What is risk adjustment?
Risk adjustment is a payment methodology CMS developed to make payments for health care based on the complexity of a patient’s illnesses as determined through coding and documentation. Data from claims is used to create a risk score for a patient, and this risk score “adjusts” payments Medicare makes to health plans based on the anticipated costs of providing care to the patient for the upcoming year.
Risk adjustment is impacted by specific ICD-10-CM diagnosis codes that map to hierarchical condition categories (HCCs) and supporting documentation for these codes in the patient’s medical record. ICD-10-CM Official Guidelines for Coding and Reporting as set forth by CMS, the Department of Health and Hospitals, and the American Medical Association are the framework for coding and documentation practices that support risk adjustment, including the guiding principles for ensuring that codes are supported by appropriate documentation. If you are not following these guidelines, you are at risk for producing coding irregularities, which increases your risk for adverse audit findings.
What is an HCC?
An HCC is a specific disease category under which a set of codes for certain diseases and conditions are grouped. Each HCC is given a “weight,” or numerical value. HCCs are weighted based on the severity of the disease or condition. A higher weight indicates a more critical disease or condition that requires more care and resources.
What is a risk score?
A risk score is the sum of two components: The first is the HCC weights for a patient’s diseases and conditions, and the second is the value for the patient’s demographic information (i.e., age, sex, location, Medicaid status and any previously diagnosed disabled status). The higher the risk score, the more care the patient requires. A risk score is compiled from Medicare data submitted from private fee-for-service and Medicare Advantage plans. It remains with the patient even if the patient changes the way he or she gets Medicare (e.g., changing Medicare Advantage plans).
A patient’s risk score is prospective. The patient’s current-year diagnosis codes are used to compute the patient’s risk score for the upcoming year, as well as the risk-adjusted payments for the patient’s care for the upcoming year.
What is the average risk score?
Nationally, an average Medicare beneficiary has a risk score with a value of 1.0. If the risk score is less than 1.0, the patient is healthier than average, according to Medicare. If the risk score is greater than 1.0, Medicare believes the patient is less healthy than the average beneficiary.
How will I know my patient’s risk score?
You can view each patient’s risk score in Member Viewer—just click the orange Member Viewer Profile Summary button in the patient’s record to generate a health report that lists the patient’s current risk score at the top. This report also flags any patient conditions documented and coded in the past but that have not been reported to CMS via codes in claims submissions or chart reviews in the most recent reporting period. These conditions are marked as requiring review in the Disease Management and Clinical Indicators sections of the summary report. Because risk scores are recalculated each year, if these conditions are not redocumented and coded, they will not factor into the patient’s most recent risk score. This means the risk score will not accurately reflect the level of care required, which impacts reimbursement for the patient’s care during the upcoming year. For any patient with conditions flagged, you should consider scheduling an appointment to manage, evaluate, assess or treat the conditions, and submit corresponding codes if, based on your evaluation, the patient continues to have any of the conditions.
If you do not have access to Member Viewer, via the Provider Portal, visit www.peopleshealth.com/providerportal to register an account.
Which conditions have an HCC?
Not every disease and condition is assigned to an HCC. Only certain diseases and conditions are part of the risk adjustment model. Thus, some patients will have zero HCCs. Many diseases and conditions that are assigned an HCC are identified on the Diseases and Conditions Associated with HCCs reference card. If you do not have this reference, access it on Provider Portal, under the Resources tab or ask your Peoples Health representative.
Why should I participate in risk adjustment?
When your documentation and coding support risk adjustment, they also support improved patient outcomes. By creating more complete and detailed medical records that document diagnoses specifically and that clearly communicate a patient’s current status, progress and history of illness, you facilitate improved continuity of care for the patient across providers. Additionally, more accurate risk scores help ensure that we can provide our plan members with the resources they need—such as durable medical equipment and diagnostic tests—to manage their care.