Medicare plans need to be on top of their entire risk adjustment game in 2017 and beyond, starting with understanding CMS rule change impacts, identifying and documenting all members with potentially underreported conditions, and submitting accurate data to CMS.
There are two main areas of risk adjustment where plans could potentially fall down:
1. Identifying and documenting the accurate illness burden of as many members as possible.
Plans may not be getting fully or accurately reimbursed relative to the risk of their populations. When running analytics on a client’s population to look for the possibility of undiagnosed or underdiagnosed conditions, results show 50% to 60% more revenue per chart than those identified by clients themselves. In addition, CMS has segmented its eligibility status into six specific categories to account for the historical challenge of appropriately reporting the risk of plans’ dual-eligible populations with appropriate predictive ratios. This means plans with a higher concentration of partial-duals and non-duals should realize a payment reduction—it has been estimated about a 0.6% risk score decrease, on average, for Medicare Advantage plans. Finding more members with underreported conditions could offset this predicted decrease or even turn it around.
2. Closely monitoring encounter data submissions in relation to RAPS data submissions.
For 2017, CMS is changing the weighting to 75% Risk Adjustment Processing System (RAPS) data and 25 percent Encounter Data Processing System (EDS) data, with a full phase in to 100% EDS data occurring in Payment Year (PY) 2020. Based on experience with health plan clients, I expect that the move to a 25% weight on EDS submissions will have a negative impact on risk scores, ranging widely from -0.3% to -1.5%. During the transition to 100% EDS risk score calculations, plans must manage two data streams. With encounter data impacting risk scores since 2016, plans must better monitor their encounter submissions for completeness to avoid a negative effect on their revenue. Research has shown that plans that are more engaged in the monitoring of their encounter data are missing less of their claims in the encounter data system. These plans will see less of an impact to their risk scores in PY 2017.
Ten tips to manage the risk adjustment process
Successfully addressing these two focus areas for Medicare risk adjustment can be daunting. Here are 10 tips to better manage the risk adjustment process from A to Z:
1. Know what to expect from the latest rules.
CMS provides advance notice to inform plans on what they should do to prepare for an upcoming risk adjustment program. Understanding the latest program updates in advance and developing a strategy in response position a plan more favorably when it comes to obtaining appropriate funding.
2. Stay involved and communicate with CMS.
Before implementing new policies, CMS often sends out proposals with a request for public comment. CMS has historically shown that it pays close attention to these comments. Responding to these requests helps keep CMS aware of how its policies affect your plan. Often the highlights of the public comments are released, which is a great way to learn about how other plans are reacting to proposed CMS changes.
3. Conduct outreach early.
Encourage members to visit their primary care providers. Educate providers on Medicare risk adjustment, as well as the recommendations for prospective health assessments. This will allow you to view members’ health in detail early in the year, including their Hierarchical Condition Category (HCC) and non-HCC conditions, HEDIS measures, and particular care gaps to help you identify members who should be enrolled in disease management programs.
4. Get to know your population.
The key to a successful risk adjustment program is fully understanding your population:
· How sick are they?
· What conditions will you need to anticipate and care for?
· Which patients have the highest risk?
By using suspect analytics, organizations can better identify, prioritize, and reach members with the highest probability of having undocumented conditions. An informed, prioritized list of patients will help drive your strategy to retrospectively find and document conditions for consideration in your risk-adjusted payment formula, as well as undertake prospective health assessment outreach.