Tag: Risk Adjustment

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.

Key metrics for value-based care

By Vatica Health | November 18, 2024 | Value-Based Care

Value-based care (VBC) is designed to incentivize providers to improve outcomes in a cost-efficient manner. In other words, payment and quality of care are inextricably linked. Understanding how VBC payments and penalties are calculated can help you better prepare and operationalize your VBC action plan—no matter where you are on the adoption timeline. In this article, we discuss how quality and cost intersect to help providers optimize practice performance in a VBC world.

Key metric 1: Quality

Two of the most critical components of any VBC arrangement are risk adjustment and quality reporting. This is because success in VBC depends on accurately assessing the clinical needs of your population and reporting these needs so that your payments will be sufficient to deliver appropriate care.

The challenge is that risk adjustment and quality reporting are labor-intensive and predicated on a complex set of rules, which frequently become a stumbling block for practices. Because of the complex payment methodology associated with risk adjustment, appropriate coding specificity is needed to accurately report chronic conditions. Without this specificity, plans and PCPs may end up with artificially low patient risk scores, resulting in insufficient funds to deliver adequate levels of care.

Similarly, PCPs must adhere to the reporting standards for quality gap closures. Deviation can result in sub-standard outcomes. For practices that lack specialized coding and quality technology, as well as properly trained staff, keeping up with these activities is a significant challenge.

Other measures relate to preventive health, such as ordering mammograms or colonoscopies. These routine activities are critical metrics for the health plan. Whether they’re process, outcome or preventive health metrics, it’s important that you understand all measures in your VBC programs and how they impact your financial performance.

Whether they’re process, outcome or preventive health metrics, it’s important that you understand all measures in your VBC programs and how they impact your financial performance.

Data for some measures come from standardized patient surveys such as the Consumer Assessment of Healthcare Providers and Systems (CAHPS®) or the Health Outcomes Survey (HOS). Health plans use these surveys to understand how patients feel about access to care, their perception of the quality of care at their physician’s office, and how they feel about their overall health. The questions are not related to the patient’s health insurance benefits; instead, they correspond to the care they receive from their physicians. It’s obvious how physicians influence the responses and why health plans want to partner with physicians to improve scores.

How providers are compensated

Quality of care compensation typically will be paid on a per-patient basis. For example, every time a hemoglobin A1C is ordered or you get a patient’s LDL below 100, the health plan will make a certain payment, usually on a quarterly or monthly basis.

Other VBC models involve a unique set of quality measures. Five or 10 may be needed to achieve a minimum threshold. Or seven out of 10 quality measures are needed to earn a bonus. This is typically the way quality measures are used in a model. A minimum is needed to qualify for a bonus. The bonus dollars associated with achieving a result higher than the minimum can be paid out on a per-patient basis or on the population of patients attributed to a given provider.

Key metric 2: Costs

Costs can be measured in several different ways:

  • Medical loss ratio (MLR)
  • Medical expense ratio (MER)
  • Medical claims ratio (MCR)

All these methods involve taking medical expenses for your patients and dividing them by the premium that they’ve received for that patient. This is the risk-adjusted premium. Another way that it’s measured is by looking at the absolute cost per member—often expressed as per member per month (PMPM). Health plans take the claims expense for attributed patients and divide it by the number of patients you have. This produces a PMPM, regardless of what the measure is.

A common model uses hospital admissions, readmissions and ER visits. Those are big drivers of cost for a health plan. Sometimes, instead of using medical expense ratios or claims PMPM, plans will drive a penalty or bonus program from some of these key utilization metrics. Sometimes, those metrics will be expressed per 1,000 patients so plans can normalize that data. If your practice has 500 patients with a health plan, and there are 10 hospital admissions that month, you might see the metric described as “20 admits per 1,000.” The health plan is creating a standard across all practices so that they can compare results among practices and benchmark how each is doing. Note that some of these programs are purely based on quality, without any cost component.

A study by analysts at Harvard and Humana found Medicare Advantage members treated by doctors in advanced VBC models had 5.6% fewer hospitalizations and 13.4% fewer emergency department visits.

VBC cost vs. quality metrics

It’s important to understand both the quality and cost metrics and any relationship between them. In some cases, PCPs may need to achieve a minimum quality standard before earning any quality or cost bonus. In other cases, there are no minimum thresholds for quality; PCPs are paid as certain benchmarks are met. It matters because more and more of a PCP’s compensation is going to be tied to VBC. CMS expects all Medicare payments to go through value-based models by 2030. Those payments or penalties are calculated by using these metrics. It’s critical to understand what each of the metrics is, how the penalties or bonuses are calculated, and how you are doing today relative to the program’s maximum penalties or bonuses.

Operationalize your VBC plan

Download the full VBC white paper to learn the key action items to develop and implement a VBC program and the steps needed to improve an existing one.

Medical group improves risk accuracy and closes care gaps

By Vatica Health | July 12, 2024 | Provider

Healthcare providers are under greater pressure than ever before and are forced to manage various competing demands for their time and attention. As the transition to value-based care accelerates, so does the need to collaborate with health plans to ensure complete, accurate coding and documentation to inform better risk adjustment and for Primary Care Physicians (PCPs) to actively identify and close care gaps. Patients also want (and deserve) quality healthcare interactions that recognize their unique needs, conditions and circumstances.

Against this backdrop, a lot is riding on the annual patient visit. Amid packed schedules, PCPs need to assess risk, address HEDIS gaps and ensure their patient is properly heard and cared for, with all questions answered and concerns addressed. 

At the same time, PCPs are chronically short on time and resources needed to complete required coding and documentation—often putting in two extra hours a day just to get through EMR backlogs. The continued rollout of CMS-HCC Model V28 will require even greater coding expertise and scrutiny, a troubling proposition for already-strapped providers who are facing burnout at alarming rates. 

Fortunately, by prioritizing and embracing accurate diagnosis coding—and drawing on expert partners like Vatica Health to help upskill PCPs and relieve the admin burden—providers can better identify and manage patient risks, close gaps in care, stay in compliance with evolving guidelines and, ultimately, thrive in a value-based care world. 


Putting PCPs at the center of risk adjustment 

General Physician, PC, one of the largest and most respected medical groups serving Western New York and Northern Pennsylvania, has made it their mission to deliver quality care that’s second to none. Vatica partners with General Physician, PC to overcome the mounting complexity of risk adjustment and lessen the load associated with coding and documentation.

At the 2024 RISE Conference, Richard Charles, MD, Chief Medical Officer and Physician Lead for General Physician, PC, shared his group’s Vatica journey and the role accurate and complete coding and documentation play in helping close care gaps and deliver top-notch care. 

Dr. Charles’ PCPs—like many—needed support on the risk adjustment journey. Dr. Charles and Vatica knew they needed to shift the group’s perceptions that risk adjustment is a benefit only for health insurers and engage the team purposefully in striving for accurate coding and documentation. “There’s been considerable education of our providers around risk assessment,” says Dr. Charles. 

As providers continue to evolve their approaches and protocols in the name of value-based care, continued coaching and education around the upsides of improved risk adjustment—fair and accurate compensation, greater continuity of care, more proactive and higher-quality interactions and more—will separate the leaders from the pack.


“There’s been considerable education of our providers around risk assessment.” 


— Richard Charles, MD, Chief Medical Officer and Physician Lead, General Physician, PC


Empowering teams to deliver quality care

Vatica provides clinical teams plus user-friendly technology at the point of care to enable PCPs at General Physician, PC to capture more accurate and complete diagnostic codes, which helps optimize risk adjustment and leads to accurate CMS reimbursement. A prospective program not only benefits health plans—it helps providers proactively manage care with a comprehensive pre-visit workup of all active and suspect conditions aggregated from various sources. 

Curating only validated conditions and codes prior to the encounter, Vatica empowers PCPs to address HEDIS gaps through necessary interventions, like screenings or medication adherence, and make the most of their time with patients. “That pre-visit summary gets our providers thinking about not just the conditions but what care management is needed,” Dr. Charles explains. “It helps our providers build trust with patients.” 

Vatica also provides group training, one-on-one education and CME courses to help PCPs and their teams understand and overcome the complexities of coding and capitalize on the benefits of better risk adjustment. 


Closing gaps and opening doors

Dr. Charles cites a 10% improvement in risk score accuracy since General Physician, PC partnered with Vatica. He also found specific improvements in hemoglobin A1C levels and blood pressure control, attributed in part to Vatica’s process. “There’s a tremendous improvement in how many HEDIS gaps and how many other care gaps we’ve closed,” he says. 

“There’s a tremendous improvement in how many HEDIS gaps and how many other care gaps we’ve closed.” 

— Richard Charles, MD, Chief Medical Officer and Physician Lead, General Physician, PC


Figure 1: YoY Performance 2021–2023


General Physician, PC has capitalized on improved risk adjustment by using the newly captured revenue to offer additional services. These services give physicians valuable resources to help patients address issues and more time to focus on other clinical tasks and priorities. “We have a large clinical pharmacy program that addresses polypharmacy, high-risk drugs, transition of care, diabetes. We have nutrition, behavioral health, all of which are funded from these dollars,” explains Dr. Charles. “When a patient hears about all the services you have, they become more engaged.”


“We have a large clinical pharmacy program…nutrition, behavioral health, all of which are funded from these dollars.” 

— Dr. Richard Charles, Chief Medical Officer and Physician Lead, General Physician, PC


Better coding in the name of better care

Accurate and complete coding benefits the provider, the practice and the patient. With Vatica as part of its risk adjustment protocol and clinic ecosystem, General Physician, PC has reduced the administrative burden on its team and optimized its diagnosis coding practices. And for Dr. Charles, that goes well beyond time savings or even compliance: “We want to take great care of these conditions, not just document that [patients] have them,” he concludes. 

Maximizing quality of care. Minimizing admin load.

By Vatica Health | July 12, 2024 | Risk Adjustment

Effective risk adjustment drives value-based care performance and promotes fairness and equity in the Medicare Advantage (MA) program by ensuring that payments to health insurance plans and providers reflect the health status and needs of the patients. 

The keyword here is effective. For risk adjustment to deliver on its purpose and its promise, all parties involved—patients, providers and payers—must be coordinated and aligned. The trouble is, legacy programs, such as Health Risk Assessments (HRAs) completed by in-home assessment vendors, remain disconnected from treating providers. While HRAs can be a helpful tool in identifying active conditions, diagnoses captured in HRAs are often not recorded in a subsequent medical visit. Detached programs and practices can undermine the purpose of risk adjustment, increase the risk of non-compliance with evolving regulatory requirements and fail to adequately support and incentivize providers in their transition to value-based care (VBC).

The modern healthcare ecosystem is increasingly complex. Risk adjustment programs that exclude the Primary Care Physician (PCP) are inefficient, create provider-patient friction and amplify risk. Physicians and their teams need a risk adjustment solution that makes coding and documentation easier and leads to high-quality outcomes for their practice and their patients.

Here’s how Vatica Health’s one-of-a-kind risk adjustment and quality of care solution can complement current coding and documentation processes and enhance risk adjustment without overextending staff or sacrificing precious time and resources. 

1. Prioritizes coding accuracy and completeness


Why it matters

Accurate coding is the backbone of effective risk adjustment, ensuring risk scores are calculated correctly and reflect the true health status of enrollees. HRAs, typically performed in-home by vendors on behalf of MA plans, can lead to inflated HCC scores and compromised care.


How Vatica delivers

  • Point-of-care integration: Vatica works at the point of care and proactively surfaces the most appropriate and up-to-date conditions for PCPs to validate. Physicians can focus on their patient interaction, knowing they have a complete and accurate picture of the patient’s conditions.
  • Holistic data collection: Unlike other solutions, Vatica collects and analyzes data from various sources, as well as unstructured data, including consult notes and medical images, offering a more comprehensive picture of a patient’s health. No need for PCPs to connect the dots between various systems and sources.
  • Clinical review: With Vatica, 100% of patient encounters are reviewed by clinicians, such as RNs with advanced coding certifications. This ensures accuracy, completeness and compliance—and offers peace of mind for PCPs.


2. Works with and for providers


Why it matters

Any risk adjustment solution that providers adopt needs to reduce friction, not add to the already taxing administrative load. A flexible and user-friendly solution that meets PCPs where they are ensures effective and robust use, promoting better outcomes for everyone.


How Vatica delivers

  • Provider-centric approach: Comprehensive pre-encounter work performed by Vatica clinicians arms providers with the most clinically relevant information to deliver the highest quality of care during patient visits. Providers remain at the center of care to diagnose, document and follow up.
  • Workflow compatibility: Vatica’s EMR-independent technology works within existing workflows, meeting providers where, how and when they work. 
  • Administrative support: The unique Vatica model includes expert clinician coding support, allowing PCPs more time to deliver high-quality care and assuring that coding and documentation will be accurate, complete and compliant.
  • Payer-agnostic: Vatica is payer-agnostic. Clients include most national health plans and many regional plans. 


3. Supports better outcomes for patients and PCPs


Why it matters

Accurate risk adjustment is a cornerstone of value-based care. Continuing to rely on legacy programs like HRAs and chart reviews that might not reflect the true status of health—and can lead to inflated HCC scores and inaccurate risk-adjusted payments—flies in the face of VBC principles and sets providers back in their journey.


How Vatica delivers

  • Help in identifying care gaps: Vatica flags open HCC coding and care gaps for PCPs to address during encounters. Real-time clinical data assists providers in addressing HEDIS measures during their interaction.
  • Accurate VBC benchmarking: Vatica empowers providers to make the PCP visit the foundation for VBC benchmark accuracy. PCPs can deliver continuous, more effective care and build stronger patient relationships. 
  • Revenue opportunities: Vatica helps PCPs earn additional revenue through reimbursable visits, health plan incentives and enhanced VBC performance.


Better risk adjustment benefits everyone

Vatica Health’s Best in KLAS® risk adjustment solution is designed to help health plans, providers and patients achieve better outcomes, together. By increasing patient engagement and wellness, improving coding accuracy and compliance, and helping identify and close gaps in care, Vatica helps ensure that everyone benefits.

Another blow to detached health risk assessments

By Vatica Health | June 4, 2024 | Provider, Risk Adjustment, Value-Based Care

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

Health Affairs recently published a study of data from 4 million Medicare Advantage (MA) members indicating that health risk assessments (HRAs) contributed up to $12 billion per year to risk adjusted payments in 2020. This is based on conditions that were submitted exclusively by an HRA (not submitted through another encounter) during the 2019 calendar year. The study implies that HRAs, typically performed in-home by vendors on behalf of MA plans, can lead to inflated hierarchical condition category (HCC) scores. More specifically, of the 44.4% of MA beneficiaries who had an HRA, HCC scores increased on average 12.8%.   

Study authors go a step further by segmenting contracts as low, medium and high, based on the HRA’s effect on risk score at the contract level. This may provide insights into HRA program design by the plan, e.g., which patients are targeted and how HRA outcomes are subsequently attached to care management.   

For nearly a decade, the Centers for Medicare and Medicaid Services (CMS) and the Office of the Inspector General (OIG) have expressed concern with the improper use of HRAs to inflate payments, rather than to improve care and outcomes. While HRAs can be a helpful tool for plans to identify all active conditions on an annual basis, the disconnect or “detachment” arises when diagnoses captured in HRAs are not recorded in a subsequent medical visit. This undermines the purpose of risk adjustment, which is designed to compensate plans based on the expected costs of delivering benefits to enrollees.    

Key observations 

  • The population was designated as follows: 20% low, 15% high and the remaining 64% in the medium cohort. 
  • While comprising only 15% of enrollees, the high cohort accounts for 48% of the total HRA risk-score increase. 
  • The HRA rate was much higher in the high contracts (77.9%) than low contracts (39.5%). 
  • Quality ratings favored low cohort contracts with 85% 4 stars or better vs high cohort contracts at 56%.  
  • Provider and health system integration was dramatically higher in the low vs the high contract cohort.   
  • Comparing the high and low contract cohorts, while the overall HCC score was 18% higher, medical expense was 9% lower (estimating from the plan payment and medical loss ratio values provided). 

Extrapolating on the points above, PCP-integrated risk adjustment solutions drastically reduce the risk of detached HRA outcomes and quality performance. This stands to reason because the patient’s PCP is prioritizing healthcare outcomes and management of chronic conditions, rather than focusing exclusively on code capture.     

The correlation between HRAs and coding intensity is particularly relevant given the Risk Adjustment Data Validation (RADV) Final Rule, which authorizes CMS to extrapolate RADV audit findings beginning with payment year 2018, applying the error rate from a sample, and the associated financial penalties, across a broader population of the Medicare Advantage Organization’s contract. In a RADV audit, conditions supported by a single encounter, like detached HRA visits, are at higher risk because there are no additional medical records to fall back on if there is an access, accuracy, or completeness issue with the primary record.  A PCP-integrated approach encourages follow-up care and additional documentation to support valid diagnoses.   

It should be noted that this study uses the 2020 CMS risk adjustment model.  We expect the exclusive impact of HRAs on risk scores would be tempered by as much as 40% using the 2024 risk adjustment model, which is being phased in now and will take full effect for 2025 dates of service. 

Conclusion  

At-risk entities should evaluate their current risk adjustment programs and focus on solutions that produce accurate and compliant coding accuracy that dovetail with quality and health outcomes. Legacy programs, such as retrospective chart reviews and HRAs completed by in-home assessment vendors, should be augmented with a provider-centric approach. Build a risk adjustment strategy that recognizes PCPs as partners in accuracy and quality capture, as well. PCPs are best positioned to capture all existing conditions and to address the CMS and OIG’s concerns by connecting the dots between accurate HCC capture and improved care and outcomes. 

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/.

Elevating risk adjustment by activating physician participation

By Vatica Health | March 3, 2023 | Risk Adjustment

As the pandemic subsides, many PCP groups are seeking to restart or ramp up value-based care (VBC) initiatives that took a back seat to battling COVID for the past two years. The economic impact of COVID on PCPs heavily reliant on fee for service and the looming recession will only accelerate the transition to VBC. However, it does come at a time when many providers are short-staffed and feeling overwhelmed.

A recently-released three-year study by JAMA revealed that, between the fall of 2019 and early 2022, the percentage of healthcare workers who perceived emotional exhaustion in their workplace climate increased from 53.3% to 64.9%. The unfortunate reality is that many physicians are struggling with burnout which has been greatly exacerbated by the multi-year COVID crisis. Addressing this challenge requires collaboration and coordination of efforts among payers and providers.

How can care providers and payers work together to activate physician participation in this climate to improve diagnosis coding and documentation, close gaps in care, achieve better clinical and financial performance, and support VBC initiatives? Some answers were offered in a “Bright Spots in Healthcare” podcast.

Moderated by host Eric Glazer, the podcast offered the perspectives of a diverse, blue-ribbon panel of experts:

  • Jeslie Jacob, divisional vice president, provider analytics, reporting and connectivity, Blue Cross and Blue Shield of Illinois
  • Janie Reddy, DNP, FNP-BC, director of family medicine, CommuniCare Health Centers
  • Rebecca Welling, associate vice president, risk adjustment and coding, SelectHealth
  • Lisa Wigfield, RN, BSN, CCM, CRC, CDEO, clinical advisor, risk management, Priority Health
  • Hassan Rifaat, MD, CEO of Vatica Health

Watch the whole podcast to get the full story, but in the meantime, here are some key pieces of advice from the panel:

“The key is to bring the gaps in patient care into the workflow at the point of care.”

Successful VBC is built on data and analytics, but as Jeslie Jacob stressed, gaps in care must be visible at the clinician’s fingertips when interacting with the patient. Jacob emphasized the value of EMR integration and dashboards to ensure that clinicians have ready access to up-to-the-minute insights when they meet with patients.

“Capture as much as you can during the visit.”

Janie Reddy emphasized maximizing the opportunities presented by the office visit. “If a patient comes in for an acute visit – say, for a cough – we treat the cough, but we’re also looking to see if they’ve had their preventive screenings,” she said. “If they’re diabetic, have they had their A1Cs done for the year? We’re looking at the whole picture: all their quality metrics. It’s all embedded in data analytics and presented via dashboards that show us exactly what is outstanding for each patient.”

“It’s got to be documented to capture it.”

Data goes both ways, according to Lisa Wigfield. You’re not just using historical health data to inform the office visit; you’re also generating new, vital data during the visit. For that reason, she cited the importance of documenting everything, thoroughly and accurately. Wigfield mentioned how Priority has enhanced MA benefits and offers a “free to talk” visit that has no copay. The visit provides an opportunity for PCP and patient to talk about health. It’s a good way to address care gaps and discover new issues the PCP may not be aware of.

“Go from a physician-only approach to a team approach.”

Reddy is a firm believer in sharing the VBC workload among physicians and other staff so that the burden doesn’t fall disproportionately on physicians. There are several advantages to this. For one thing, it enables physicians to accomplish more during the time they have with patients. Secondly, it builds a sense of VBC ownership across the entire team. When everyone feels that they are being supported by their colleagues in making VBC work, the effort will be more sustainable. However, keep in mind that a successful team approach requires that each team member has a clear understanding of their role and responsibilities and the practice’s expectations of them.

“Make sure health plan incentive dollars flow down to the practice.”

Incentive dollars aren’t much of an incentive if the people earning them don’t receive them. That’s why Hassan Rifaat, MD, stressed that clinicians should be paid directly for the work they’re doing. He urges practices to “make sure money is flowing down into the practice, from providers to support staff; invest the time to figure out how to do that.” That tangible ROI for the team’s VBC efforts will help ensure their continued commitment. Dr. Rifaat also made a key point about the economics of VBC implementation: “The upfront costs of a VBC program are significant and it can take as long as two years for some of those investments to start generating positive cash flow,” he said. “Once it does, it’s self-funding. But until that happens, some form of subsidy can help providers make the investments needed to get their VBC program off the ground.”

“Be sure to include staff in the incentives.”

When it comes time to share incentives with staff members, PCPs have any number of ways to do it. Which is best? Rebecca Welling believes one effective way is to link specific incentive payments to the successful performance of specific tasks. “For example,” said Rebecca, “you could offer to pay your scheduling staff $25 for every one of these high-acuity patients they bring in.” The direct connection between task and reward can be a strong incentive.

“Take advantage of friendly competition.”

Don’t be reluctant to share provider performance data within your organization to spur friendly competition. Reddy said, “As clinicians, we have a competitive drive within ourselves, and this has really motivated us to push each other to deliver quality care to our patients.” Bottom line? Money isn’t the only incentive; competition can be a powerful tool, as well. To encourage competition, Dr. Reddy said “Dashboards are our friend.” Readily accessible and easy-to-read dashboards make it simple for physicians to compare their work with their peers’.

How Vatica Health can help

The Vatica Health solution directly supports many of the recommendations made by the experts on the podcast. Vatica Health is the leading PCP-centric risk adjustment and quality-of-care solution for health plans and health systems. By pairing expert clinical teams with cutting-edge, Vatica increases patient engagement and wellness, improves coding accuracy and completeness, identifies and closes gaps in care, 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. With the Vatica team providing the extra resources needed to get VBC off the ground and operating successfully, physician participation is easier to enlist and sustain. To learn more, visit https://vaticahealth.com/.

How complete and timely data exchange can improve VBC outcomes

By Vatica Health | December 13, 2022 | Value-Based Care

Doctor typing on a laptop

As an old saying goes, “timing is everything.” In value-based care (VBC), that’s especially true—particularly when it comes to data exchange. Timely data exchange is essential. It provides greater visibility into a patient’s overall health during a face-to-face encounter, enabling providers and payers to deliver the best care with the appropriate resources.  

There’s no question that VBC thrives on accurate and timely data. Data identifies target patient populations. It spots risk factors and care gaps. It can highlight problem areas and drive appropriate interventions. And when leveraged effectively, it improves efficiency, measures progress and ultimately enhances VBC performance.  At the end of the day, having a 360-degree view of current patient information is essential to making sense of a patient’s health and making the best care decisions at every encounter.

Despite the importance of leveraging actionable data at the point of care, there are some formidable stumbling blocks. Relevant clinical data is often siloed – stored in different systems that do not communicate with each other. Payers, providers and pharmacies maintain separate databases that are not reconciled. This can lead to conflicting information, confusion and ultimately, subpar care. 

There has been a lot of progress to enhance integration and interoperability among various EMRs, stakeholders and systems — but we are still in the early innings. A lot of healthcare data is contained in unstructured formats or trapped in an EMR that doesn’t integrate with other databases. A readily available single source of truth with all relevant clinical information to inform a patient encounter and real-time decision making is rare. Therefore, providers and payers unknowingly make decisions based on incomplete and conflicting information. This impacts care and outcomes and leads to the inefficient use of resources.    

While current and timely data exchange is critical, it’s not a panacea. There has been a lot of progress in healthcare technology, such as artificial intelligence and natural language processing, but nothing replaces the judgment and experience of a trained clinician. A lot of important patient information remains trapped in unstructured formats such as images and physicians’ notes, which technology alone doesn’t sufficiently address. In addition, complex algorithms are rendered useless if the underlying clinical data is inaccurate.

The holy grail is to arm specially trained clinicians with powerful tools to curate all relevant patient information at the time of the encounter and leverage technology to supercharge, not replace, physicians. The combination of the right data, the right clinical resources, at the right time would help drive the most efficient and informed patient visits, lower costs, enhance care and drive practice performance in VBC and other risk sharing arrangements.

How Vatica can help

Vatica Health offers a unique model that pairs expert clinical teams with cutting edge technology at the point of care.  This innovative combination produces a powerful biproduct – sensemaking machines that help our clients wade through a sea of data to garner insights and make better clinical decisions. 

 Vatica’s licensed nurses curate all relevant clinical data to inform comprehensive visits. This information is conveniently documented and provided to the PCP prior to the visit. Only vetted HCC codes and care gaps are presented so PCPs can make the most of their time with patients. Health plans purchase the Vatica solution and make it available to PCPs in their network at no cost to help improve coding and documentation for risk adjustment. A key component of VBC, risk adjustment ensures that risk bearing entities are properly compensated and that adequate resources are available to care for patients, based on their specific conditions and healthcare needs.