Risk Adjustment

Not All Coding Is Created Equal

Medical coding isn’t “one size fits all.” And when it comes to risk adjustment, the ramifications of this can be enormous.

As the move toward value-based reimbursement continues, it’s paramount that health plans work with coding partners that have an experienced and certified coding staff. Otherwise, payers will get exactly what they pay for — which isn’t necessarily a good thing.

Health Plans are responsible for each diagnosis code that CMS uses to calculate member risk scores. RADV audits, along with the possible OIG audits, can be a nightmare for payers with inaccurate diagnosis submissions. That’s why it’s imperative that coding be precise and have the appropriate supporting documentation. Another reason that coding must be correct: accurate reimbursement, as compliant coding is key to financial integrity.

The concept of HCC coding is continually evolving. Though diagnosis codes were specifically included to account for the increased expense of treating patients with comorbidities, CMS is modifying the CMS-HCC Risk Adjustment Model.

In changes proposed in the Advance Notice issued Dec. 27, 2017, CMS aims to rectify underpayment or non-payment for certain diagnoses as well as to adjust payment for beneficiaries with multiple conditions. Though the exact model won’t be finalized until the annual April Rate Announcement, a discrete risk adjustment factor is anticipated for 2019 that will make an additional adjustment as an individual’s number of diseases or conditions increases. Given the yet-to-be-determined changes, it will be more important than ever for coders to capture all active diagnoses, both acute and chronic.

Chronic conditions — those that are never cured — must be reported to CMS one time per year for a condition’s HCC to impact the member risk score. Clinician documentation, the primary source that certified coders rely on in their work, is the key to risk adjustment. At times, a clinician will not document an encounter with the greatest clarity. This is when a certified coder’s knowledge of official coding guidelines can have the greatest impact. With the coming changes, it will be tantamount to capture HCCs such as:

  • Diabetes without complications
  • Diabetes with complications
  • Amputation Status
  • Vascular Disease
  • COPD
  • Fibrosis of Lung and Other Chronic Lung Disorders

For example: A patient visits a doctor for a checkup that addresses their neuropathy, but the patient’s diabetes is not formally monitored or assessed. However, if that same encounter’s PHI section lists diabetes, a coder can link the two. From a risk adjustment perspective, capturing Diabetes with Neuropathy is coding to the highest level of specificity, which is ideal.

Now let’s say the same patient also has COPD. Given the new risk adjustment factor, it will be more important than ever for Health Plans to ensure that this HCC is captured too.

The Clinical Value of Accurate HCC Coding

While appropriate reimbursement is also important to providers, accurate coding is also clinically significant: Complete coding conveys a patient’s overall health.

In turn, payers are then better able to improve quality of care and ensure that members are enrolled in the appropriate disease management programs. This especially matters for high-needs patients, who must receive adequate and targeted care (which in turn can help avoid further, costlier care). For example, continuing with the patient example above, capturing COPD will help ensure the patient has been prescribed the appropriate medication to prevent future flare-ups.

In summary, payers must take care when choosing coding vendors. Accurate and complete HCC coding — key for financial integrity, avoiding audit penalties, and accurately capturing a patient’s (and a population’s) health — is too important to neglect.


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