Accurate, Specific and Comprehensive Documentation Moves the Needle in Value-based Care


Proper documentation and coding provide better patient care and help plans optimize revenue.

Mike Brett, M.D.

Mike Brett, M.D.

Imagine that Ms. Smith, a patient at a value-based care program, has major depression, and the clinician documents this with, “Ms. Smith has major depression.”

Seems straightforward, right?

While this documentation may seem accurate, it is simply not specific enough for today’s reporting environment. Depending on Ms. Smith’s case, more specific documentation might be, “Ms. Smith has major depressive disorder, single episode, moderate severity” or “Ms. Smith has major depressive disorder, recurrent, in partial remission.”

Detailed documentation provides a more complete picture which supports patient care and may also result in a higher CMS risk score for the patient. This is especially meaningful when you consider the number of patients in your program. If documentation throughout a program is not specific, it could take a significant toll on revenue for the value-based care plan.

CMS uses certain diagnosis codes to help assign a risk score to each patient in a value-based care plan. The risk score is a relative number, reflecting how much the patient’s care is expected to cost the next year compared to the average Medicare enrollee. Patient risk scores help CMS determine the monthly capitated payment for the plan, which is evaluated yearly. Simply put, proper and specific documentation and coding of diagnoses are vital to driving accurate payment in value-based care.

Properly documenting diagnoses may further impact a plan’s revenue by protecting the plan and ensuring it remains compliant with CMS. Erroneous coding puts plans at risk of violating the False Claims Act, which could result in fines, so documentation and diagnosis codes need to be accurate. For example, if the clinician refers to a patient, who had a stroke two years ago, by writing, “Right CVA with left hemiparesis,” this conveys to CMS that the patient is currently having a stroke. This documentation would create a higher risk score for the patient, but it is incorrect, and even when inadvertent, is out of compliance. As the hypothetical examples demonstrate, understanding the complexities of Medicare risk adjustment is crucial in value-based care and learning to do it properly will help plans deliver accurate, specific and comprehensive documentation to optimize revenue.

In addition to properly documenting and coding diagnoses initially, it may also help value-based care plans to partner with an external auditor expert in Medicare risk adjustment to review charts and scrub codes that may be incorrect or poorly supported. These chart audits also provide an opportunity to identify anything that may have been previously overlooked.

Although proper documentation and coding are an integral part of excellent healthcare, the appropriate way to code diagnoses under CMS guidelines is not typically taught in medical school, and, with updates to diagnosis codes being made annually, could be hard to keep up with. This makes training essential. Like chart audits, training is an important component of risk adjustment. For training to be most effective, the risk adjustment training team should include physicians, who “speak the same language” as the clinicians and in many cases have experienced many of the same situations.

Importantly, the benefit of proper documentation extends to patient care as well. When providers are effectively trained, proper documentation becomes second nature. This means charts are more accurate and clinicians can focus on their patients. In addition, with more money to put back into their programs, plans can better serve their participants. This is especially important for plans that care for patients with more complex needs, such as those with multiple chronic conditions. If a plan is not appropriately reimbursed for these patients, it could put a strain on the entire program.

Having a thorough understanding of Medicare risk adjustment, proper documentation principles and the annual ICD-10 Coding Guidelines results in more precise documentation, which leads to more accurate reimbursement permitting value-based programs to continue providing excellent care for participants.

Mike Brett, M.D., is senior vice president of consulting services and chief medical officer for Capstone Risk Adjustment Services under CareVention HealthCare, a division of Tabula Rasa HealthCare.

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