Knowledge Expansion

Managing financial risk through patient risk scoring

Insight Article

Coding & Documentation

Business Intelligence

MGMA Staff Members
The emergence of value-based payment models has shifted financial risk from payer to provider. Effective risk management requires data-driven decision-making, putting the onus on healthcare providers to apply business intelligence to view expected costs of a patient or population through the lens of a payer.

That requires a keen focus on how your medical practice is handling Hierarchical Condition Categories (HCC) coding and patient risk scoring, according to Brian Smith, PhD, MBA, CSSBB, principal, Galvanic Health LLC. Getting to that point means building a mindset change for some physicians.

“Something I've encountered routinely and working with physicians across all specialties is that they all have complicated patients,” Smith noted. “Everybody says, ‘Of course, I'm coding all level 5s — because my patients are extremely complicated,’ and I think what they need to understand is, through the lens of the payer, complexity is based on what is reflected in the claim.”

In other words, it doesn’t matter how much free-text documentation is in the chart — if it isn’t on the claim form, payers not see the same complexity, much less the justification for the costs associated with the claim submission.

Smith will co-present alongside Adrienne Hollander, MD, managing partner, Arthritis, Rheumatic & Back Disease Associates, during MGMA20 | The Financial Conference in Nashville, Tenn., on implementing tools at the practice level to, as Smith says, “get the full economic value for that work performed as payments move from fee-for-service to value based.”

Hollander said that operationalizing that concept requires a fair amount of educating and socializing doctors to the idea so that it becomes a habit for documenting in records and in their fee slips.
 
In a similar vein as reviewing MIPS requirements, Hollander said her practice has been proactive in reviewing information on risk scoring by customizing charts to make them easier for doctors to use them.

There’s also a key role to be played in boosting clinical decision support for succeeding with HCC coding, Smith said, which can be difficult for practices of any size: Smaller practices may not have the support teams to embrace risk scoring right away, whereas larger multispecialty groups might struggle with catering to the individual needs of all the providers.

Smith cautioned that it can be tricky to connect the clinical and financial pieces on this issue because you risk losing a patient focus, but “that’s exactly what has to happen in order for these practices to succeed under value-based models.”
 
In Hollander’s view, it’s important to have the same information on patient risk scoring as the payers as the practice starts doing negotiations for value-based payment models and shared savings models. “We know what we see the patients for, but if we're not documenting that they have atrial fibrillation or these other things, then we won’t be able to have that same discussion with [payers],” she said. “We really want to have a better idea of what the cost the patients are having to the system are so we can have a better idea of cost attribution” to the practice under new models.

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