The concept of risk adjustment is nothing new for many physician practices. Medicare has used risk adjustment factors (RAFs) to adjust payments for Medicare Advantage plans since 2004 under the Centers for Medicare & Medicaid Services (CMS) hierarchical condition category (HCC) model.
But as the fee-for-service world of reimbursement gives way to more alternative payment models (APMs), understanding the ways payer contracts will change with risk-adjusted coding such as an HCC is all the more vital, according to Susan Whitney, CPC-I, CMPE, senior content manager, MGMA Organizational Content. (Learn more in the Coding Corner article in the April MGMA Connection magazine.)
But the embrace of risk-adjusted coding for physician practices does not appear to be widespread, as a Sept. 12 MGMA Stat poll found that 40% of respondents say their organization does not code for risk adjustment. Only 28% of respondents said their organization does code for risk adjustment, with another 32% unsure about whether their practice has included risk adjustment in their medical coding.
The poll had 813 applicable responses out of 845 total responses.
Multiple respondents at practices using risk-adjusted coding pointed to adding HCC coding, either as part of Medicare, an accountable care organization (ACO) or another quality-based payer incentive. “So many payers include factors related to risk adjustment,” one respondent said. “We’ve had audits, provider trainings and we monitor average risk score compared to other similar clinics in our region [as well as] our providers to each other.”
One respondent from a specialty practice attempting to navigate risk adjustment noted the group’s experience has been frustrating. “We are documenting way more than we need to about things that don’t pertain to us … hoping to hit the mark,” the respondent said. Another poll respondent whose organization does not code for risk adjustment said they were advised it was suited mainly for primary care practices.
But Whitney said that specialty practices should not shy away from risk adjustment models and HCC coding — and that good, fundamental documentation is the starting point. “What it all boils down to is understanding HCCs is a lot easier to understand when you understand that it just gets back to the basics of good, quality ICD-10 coding. Section J of the ICD-10 coding guidelines says to code all documented conditions that co-exist at the time of the encounter — [if you are] coding to the highest level of specificity, you’re already halfway there to having the foundation for HCC coding.”
Other respondents whose practices don’t code for risk adjustment cited being able to capture some risk adjustment in their EHRs based on HCC diagnosis codes but not coding them, or tracking risk adjustments but not actually coding them or only taking them into account when reviewing payer contracting and planning reimbursements.
Whitney says that as the shift to value continues, proper documentation and precise coding skills should be near the top of practice administrators’ list for ensuring that a move away from a fee-for-service mindset is successful. Whitney led a webinar earlier this year on how HCC codes translate a patient’s diagnoses into a risk score and how higher risk scores can produce higher healthcare costs.
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