Capturing accurate diagnostic codes through comprehensive risk adjustment programs has become increasingly important for provider-sponsored health plans to improve patient care and clinical quality.
According to the American Medical Association, "risk adjustment describes methods for determining whether patient characteristics will necessitate higher utilization of medical services. Variation in patient characteristics can substantially affect whether or not payments made to you under a given risk arrangement will be adequate." Successful risk adjustment is an important step toward understanding and promoting the collective health of patient populations.
Accurate risk adjustment programs help hospitals and provider-sponsored health plans develop comprehensive and coordinated care plans, and they support a better view of a specific population's clinical profile and propensity to pay.
All of these factors help hospitals and provider-sponsored health plans capture appropriate reimbursement. If hospitals and provider-sponsored health plans leverage targeted analytical risk adjustment tools, they may find that they only need to target the top 20 percent of their patient population to capture roughly 80 percent of their total revenue, according to Evolent Health, a company that provides an integrated value-based healthcare platform and solutions to health systems and physician organizations.
There are six essential components to successful risk adjustment programs, Evolent risk adjustment experts Jason Miller and Maushumi Mavinkurve said during a session at the Becker's Hospital Review 2nd Annual CIO/HIT + Revenue Cycle Conference in Chicago.
1. Leadership engagement. Engaged leaders are needed to help the operational staff, physicians and networks to understand how risk adjustment can benefit attributed patients' health and care delivery.
2. Physician champions. A clinical leader such as the organization's CMO should be in place to help educate fellow physicians on the clinical and financial impact of risk adjustment.
3. Market support. Hospitals and physician practices can benefit from enlisting population health managers or coding educators to engage clinicians and help with the documentation and operational components of a robust risk adjustment strategy.
4. Targeted strategy. "A targeted strategy to leverage robust analytics allows physicians to focus on patients with the highest opportunities to impact future events based on their active conditions," said Mr. Miller, managing director of risk adjustment at Evolent.
5. Provider incentives. There has been an increase in commercial reimbursement contracts with a risk adjustment component to incentivized coding improvement among physicians, according to a 2015 Milliman report. The goal of these incentive arrangements is to reward the provider "for more accurately and completely coding diagnoses for the health plan's population," according to the report. The level of incentives may vary based on the current compensation structure, but leadership should discuss strategic implications of different incentive models in concert with legal counsel before formalizing an approach, Mr. Miller said.
6. Data analytics. "Provider-sponsored health plans have unique access to clinical data, which allows them to gain more insight into patient profiles," said Ms. Mavinkurve, director of risk adjustment at Evolent. "This provides more opportunities to engage physicians and improve clinical quality." By introducing insights that were not otherwise documented in the patient record, physicians are able to better understand the full patient picture and more accurately code patient diagnoses, thereby increasing chances for payment, according to Evolent.