How the RA Model Will Work Moving Forward
The finalized 2024 Medicare Advantage (MA) capitation rates and payment policies from CMS will affect how Medicare plans are reimbursed, how they pay downstream providers, and how they report and manage risk adjustment operations moving forward. It is important to understand these implications and create action plans to prepare for success in the changing environment. Here are some of the key risk adjustment aspects to consider from the rate announcement and some practical strategies to stay compliant.
Payments for the Average Plan are Increasing
CMS has stated that payment policies will have varying impacts on different plans, resulting in an average increase of 3.32%. The increase is due to several factors including effective growth rate, changes to Star Ratings policies, revisions to risk models and normalization, and predictable trends in risk scores. This is notably higher than the previously projected increase of 1.01% that was mentioned in the Advance Notice. The objective is to prevent benefit reductions that some plans warned about earlier.
HCCs that Require Payment Up, ICD-10 Codes Requiring Payment Down
The new payment model has 115 payment HCCs, which is 29 more than the current model. However, about 2,000 fewer diagnosis codes are mapped to these payment HCCs. CMS says that 97% of these changes resulted from the transition to ICD-10 diagnosis codes, which required remapping of diagnoses to HCCs. The remaining 3% of changes are due to discretionary coding, which happens when there is a lot of variation in coding for a certain diagnosis, making it difficult to predict costs accurately.
The decrease in ICD-10 codes mainly affects major depression, vascular disease, and inflammatory disease, which are still considered for risk adjustment. On the other hand, protein calorie malnutrition, angina pectoris, and atherosclerosis of extremities are no longer eligible for payment HCCs mapping.
“The push back against these changes during the comment period were strong. Primarily because the stakeholders understand that a more complex/comprehensive HCC system equals less coding density.”
Three Year Phase-in Period for RA Model
CMS has planned to gradually implement the proposed risk adjustment model over three years. Starting in 2024, the risk scores will be calculated using a mix of 67% of the current model and 33% of the new model. In 2025, the blend will change to 33% of the current model and 67% of the new model. By 2026, the risk scores will depend solely on the new model. This decision was taken after MA participants' lobbying efforts to allow more time to understand and adjust to the new model.
HCC Coefficients Constrained
CMS has made changes to the way it codes HCCs for payment. Specifically, some HCC coefficients are now limited to a single value for multiple payment HCCs, such as all diabetes HCCs having the same coefficient. This change was made because even beneficiaries with the same HCC can have different medical needs and costs, so the old method of coding had limited clinical significance and implications for medical treatment.
RA Model Updated to Recent Years
The risk adjustment model has been updated by CMS to use ICD-10 codes, which have been in use by the healthcare community since 2015. CMS has been using ICD-10 codes mapped to ICD-9 condition categories for risk adjustment while ICD-10 coding practices were being established across the healthcare system. It was expected that CMS would eventually revise the risk adjustment model to match the practices of the rest of the healthcare community.
CMS has updated the fee-for-service data years used in the model to 2018 diagnosis and 2019 expenditures in place of the previous 2014 diagnosis and 2015 expenditures. This is a regular update from CMS that ensures the model is reasonably current.
Practical Strategies to Stay Compliant
Prioritize Accuracy
Entities at risk due to the RADV Final Rule and related lawsuits and investigations should consider investing in solutions that can help them generate compliant yield. To achieve this, they must prioritize enhancing the accuracy and completeness of their documentation and coding. Also, it is essential to incorporate a Quality Improvement process that can review both additions and deletions and verify coding before submission. Moving forward, the transition to value-based care will increase the demand for compliance-centered solutions that concentrate on improving the accuracy and completeness of documentation and diagnosis codes.
Focus on the Needs and Satisfaction of Providers
To achieve better care, outcomes, and cost savings under value-based care, it is important for primary care physicians (PCPs) and payers to work together closely. One key factor that can ensure proper care for the rapidly increasing population of Medicare Advantage patients is accurate risk adjustment. This makes it important for providers and payers to collaborate in implementing risk adjustment and quality initiatives.
In addition, due to the Final Rate Notice causing the loss of several valuable HCCs, it is crucial to emphasize the capture and clinical validation of all risk-adjusted conditions. Legacy models have shortcomings, involve providers in extra work, interrupt the consistency of patient care, and do not follow patient care plans. It would be better to provide PCPs with a set of tools and resources to perform accurate HCC coding. This is because PCPs already have an established relationship with the patient, know their medical history firsthand, and can access their medical records in real-time. When payers and providers collaborate better in this aspect, it can result in improved clinical and financial performance.
Reconsider the Evaluations of Charts and Home Assessments
The Department of Justice, CMS, and OIG are focusing on chart reviews and home assessments that are not connected to the PCP and do not affect care. If the "No Upcode Bill" is passed, both of these practices may become antiquated.
Improving coordination with treating providers is another important concern. This can increase the likelihood of overall population health improvement and better performance in value-based care. One way to address this is by coordinating chart reviews and home assessments with in-office solutions, keeping Primary Care Physicians at the center of care.
Moving Forward
“The push back against these changes during the comment period were strong. Primarily because the stakeholders understand that a more complex/comprehensive HCC system equals less coding density---they rely on their already stressed providers to do the coding and trying to educate docs on how to code is a path to fail” says Dr. Tom Davis, an expert on full-risk insurance contracting.
A more comprehensive HCC system is a pain point that ForeSee Medical solves. In fact, it allows a prospective coding system to unlock even more value. Given the increased emphasis on compliance and data accuracy by payer organizations, and the increasing financial risk demanded of providers, look for prospective review to become the industry standard.
ForeSee Medical’s risk adjustment software for Medicare Advantage supports prospective workflows, integrates seamlessly with your EHR, and gives you accurate decision support at the point of care or before. Start capturing every appropriate HCC code and get the reimbursements you deserve for serving complex populations.
Blog by: The ForeSee Medical Team