Simultaneously optimizing care and revenue growth by aligning quality and risk adjustment requires you to perform medical record retrieval (MRR) easily and accurately.
But in order to reduce coding errors, increase claims adjudication rates and improve operational efficiencies you must approach risk adjustment for commercial health exchange (HIX) and Medicare Advantage (MA) plans based on their respective characteristics.
The Centers for Medicare & Medicaid Services (CMS) has been risk adjusting MA Plans since early 2000. It has multiple model versions for doing so, all of which use Hierarchical Condition Categories (HCC) codes. Medical (CMS-HCC) and pharmacy care (RxHCC) are risk adjusted.
In contrast, the Department of Health & Human Services (HHS) has been administering just one risk-adjustment model for HIX plans since the federally facilitated marketplace was implemented through the Affordable Care Act, which was passed in 2013. HCC-model versions have been published for 2013-2015 and a draft has been prepared for 2016. Pharmacy costs are not factored in at this time.
Knowing the following similarities and differences between commercial health exchange and Medicare Advantage risk adjustment (RA) could help you improve your processes for each.
MA plans operate under a retrospective RA model, in which they receive reimbursement the year after the one in which the member’s diagnosis is reported and care is provided. HIX plans are subject to a concurrent risk adjustment model, which means that they use a member’s diagnosis in the year they are reported to reconcile their payments with competing health plans in their market. Both the RA model and Concurrent RA model calculate risk scores based on a combination of demographic and diagnostic factors, for which HCC codes are required. A member’s risk profile is determined on a calendar-year basis in both models and diagnoses do not automatically carry forward to future years.
MA risk-adjustment payments are made in the reimbursement year following the calendar year in which the encounter (care) occurred. Data is submitted to CMS based on sweeps in September of the encounter year and March of the reimbursement year. Preliminary payments begin in January of the reimbursement year and are followed by interim payments from July through December. Final settlement of retro payments may be made the following year. However, HIX data are submitted and reimbursements are received throughout the encounter year. Risk adjustment validation (RADV) audits and settlements are done in the following year.
MA plans take the form of a health-maintenance organization (HMO), preferred-provider organization (PPO) or special needs plan (SNP). They cover members who are 65 years of age or older, as well as people younger than that who are disabled. Special statuses apply for hospice, End-Stage Renal Disease (ESRD), working aged and Medicaid.
HIX plans come in Platinum, Gold, Silver, Bronze or Catastrophic, each of which has differing coverage. They are broken into coverage for Adult, Child and Infant. Special statuses are broken down by severity levels and maturity levels.
Medicare Advantage risk adjustment models currently in use include ESRD (e21), Program of All-inclusive Care for the Elderly (PACE) (p22), HCC (v21) and RXHCC (r05). HCC model version 21 has both a Community and an Institutional classification. For HIX plans, each of the three published HCC models has risk factors at the Metal Level.
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.
Your MA plan may not be subject to a risk adjustment data validation (RADV) audit in a particular year, but your HIX plan must complete one annually. CMS chooses one-third of MA plans for RADV audits each year. Each audit includes data from 201 members selected from three strata. Findings are to be extrapolated against entire MA Plan by strata. By comparison, each HIX plan must “self” audit through an initial validation audit (IVA) every year. 200 members are selected from ten (10) strata. The findings drive annual settlement between HIX plans within the marketplace.
Efficient processes for commercial health exchange (HIX) and Medicare Advantage risk adjustment will help you improve care while increasing revenue, and better coding and reporting starts with knowing the characteristics for each.