica can collect race and ethnicity information as well, using CDC specifications.

In summary, this framework is the first step in CMS’ drive toward improving health equity. “Our goals for Medicare Advantage mirror our vision for CMS’ programs as a whole, which is to advance health equity; drive comprehensive, person-centered care; and promote affordability and the sustainability of the Medicare program,” said CMS Administrator Chiquita Brooks-LaSure.

How Vatica Health can help

If you are considering a partner to help improve your Star quality measure performance, consider Vatica Health. We are the #1 rated 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.

A wave of CMS regulatory changes – a new paradigm for risk adjustment

By Vatica Health | April 10, 2023 | Compliance, Risk Adjustment

By Steve Zuckerman, cofounder and chief strategy officer, Vatica Health

Over the last several months there have been dramatic regulatory changes that will have a significant impact on Medicare Advantage Organizations (MAOs). The Centers for Medicare and Medicaid Services (CMS) made sweeping changes to both the audit process and underlying risk adjustment model, based on concerns with coding of conditions that the government claims are not credible predictors of future expenditures. These changes are against the backdrop of a wave of lawsuits and reports by the Office of Inspector General (OIG), alleging billions in overpayments emanating from legacy risk adjustment models such as chart reviews and home assessments.

Risk adjustment is the foundation of Medicare Advantage (MA). It’s a necessary but complicated process that ensures at-risk entities have sufficient funding to provide the appropriate care and resources to members based on their clinical profiles. As membership in MAOs has steadily increased over the last decade, so have the costs, leading to recent reforms. The first blow occurred on January 30, 2023, when CMS released the final rule on Risk Adjustment Data Validation (RADV Final Rule). This rule authorizes CMS to extrapolate RADV audit findings across a health plan’s entire membership base. The practical effect is that audits will be more frequent, and the new extrapolation methodology will likely result in much more significant fines and penalties (CMS estimates it will collect $4.7 billion more from plans over the next 10 years).  

The government’s next initiative to address coding errors and variations occurred on March 31, 2023, when CMS released the Calendar Year 2024 MA Capitation Rates and Part C and Part D Payment Policies (Final Rate Notice), which shifts diagnosis coding from ICD-9 to ICD-10 and removes over 2,000 codes from the Hierarchical Condition Categories (HCC) model. Despite a massive industry-wide lobbying effort from both payers and providers, the new risk adjustment model was adopted. However, CMS did agree to a phased-in approach over three years which represents a meaningful concession.

Finally, on March 27, 2023, a bipartisan senate bill was introduced by Sens. Bill Cassidy, R-Louisiana, and Jeff Merkley, D-Oregon, entitled the “No Unreasonable Payments, Coding or Diagnoses for the Elderly Act.” This bill seeks to exclude diagnoses from chart reviews and health risk assessments in the calculations of a patient’s risk score. While the bill is in the early stages of consideration, it is consistent with the prevailing perspective and momentum away from legacy models and toward involving treating providers in the risk adjustment process.

The phased-in approach under the Final Rate Notice gives MAOs an important opportunity to review their risk adjustment solutions to make sure they will be effective under the new regulatory landscape. Here are a few practical strategies to consider:

  1. Provider-centricity will be more critical than ever. As we transition to value-based care, it is critical for payers and primary care physicians (PCPs) to work together to improve care, outcomes and costs. Accurate risk adjustment is essential to ensure appropriate care for MA patients, the fastest growing healthcare segment. Therefore, it stands to reason that payers and providers should collaborate on risk adjustment and quality initiatives. Further, given the loss of several valuable HCCs under the Final Rate Notice, it will be more important than ever to ensure the capture and clinical substantiation of all risk adjustable conditions. Legacy models are deficient, work around providers, disrupt continuity of care and don’t accompany patient care plans. A better approach is to empower the PCP with tools and resources to perform HCC coding because the PCP has an existing relationship with the patient, direct knowledge of the patient’s history, and real-time access to the patient’s medical records. Enhanced payer and provider collaboration in this regard can produce better clinical and financial performance.

  2. Reevaluate chart reviews and home assessments. Chart reviews and home assessments that lack connectivity to the PCP and don’t impact care are being targeted by the Department of Justice, CMS and OIG. Both may become obsolete if the “No Upcode Bill” is ultimately passed. Lack of clinical oversight and perverse incentives within these legacy risk adjustment models create an environment ripe for error and malfeasance. Another major concern is that they are not coordinated with treating providers and therefore have minimal impact on improving overall population health and value-based care performance. Consider ways to coordinate your chart review and home assessment programs with in-office solutions to keep PCPs at the center of care.

  3. Focus on accuracy. In light of the RADV Final Rule and the myriad of lawsuits and investigations, at-risk entities should invest in solutions that produce compliant yield. They should focus on improving accuracy and completeness of documentation and coding and include a QI process that reviews both additions and deletions to validate coding prior to submission. The shift to value-based care will put even more pressure on payers and providers to use compliance-centric solutions that are focused on improving the accuracy and completeness of diagnoses codes and documentation.

How Vatica Health can help

Vatica Health is the #1 rated 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 provider-centric solution is used prospectively at the point of care, giving the provider control and ensuring continuity of care. The 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 vaticahealth.com.

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/.

In-home risk assessments are under fire

By Vatica Health | October 21, 2022 | Risk Adjustment

A message from our chief strategy officer and co-founder, Steve Zuckerman

On October 17, 2022, the United States filed a lawsuit against Cigna Corporation and its subsidiary Medicare Advantage Organizations, intervening on a lawsuit filed by a whistleblower several years earlier. The lawsuit seeks damages under the False Claims Act for Cigna’s alleged submission of invalid diagnoses codes for purposes of inflating risk adjustment revenue for its Medicare Advantage plan members. Health plans like Cigna are required to report patients’ diagnoses which are used to calculate “risk adjustment” payments to the plan based on demographic information and the health status of patients. Over the last few years, lawsuits against Medicare Advantage Organizations (MAO) have increased significantly, centering around what the government alleges are improper practices focusing on boosting risk scores and associated payments.

The government’s lawsuit against Cigna focuses on diagnosis codes submitted on forms completed by several home assessment vendors. The lawsuit alleges that these vendors did not properly validate the existence of the reported conditions. Further, the diagnoses were not supported by the minimal information contained in the vendors’ forms. The government identified a major flaw in the home assessment vendor process in that it failed to coordinate with the patient’s primary care physician (PCP) or account for the patient’s full medical history. Instead, the home assessment vendors relied on limited data provided by Cigna and self-reported patient information which created an incomplete picture. As a result, according to the government, Cigna was overpaid tens of millions of dollars in risk adjustment payments from the Centers for Medicare and Medicaid Services (CMS).

The government’s action against Cigna is the latest in a string of lawsuits and recent Office of Inspector General (OIG) reports claiming that MAOs have received billions in risk adjustment overpayments. A common theme in these cases and recent OIG reports is that home assessment vendors work around PCPs, instead of with them. Sending a clinician to a patient’s home, without any relationship with the patient or the PCP, has been increasingly scrutinized as it’s viewed as a method to simply improve risk score without improving patient care or outcomes. In fact, going back as early as 2014, in its 2015 Advance Notice Proposal, CMS suggested to “exclude for payment purposes diagnoses identified during at home visits that are not confirmed by a subsequent clinical encounter.”

The mounting scrutiny of home assessments has continued. In September 2021, the OIG issued a report regarding billions in alleged overpayments to MA plans. It specifically criticized home assessments, making the point that the failure to work alongside PCPs raises concerns about the quality-of-care coordination for these patients and the validity of diagnoses. These concerns are being exacerbated by fundamental flaws in the home assessment process, including the failure to consider pertinent patient information contained in PCPs’ electronic medical records and the lack of follow-up with the PCPs to ensure chronic conditions and care gaps identified during the assessment are being addressed.

Despite the flaws with home assessments that are not connected to PCPs, MAOs ultimately bear the responsibility. In our experience, MAOs do not intentionally misrepresent their population risk. They are simply relying on vendors employing legacy programs that have not evolved to meet the current regulatory environment. The shift to value-based care will put even more pressure on payers and providers to use compliance-centric solutions that are focused on improving the accuracy and completeness of diagnoses codes and documentation.

As the pioneer in physician-centric risk adjustment processes, Vatica has emphasized for over a decade the importance of including PCPs in the risk adjustment process. Instead of using third parties with no pre-existing relationship with the patient and no access to the underlying medical record, Vatica’s solution empowers PCPs to improve outcomes while easily completing HCC coding with the greatest level of accuracy and completeness. By pairing technology and dedicated clinical support at the point of care, Vatica enables PCPs to drive the most compliant and accurate risk adjustment results, close care gaps, and improve performance.

A new paradigm in risk adjustment – a shift from collecting codes to impacting care

By Vatica Health | May 7, 2021 | Provider, Risk Adjustment

Development of risk adjustment strategies is often complex and involves input from stakeholders across multiple cross-functional teams. Quality, finance, compliance, operations, and other teams are all stakeholders in the decision-making process. Managed care organizations strive to deploy effective, comprehensive risk adjustment solutions which requires taking into account a number of considerations: effectiveness, regulatory compliance, and patient and provider satisfaction.

When considering the various options available to health plans, there is an emerging trend to shift from retrospective and home assessments to PCP-centric prospective programs. There are a few reasons for this change. Given the established relationships patients have with their PCPs, prospective programs are often the most effective method for addressing gaps in care and ensuring alignment between medical record documentation and coding to the highest degree of specificity. Prospective programs permit real-time alerts of previously diagnosed conditions as well as those that are suspected. The ability to impact outcomes, at the point of care, is powerful.

In contrast, legacy models have very little impact on care and outcomes.  Retrospective review programs deploy teams of coders to review charts and capture codes after the patient encounter has occurred. This backward-looking approach is not only abrasive and disruptive to providers, it is also ineffective in terms of impact on quality of care and patient outcomes.

Home assessments, while prospective in nature, are abrasive and invasive to patients. They are performed by clinicians that typically do not have an existing relationship with patients and do not have access to the EMR where the most valuable clinical information is stored. Furthermore, continuity and coordination of care is often non-existent in that follow-up care is not guaranteed. In fact, a September 2020 report from the Office of Inspector General (OIG) expressed this key takeaway: “Billions in estimated risk-adjusted payments supported solely through HRAs [health risk assessments] raise concerns about the completeness of the payment data, validity of diagnoses on HRAs, and quality of care coordination for beneficiaries.”

The shift from antiquated programs that simply center around collecting codes to PCP-centric initiatives has been accelerated by certain actions and comments made by the Centers for Medicare and Medicaid Services (CMS). Beginning in 2017, CMS began to gradually revise its methodology for calculating beneficiary risk scores to increasingly rely on encounter data. By 2022, the expectation is that the Part C risk score would rely entirely on encounter data. The benefit of encounter data is that it validates the source of the data to ensure that it appropriately meets program requirements. Said differently, validation of treating providers, type, and place of service. These requirements are best addressed through the use of prospective risk adjustment programs.

CMS officials have also been critical of home assessments, previously stating the following: “There appears to be little evidence that beneficiaries’ primary care providers actually use the information collected in these assessments or that the care subsequently provided to beneficiaries is substantially changed or improved as a result of the assessments. Therefore, we continue to be concerned that in-home enrollee risk assessments primarily serve as a vehicle for collecting diagnoses for payment rather than serve as an effective vehicle to improve follow-up care and treatment for beneficiaries.”

In limited circumstances retrospective chart review and in-home assessment programs may be considered as part of an overall risk adjustment portfolio. However, such programs must be carefully and thoroughly evaluated and should only be utilized to address situations where an in-office prospective program is not a viable option.

A well-designed health plan-sponsored risk adjustment program should be easy to implement and very beneficial to PCPs. To do so requires a combination of powerful technology and comprehensive in-office support that seamlessly integrates with physician workflows. It also requires documentation and coding validation and provider education. When health plans and providers partner on risk adjustment and quality programs, great things happen: superior RAF yield, enhanced provider satisfaction that drives revenue and VBC performance, and better clinical outcomes.