Risk Adjustment
The Best of Both Worlds: Balancing Retrospective & Prospective Strategies
Written By
Erik Simonsen
Chief Operating Officer

The healthcare industry is quickly moving towards value-based care (VBC)—a model expected to grow at a CAGR of 20.3%, reaching a market value of 7.28 billion, by 2027. While less than 20% of Medicare spending was value based prior to the pandemic, years of rising healthcare costs have prompted CMS to push 100% of Medicare providers to take on downside risk by 2025.

With $1 trillion in risk shifting from payers to providers over the next few years, many in the industry are moving from a retrospective to prospective approach to risk adjustment. This is especially true for ACO and DCE providers who are often unable to support retrospective programs due to timing or claims editing constraints. For these organizations, the shift of traditional Medicare to VBC agreements must absolutely be accompanied by a shift to prospective solutions.

For the rest of the industry, however, it’s not about picking one strategy over the other. It’s about finding the right balance between the two, using a holistic, patient-centric approach. According to a 2020 Xtelligent Healthcare Media survey, 56% of Medicare Advantage plans reported using both strategies, but more will need to pursue this dual model to successfully navigate the transition to value-based care.

 

Find the ‘Right’ Balance

 

While retrospective and prospective strategies represent different sides of the same coin, the goal for both should be understanding the health of your patient population and predicting how that will evolve. Prospective strategies should be your first line of defense, ensuring full and complete documentation of a patient’s risk at the point of care. Retrospective strategies should be your last line of defense, verifying provider coding accuracy and compliance and capturing any care gaps or unsubstantiated codes. By using both approaches, you will have a much higher chance of accurately documenting risk across your patient population. But how do you find the ‘right’ balance? The answer is not one size fits all.

For payers, it can be challenging to implement opportunities at the point of care, as provider adherence to prospective programs is often quite low. While these organizations may be able to use annual wellness visits along with patient assessment forms and provider documentation and education programs to drive improvement, they will need to rely much more heavily on retrospective programs such as medical record retrieval and chart coding to see measurable results.

For some ACOs, DCEs, and Medicaid managed care organizations in certain states, however, retrospective programs can be difficult or impossible to implement. Therefore, they will need to rely more heavily on prospective approaches like point-of-care tools and concurrent coding programs, which serve as an alternative audit process to correct documentation and coding errors immediately following a provider visit and before a claim is submitted for payment. Risk-bearing provider groups will also benefit from a prospective-first strategy, as these organizations are more easily able to implement prospective programs at the point of care, using tools integrated with EMR systems to help drive risk capture. Then, later in the year, they should use retrospective programs as a last line of defense.

 

Get a Technology Upgrade

 

Using dual strategies does not come without complications, however. Plans and providers need a comprehensive view of their patient populations, but the quality of this view depends on how efficiently they can capture HCC codes. And the output of this phase affects how well they can categorize member cohorts and high and low-risk patients. Poorly documented patient information translates to less reliable risk-score calculations. This, in turn, can lead to an inaccurate representation of patients’ health needs. Yet data assurance can be a tedious process, requiring staff to review and update patient records.

For retrospective coding programs, one of the most significant challenges can be unsophisticated and overly-rigid coding tools. In fact, 39% of Xtelligent respondents noted that risk-adjustment efficiency would be improved by more sophisticated software. All too often, organizations rely on manual tools that are error-prone, costly, inefficient, and labor intensive. The result: Incomplete chart reviews, missed codes, or coding errors that cost time and money to review and correct—not to mention the fact that imprecise coding can affect revenue and lead to compliance issues.

Over the past few years, however, new, innovative products have come to market that streamline and improve the accuracy of the coding and review process. Episource recently launched our own NLP SaaS coding tool, epiCoder, which has been trained by 4,000+ coders reviewing over 11 million charts per year. epiCoder uses AI to assess chart difficulty so it can assign charts to the best-suited coder, ensuring all charts—not just those that are easy to read—are reviewed accurately and completely. With custom data available at the touch of a button, epiCoder can easily support provider education and second-pass reviews, providing a more precise picture of population health while also reducing compliance risk.

For prospective programs, typical approaches can be difficult to implement. Gap letters, web portals, and other processes outside the EMR and clinical workflow are onerous to providers and suffer from low adoption and impact. While EMR-embedded solutions work better, they can be prohibitively expensive to integrate and difficult to scale, particularly where a group has multiple EMR instances or versions. To solve these challenges, Episource has developed our own point-of-care tool that facilitates gap closure and improves clinical documentation in the EMR without cumbersome integration requirements. This tool allows providers to see and act on analytics without leaving their own EMR. In this way, we make it easy to identify and assess conditions for compliance and future analytics, while also providing clinical summaries that enhance provider relevance and support better care.

 

Find the Right Strategic Partner

 

Outside of leveraging innovative technology, how can healthcare organizations implement a balanced risk-adjustment approach? The best way to do this is by finding a strategic partner with deep knowledge of the entire risk-adjustment lifecycle.

When it comes to prospective strategies, a good risk-adjustment partner can help providers analyze historical member data to quickly and accurately categorize and identify patients who may need health interventions. Such analysis might highlight a group of patients with chronic heart conditions but no mention of depression. With this information, providers could conduct customized health risk assessments that include questions about socioeconomic factors to help validate or refute this assumption. A strategic partner can also help develop customized member-treatment programs and make recommendations about how to engage patients.

When it comes to retrospective strategies, finding a risk-adjustment partner that can leverage best-in-class NLP technology to quickly and efficiently review codes, flag errors, and translate hard-to-read provider notes will be critical. Such a tool should be able to identify commonly misused codes to inform and develop provider education programs to improve coding literacy. Over time, providers will get better at coding and feel more confident during the prospective risk-adjustment phase, knowing that patient history is detailed and accurate.

This balanced and mutually reinforcing approach to risk adjustment can ensure patient health profiles are as accurate and complete as possible, making it easier for providers to offer tailored treatment plans and ultimately improve patient health—the cornerstone of value-based care.

 

Episource arms clients with simple data, tools, and insights that empower them to navigate the chaos of the healthcare system. Learn more about our coding tool and other offerings at Episource.com.

Erik Simonsen
Chief Operating Officer
Erik is responsible for the delivery of onshore and offshore coding services, record retrieval, IT infrastructure, and compliance. His knowledge in engineering, finance, and operations enables him to continuously improve performance and operational transparency for clients. He has over 10 years’ experience managing outsourced centers, and substantive backgrounds in investment banking and technology. Erik has a BS in Biomedical Engineering from Johns Hopkins University and an MBA from NYU Stern.

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