Scott Maratea

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	It’s a brave new world of risk management out there, and commercial payers-traditionally the masters of risk-have an ever changing game to learn and master if they are going to continue to be successful in the post-Affordable Care Act world. 

One of the keys to success for commercial payers in the era of guaranteed issue is effective reporting.  Medicare Advantage (MA) and Affordable Care Act (ACA) health information exchange   commercial plans offer payers several mechanisms designed to compensate them for unexpectedly high-risk profiles or claim costs if they can effectively gather and report on their risk profiles as reflected in clinical and claims data.

	On average, up to 15% of payer “earned” Centers for Medicare and Medicaid Services (CMS) reimbursements are lost each year because payers are unable to accurately capture and report on all of the data required.  

	For instance, consider that as much as 30% of all medical records contain unsubstantiated diagnoses.  Only through fully capturing all conditions in a thorough end-to-end review, can payers realize accurate revenue over a claims-only view of a patient’s health profile.

	To take full advantage of these programs and put more risk-based reimbursement dollars in the bank, payers need to master a new level of gathering and reporting on not just claims data, but clinical data as well, in an integrated, comprehensive and accurate fashion.

	Many commercial payers now have lines of business that include both MA and commercial exchange plans, and both of these offer the potential to earn revenue from risk adjustment reimbursements. 

	Payers offering MA lines of business can also benefit financially from their Star Ratings by achieving a score of four or more stars, which can be facilitated and enhanced by effectively reporting on certain quality and performance measures. Between MA and marketplace plans, there are three main types of programs in play:

. MA has had a coding intensity-based risk adjustment plan in place for commercial payers since 2007, and the ACA establishes a system to transfer funds from plans with low-risk populations to those with higher-risk enrollees, based on an average of individual risk scores.

. The ACA sets a limit on the maximum costs per enrollee, and reimburses plans for individual member costs that exceed that amount.

. The ACA also establishes a target range for total losses for qualified plans, collects funds from plans whose total claims are under that amount, and then uses those dollars to reimburse plans whose losses exceed the target range.

	These programs all rely on payer-reported data, including both clinical and claims data, to calculate risk scores and reimbursement amounts.  Historically, payers have faced significant challenges aggregating and reporting data, especially from older core claims systems (many of which have come into the payer through mergers and acquisitions), and from clinical systems at hospitals, practices, labs, pharmacies and other third parties. 

	Today, the financial opportunity is too great for commercial payers to leave any more money on the table due to poor data gathering and reporting.

	CMS makes its risk calculations based on data reported by payer organizations, and each payer’s ability to report accurately and comprehensively determines their ability to get maximum reimbursement under these programs.

	While many commercial payers have some experience with risk scoring under MA, the ACA has introduced some new wrinkles that significantly increase the complexity for payers.  For example, risk scores for the ACA small group/individual market (known as HHS-HCC) are calculated differently than for the Medicare market (known as CMS-HCC).

	A further differentiation is that while approximately 60% of MA members have risk factors that drive higher scores and reimbursements, only about 20% of the small group/individuals do, the most significant risk factors (claim/condition types) in the MA market are not necessarily the same as in the small group/ individual market, according to CMS.

	Based upon general feedback received from payers around the country, the race is on to get tighter clinical data integration to support and improve upon risk adjustment efforts, as well as other endeavors such as value-based plan initiatives.

	The integration of clinical data into a payer’s infrastructure effectively provides a much more accurate and comprehensive view of the patient/member to identify diagnosis, gaps in care, intervention opportunities, and other levers which can serve to improve the cost and quality of care.  

	In the near future, payers will need to ingest not only clinical/claims information but also patient data from mHealth and wearables, genomic data for personalized medicine efforts, and other data types that neither payers nor providers may be thinking about today. 

Next: Common payer mistakes that under report risk 

Common payer mistakes that under report risk 

	Working with payer organizations to ensure maximum reimbursement under CMS risk remediation programs, there are a few typical misperceptions about the nature and requirements of these programs over and over again.

	A few of the points that must be stressed with commercial payers include:

All of the needed detail to support a targeted HCC for a member is not found solely on a claim or solely in a medical chart/record.

 Only through utilizing and integrating both data sources can a payer be certain that they have identified all of the detail needed for its targeted members.

Risk adjustment can add up to very significant dollars. 

 CMS reimbursements to payers comprise a very large percentage of their revenues for these lines of business.  If managed correctly and efficiently, a payer can utilize a portion of CMS dollars as a profit center to enhance, support or drive other areas of their enterprise. 

By the same token, ineffective reporting that fails to maximize reimbursement can wind up forcing payers to divert operating revenue from other areas.

 To a large extent, a payer can control, or at least influence, that it is receiving the maximum amount it is due each year from CMS.

	For most payer organizations, the core challenge underlying effective risk reporting is data acquisition and aggregation.  Payers need to be able to effectively integrate a set of core clinical and claims data together, including diagnosis codes, dates of service, prescriptions, labs, provider type, physicians’ notes, etc.  This information is often spread across multiple organizations such as payers, physicians, hospitals, and other types of providers such as nursing homes.  It can reside in and be formatted for a wide range of core claims, electronic health records, billing, registration and other systems. 

	Accurately aggregating those disparate data types is another difficult and novel challenge for most payer organizations, further compounded by the fact that the blended information is needed on a near-real time basis so the payer can ensure they are monitoring member conditions proactively and continuously maximizing the “revenue” due to them from CMS. 

	Assembling the technologies and best practices to accurately collect and correlate clinical and claims data are among the most critical success factors for payers that do not want to leave CMS risk adjustment money on the table.  The good news is that mastering this challenge will set the organization up for success in a number of areas that are increasingly important to their future as an organization. 

	Even today, this aggregated data can be very useful for Stars improvement and HEDIS reporting.  Going forward, accurate and comprehensive data will be the critical foundation for more and more sophisticated population health and value-driven care initiatives. 

, regional vice president for Orion Health, has devoted the last 23 years to successfully establishing and growing client relationships with the country’s leading healthcare payer and employer organizations. 

Articles

To put more risk-based dollars in the bank, payers need to master a new level of gathering and reporting on not just claims data, but clinical data as well.

Author | Scott Maratea

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Commercial payers: Don't leave money on the table