Laura Summy Apr 25, 2022 2:32:09 PM 7 min read

RISK ADJUSTMENT FACTOR CODING

Over the last few years, the Office of Inspector General (OIG) and the Department of Justice (DOJ) have continued to focus on billing and coding compliance reviews, even while the Centers for Medicare and Medicaid Services (CMS) have been busy with the pandemic. In 2019, the OIG recovered $3.6 billion, and in 2020 the OIG and DOJ recovered $4.9 billion on healthcare-related services. Providers can be held liable for knowingly making a false record or filing a false claim regarding any federal health care program under the False Claims Act, so it is imperative that they have the knowledge and processes in place to protect themselves.                                                                                                

What is the Risk Adjustment Factor?

Risk Adjustment Factor (RAF) uses Hierarchical Condition Category (HCC) coding, which is a model designed to estimate future health care costs for patients based on their diagnoses. It focuses mainly on the sickest patients, those with multiple conditions or conditions that are uncontrolled. Higher diagnosis categories represent higher predicted costs, which results in a higher RAF score. Once the score is established, capitated payments for beneficiaries enrolled in the Medicare Advantage plans are adjusted for the coming year. However, a focus on the HCCs without supporting documentation or patient-specific history may draw unwanted attention. Providers need to focus on the current patient conditions and their status, not the HCCs, and those conditions and diagnoses must be supported in the chart record.

Healthcare is continuously adapting, so staying up to date on current news, coding updates, and changing guidelines is critical to compliance. Providers should consider assigning someone on their staff the role of monitoring these updates to ensure nothing gets overlooked.

What is Value-Based Care?

Value-Based Care (VBC), an alternative to fee-for-service reimbursement, is a form of reimbursement that rewards health care providers with incentive payments for the quality of care they give to people with Medicare. VBC and RAF go hand in hand and complement one another, as VBC is focused on the patient’s needs and treatment, and RAF is focused on the conditions and statuses of the sickest patients.

In order to build a value-based care program, the entire practice needs to contribute:

  • The leadership team must help determine the goals, the timeframe, and the process.
  • There must be an ongoing and evolving understanding of which patient conditions will increase or decrease in severity over time. This will help provide the focus of the program, as well as emphasize which patients require additional care.
  • The chart documentation needs to be reviewed to check for conflicting information, for missing or inaccurate information, and to verify the Assessment and Plan are current, valid, and fully supported.

A successful VBC program will have providers who are engaged, who understand the guidelines and the goals, who have the technology and the skills to use it appropriately, and who have a Best Practice Advisory Team to help with interaction and focus.

In a VBC, the provider’s role is to focus on the patient and monitor their needs. This includes reaching out to help make appointments, ordering the appropriate screenings and tests, documenting correctly and thoroughly, submitting the appropriate and acceptable codes on claims, and following up with patients and specialists for results. Providers may also have a staff member who routinely checks with the representatives at Anthem, UHC, and Medicare to discuss patients’ services and claims status. This a lot to balance, which can be a challenge. Other obstacles include having only limited information about a patient’s condition(s), a lack of training in coding and specialty issues, changing patient enrollment and scheduling limitations.

On the flip side, the benefits of effective VBC are impressive, including increased office efficiency and quality, patient-centered and team-based care, promotion of full-circle care and care contacts with specialists and facilities, behavioral health services integration, and improved patient outcomes through care coordination and management.

Interested in Learning More?

MMG is planning an extended presentation on both RAF and VBC for those who wish to learn more or implement these models in the future. This information, plus a discussion on RAF Coding audits, will be available in July 2022.

Laura Summy is the Coding Division Manager at Medic Management Group. In this role, she serves as the expert and go-to person for all coding processes, while also directing and coordinating the overall functions of the coding department.