Three ways payers and providers can improve risk adjustment | Viewpoint

Ideally, risk adjustment begins with quality care.

Chris Rigsby

Patients participate in routine wellness visits and easily access the healthcare services they need. Providers have lots of time and energy for every patient. Clinical documentation is consistently captured at all points, offering a complete and accurate picture of a patient’s health.

Unfortunately, the ideal often is far from reality. Providers are overwhelmed with heavy patient loads, the administrative burdens required for risk adjustment, and ever-growing amounts of documentation required for value-based care. For these reasons, payers are not receiving the information they need to assign patients accurate risk scores for proper reimbursement.

Payers cannot do risk adjustment well on their own. To improve risk score accuracy and, ultimately, competitive advantage in the market, health plans need to partner with providers.

Payer-provider collaboration isn’t new, particularly under value-based care models which tie revenue to risk scores and patient outcomes. But the disconnected agendas of the past are still defining interactions; decades of operating within a system that pitted the financial interests of providers against those of payers have left a legacy of distrust. In light of this, when it comes to risk adjustment, payers have a strong financial incentive to extend an olive branch.

By helping providers, plans can optimize the functions that support risk adjustment while also building trust and fostering collaboration that support holistic care.

Here are three strategies for accomplishing this.

Implement prospective risk adjustment programs

By its nature, prospective risk adjustment is proactive and collaborative. The model is simple: Payers identify diagnosis gaps based on known and suspected chronic conditions. They inform providers who assess the gaps, prioritize them according to severity, and address them during patient encounters. Clinical coders document those conditions in claims, which factor into member risk scores.

Of course, that’s a simple description of a complex process, one that can go awry at numerous points. Designing and implementing these programs so that they integrate easily into providers’ preferred workflows can be a challenge, but it’s worth the effort.

Though it might seem counterintuitive, payers are often better able than providers to capture more comprehensive clinical data about patients. Payers can help providers by supplying them with this information so they can identify potential issues earlier, support informed treatment decisions, and produce better patient outcomes.

This also leads to more accurate coding. When the Centers for Medicare & Medicaid Services updates its requirements for risk adjustment programs, payers can prioritize cooperative, prospective strategies to stay ahead of any changes and ensure compliance.

Standardize risk adjustment programs across payers

Providers, already struggling with the complexities of value-based care, face additional problems caused by the lack of alignment and standardization across payer risk adjustment and quality gap closure programs.

Expectations that vary from payer to payer lead to inconsistent responses from providers or their outright reluctance to participate. Payers can increase provider engagement and reduce discrepancies by establishing clear, standardized risk adjustment protocols within their organizations and across all plans in a given market.

Standardization could lead to substantial documentation and coding improvement, ensuring all providers follow the same procedures and adhere to the same criteria for documenting and coding health conditions, regardless of patients’ insurance carriers. This uniformity is crucial for generating reliable outcomes in risk adjustment, streamlining data collection and analysis, and making it easier to predict costs and allocate resources effectively.

Standardization also fosters trust and cooperation between payers and providers. When providers are comfortable following clear and consistent guidelines, they are more likely to participate through correct and comprehensive documentation. The result is a more successful, long-term collaboration that aligns goals, improves patient outcomes, and streamlines healthcare cost management.

Educate providers on HCC coding

Payers are familiar with the relationship between clinical documentation, hierarchical condition category (HCC) coding and reimbursement, but many providers are not.

HCC coding provides a complete picture of the plan member’s health and is also critical in ensuring that they are effectively managed through a plan’s care management program. However, providers sometimes fall short in coding, due to error or insufficient resources.

HCC coding is used to estimate future costs for the care of Medicare Advantage, commercial ACA, and managed Medicaid populations. This structure, combined with the Medical Loss Ratio (MLR) rule, ensures that improved premium payments resulting from HCC coding are reinvested into better benefits offerings for patients.

In 2021, AAPC performed risk adjustment audits with large provider health organizations. They found that 20 percent of claims were not coded accurately, with 12 percent of incorrectly coded ICD-10-CM diagnosis codes due to insufficient documentation to support the reported diagnoses and 8 percent of the diagnoses were supported but not captured in the medical record, identifying these as the missed opportunities.

Many providers miss the correlation between HCC coding, available benefits, and improved patient outcomes. For this reason, they might be reluctant to participate in payer risk adjustment programs.

Payers can encourage them to join through educational programs that show them opportunities for documentation improvement and how those improvements result in enhanced member care and benefits offerings. Once providers understand the connection, they are more likely to work with payers to improve documentation and support HCC coding accuracy.

Building the future of optimized risk adjustment

When payers support providers, risk adjustment comes easy.

The strategies outlined here are just the start. By addressing provider pain points, building trust, and ensuring alignment, payers can improve risk score accuracy and financial performance while also enhancing their competitive advantage in the market. This creates a future in which payers and providers both thrive.

Collaborative approaches to risk adjustment will never be perfect, but adopting strategies that empower providers can move the relationship closer to the ideal.

Chris Rigsby is SVP, Payer Solutions, for Omega Healthcare.