Playing by the rules is hard if the rules keep changing.
Preserving revenue integrity is already challenging with risk adjustment so prevalent in the healthcare sector. But changes in the risk adjustment methodology by the Centers for Medicare & Medicaid Services (CMS) make it even harder.
Perpetually vigilant in its efforts to prevent overpayments while properly compensating plans for providing care for higher-risk patients, CMS periodically changes its hierarchical condition category (HCC) risk adjustment methodology.
Managing risk in terms of your members’ profiles and your plan’s exposure to an adverse CMS finding requires you to stay ahead of changes. Whether it applies to a commercial health exchange (HIX) plan or a Medicare Advantage (MA) plan, you should follow a change in risk adjustment methodology, beginning with its first mention by CMS, through the public comments period, and to its final implementation.
Preparing your plan’s response to a proposed change before it is implemented by CMS will allow you to respond more quickly when it does take effect. This will help you ensure that you can always submit complete, accurate, and timely data.
Here are three tips to stay up to date with the CMS HCC risk adjustment methodology:
1. Review compliance with current models by being familiar with the effective guidance from both CMS & HHS
Evaluate your medical record and claims verification processes for HIX versus MA risk adjustment. You should be efficiently retrieving and coding in each.
CMS has two risk adjustment models for MA plans: Medical (CMS-HCC) and Pharmacy (RxHCC). HIX plans have only one risk adjustment model: Medical (HHS-HCC). Pharmacy costs are not factored.
For MA plans, there are 87 Condition Categories (CC) in Version 21 and 90 CCs in Version 22. Medicare Part D pharmacy plans work with 76 CCs in Version 05. Also, there are 16 CC interactions and 11 disabled interactions.
In contrast, there are 127 CCs in Draft Version 2016 for HIX plans. Interactions are based upon a Severity Level Scale of 1 to 5, and interactions for infants are compounded by maturity level.
For MA plans, review the CMS-HCC Risk Adjustment Model for CY 2016. CMS now uses risk scores calculated from the community, institutional, new-enrollee, and Chronic Care Special Needs Plans (C-SNP) new-enrollee segments of the clinically revised CMS-HCC model in Part C payment for aged/disabled beneficiaries, according to Section G of the Advance Notice of Methodological Changes for CY 2016.
If you have a HIX plan, review the CMS risk adjustment methodology for commercial health plans. Each of the three published HCC models for HIX plans has risk factors at the Metal Level. Consider implementing concurrent risk adjustment reviews if you haven’t done so already, because continuously reviewing medical records as encounter data become available will help you ensure that you submit the information required by regulators in accordance with current methodology.
2. Research proposed changes
CMS typically tweaks its risk adjustment processes annually with related changes grouped around themes. Major changes tend to come along every three to four years. Review proposed changes as they are released, along with any resulting comments from the industry.
CMS is finalizing a new risk adjustment model for MA plans for 2017 in response to “significant stakeholder concerns that the current Risk Adjustment Model does not effectively capture the full cost to Medicare Advantage plans of serving dually eligible beneficiaries.” Potential revisions were included in a request for comment in October 2015.
Also, review the comments on proposed changes to the CMS-HCC Risk Adjustment Model for Payment Year 2017 that CMS received to prepare for possible changes. Look for interpretations of proposed changes from organizations like Gorman Health Group and The Kaiser Family Foundation as well.
CMS is also considering changes to its risk adjustment program for HIX plans based on public comments, an agency white paper, and an independent analysis of the results of the 2014 risk adjustment program.
CMS asserts that the risk adjustment program works as intended, according to a Health Affairs Blog post about the Affordable Care Act risk adjustment methodology. But CMS is exploring “potential modifications to the risk adjustment methodology for the 2018 benefit year and beyond,” according to the agency’s March 2016 white paper.
“We have recently received feedback from the public suggesting, among other things, that our risk adjustment model does not capture the risk associated with partial year enrollment, that it under-compensates new or fast-growing plans, that it is based on outdated data, and that it would be improved by including prescription drug utilization data as a predictor,” the white paper states.
CMS has sought comment on the following topics as a result:
- Partial-year enrollment
- Prescription drug utilization as a predictor
- Pooling of high-cost enrollees
- An evaluation of concurrent and prospective risk adjustment models
- Data for 2018 recalibration
- Data for 2019 recalibration
CMS plans to incorporate comments into future rulemaking and continued evaluation of the methodology.
3. Prepare to implement final changes
Confirm that your internal team and any external vendors are prepared for changes. This includes ensuring that they are aware of any revisions to risk adjustment models, ICD Diagnosis Codes, HCC codes and crosswalks, and audit procedures.
All medical chart coders should be trained and certified in accordance with their positions, whether they be part of your internal team or externally sourced. Industry associations may be able to provide professional education tailored specifically for each team member’s role.
Establish high-performance requirements for all team members and construct data-driven performance management processes. Require a 98 percent accuracy rate in abstraction, for example.
Create metrics for such essentials as thoroughness, specificity, and consistency. Delegate responsibility for the execution of your performance management strategy when possible, but hold those whom you delegate to accountable.
The sooner you collect records, the longer you have to assess them for completeness and to review the accuracy of their abstraction in accordance with new regulations. Explore whether in-house or vendor medical record collection will better provide the accuracy you need. Both have pros and cons in terms of flexibility, costs, access, expertise, and technology.
Assemble a team for conducting targeted audits of your risk adjustment data based on changes by CMS and contract in advance for support from your existing chart review or chart collection vendor. Charge the team and your vendor with spotting holes in both process and data. You should then fix the holes, audit again, and repeat the process in order to improve accuracy.
Submitting complete, accurate, and timely data will help you preserve revenue integrity by avoiding reporting penalties and substantiating your members’ risk scores. Following these three tips for staying up to date with the CMS HCC risk adjustment methodology could be a good start.
