In an era of accelerating medical costs and decreasing payments from the Centers for Medicare and Medicaid Services (CMS), accurately reflecting the health status of your members through proper HCC (Hierarchical Condition Categories) management is the only way for your Medicare Advantage plan to remain financially viable.
The Medicare risk adjustment payment system uses clinical coding information (HCCs) to calculate risk premiums for Medicare Managed Care Organizations (MCOs). After a lengthy phase-in, risk adjustments on payments reached 100 percent in 2007.
Beginning in 2007, 100 percent of your payments from CMS are based on the risk profile of your membership as determined by the HCC codes generated by their encounters with your physicians. On average, 80 percent of the codes in the Risk Adjustment Processing System (RAPS) come from claims submitted by a physician. The claim is really a proxy for a medical record entry and the assumption is that there will be documentation in a form acceptable to CMS for every code submitted in RAPS. Those payments have already been established, based on how completely and accurately members were coded.
The Good News:
You can go back to correct incomplete, inaccurate and missing codes with a Retrospective Program. Retrospective recovery involves identifying and locating those medical records most likely to contain incomplete, inaccurate and missing codes, then performing an enhanced chart review.
Undoubtedly, you would like to avoid waiting 12-18 months for correct payment and to avoid this delay you need a Prospective Program which:
- educates providers about complete and accurate coding practices
- ensures that all your current members are seen regularly
- quickly establishes the risk profile of new members
A successful Prospective Program gradually reduces the amount of retrospective work you need to do in the future.
The combination of retrospective and prospective activities conducted by your plan adds up to effective HCC management. Because 100 percent of your revenue is HCC-dependent, there is no bigger strategic issue facing your plan. By performing both these activities you will also greatly simplify the inevitable CMS risk adjustment data validation (RADV) audit by having the clinical documentation in the CMS required form.
For more information on a customized HCC Management program or to schedule a demonstration, please contact us.
