Health care providers are bearing more financial risk than ever before as more commercial and government payer arrangements progress. With more Accountable Care Organizations (ACOs) moving into downside risk in 2019 and many more medical groups focusing on Medicare Advantage, CPC plus, and customized commercial capitation deals, the risk adjustment of their population matters significantly. For providers and medical coding personnel, proper documentation and specificity of a patient's illness and burden of disease is now paramount.
The American Journal of Managed Care published the results from a three-year study (Aloke K. Mandal, Gene K. Tagomori, Randell V. Felix, & and Scott C. Howell, 2017) that mapped the differences in contracting arrangements between Medicare Advantage Organizations (MAOs) and two provider groups serving MA enrollees. Results from the study, conducted from 2009 to 2012, revealed that value-based contracting drove utilization patterns and improved clinical outcomes among the chronically ill and elderly MA member patients. It also generates cost efficiencies.
“As our healthcare system continues to shift from volume to value, the accurate reporting of the severity of patients' illnesses is critical,” says Scott Disch, MPH, President of SolveMed Consulting, LLC. “Hierarchical Condition Category (HCC) is already in use and as a result, diagnosis coding for provider services has taken on increased importance.”
Disch has worked in health care for 20 years in hospital administration and in physician services. He has experience in revenue cycle management, managed care and value-based risk contracting. He says that value opportunities should be tackled in manageable chunks and recommends focusing on specific conditions.
He says it is important for physician practices to understand the concepts related to risk-adjusted coding. Those that neglect to report status codes will suffer a negative consequence in risk-adjusted coding, he said, adding that coders and providers can learn how to utilize diagnostic codes for chronic conditions to the highest specificity and co-morbid relationships.
Disch will help provider offices set RAF goals this Thursday, June 14 in a one-hour lunch-and-learn webinar hosted by Practice Management Institute. He will share documentation tips and strategies for helping to improve risk adjustment factor (RAF) capture such as in-office chart reviews, concurrent coding, reporting or analytical tools on claims, inferred clinical coding recommendations, and reminder tools. Coders will learn how to support providers with RAF.
Disch says that value is the equivalent of quality/experience plus (risk adjusted) costs.
“You can build teams to address pre-visit planning and coordination with providers,” Disch says. “It is important to follow ICD-10 rules and understand whether to use all current and past conditions when coding an encounter, as well as what types of unspecified codes don’t carry a risk-adjusted factor,” he says.
“Basically, if an average Medicare patient consumes $700 of medical services each month, then a patient who is sicker would consume $770. We need to get credit for this sicker patient in our cost target.”
- Value-Based Contracting Innovated Medicare Advantage Healthcare Delivery and Improved Survival, Aloke K. Mandal, MD, PhD; Gene K. Tagomori, BSc; Randell V. Felix, BSc; and Scott C. Howell, DO, MPH&TM, Am J Manag Care, January 10, 2017; 23(2):e41-e49