Medicare Advantage (MA) plans, also known as Medicare Part C, offer Medicare benefits through private health insurers. These plans are growing in popularity due to their additional benefits and lower out-of-pocket costs. However, with these advantages come stringent regulatory requirements, particularly concerning risk adjustment. A robust risk adjustment compliance strategy is essential to ensure accurate reimbursement, avoid penalties, and deliver high-quality care to beneficiaries.
Understanding Risk Adjustment
Risk adjustment is a crucial process that ensures Medicare Advantage plans receive appropriate compensation for the health risk of their enrollees. The Centers for Medicare & Medicaid Services (CMS) uses Hierarchical Condition Categories (HCCs) to adjust payments based on the relative health of beneficiaries. Complete and accurate reporting of diagnoses and HCCs is vital for appropriate reimbursement and maintaining compliance with CMS regulations.
Key Components of a Risk Adjustment Compliance Strategy
1. Data Accuracy and Integrity
The foundation of an effective risk adjustment compliance strategy is accurate and complete data. Ensure that all diagnosis codes submitted are supported by proper medical documentation. Regular internal audits of medical records can help identify discrepancies and correct them before submission. Implementing robust electronic health record (EHR) systems can streamline data collection and improve accuracy.
2. Provider Education and Training
Providers play a critical role in the risk adjustment process. Educating them about the importance of accurate and thorough documentation is essential. Regular training sessions can keep providers updated on the latest coding practices and CMS guidelines. Encourage a culture of compliance where accurate diagnosis coding is prioritized.
3. Risk Adjustment Data Validation (RADV) Audits
CMS conducts RADV audits to ensure the accuracy of risk adjustment data. Preparing for these audits is crucial. Develop a comprehensive audit strategy that includes regular internal reviews and mock audits. Address any identified issues promptly and implement corrective actions to prevent recurrence.
The Importance of Compliance: Strengthening Oversight with the RADV Final Rule
The U.S. Department of Health and Human Services (HHS), through CMS, finalized the policies for the MA RADV program. This program is CMS’s primary audit and oversight tool of MA program payments. Under this program, CMS identifies improper risk adjustment payments made to Medicare Advantage Organizations (MAOs) in instances where medical diagnoses submitted for payment were not supported in the beneficiary’s medical record.
The policies finalized in the RADV final rule (CMS-4185-F) will help CMS ensure that people with Medicare are able to access the benefits and services they need, including in Medicare Advantage, while responsibly protecting the fiscal sustainability of Medicare and aligning CMS’s oversight of the Traditional Medicare and MA programs. As required by law, CMS’s payments to MAOs are adjusted based on the health status of enrollees, as determined through medical diagnoses reported by MAOs.
According to CMS and the HHS Office of Inspector General (OIG), studies and audits have revealed discrepancies between Medicare Advantage enrollee’s medical records and the diagnoses reported by MAOs, leading to significant overpayments and increased costs to the Medicare program.
CMS’s Final Rule, released in early 2023, introduces a rule to address these issues. It includes measures to conduct audits and recover overpayments, aiming to strengthen the Medicare Advantage program by addressing long-standing management and performance challenges.
These policies highlight that CMS will continue to focus its audits on those MAOs identified as being at the highest risk for improper payments.
Second-Level Reviews
Another aspect is the verification of claims data against medical records. Implementing second-level reviews (2LRs) can address this gap by examining claims data to ensure it is supported by corresponding medical records.
This practice can strengthen data accuracy and help mitigate the risk of RADV audit findings. By adopting a more robust 2LR process with claims validation, healthcare plans can identify and address potential inaccuracies and avoid significant financial liabilities.
Compliance Program Development
A well-defined compliance program is essential for managing risk adjustment processes. Establish clear policies and procedures for coding, documentation, and data submission.
Leveraging technology can significantly enhance your risk adjustment strategy. Advanced analytics tools can identify gaps in care, trends, and areas for improvement. Implementing retrospective reviews enhanced by natural language processing (NLP) can help identify instances of under- and overcoding.
To assist your compliance efforts, consider using a single platform for all your risk adjustment needs. When all of your data is housed together, it is easier to analyze the data to find gaps. A full end-to-end platform will also offer services to review your coding and submissions — giving you a second chance to correct non-compliance.
We would like to introduce you to the Episource Clarity Platform. This end-to-end platform simplifies all steps in the risk adjustment process: analytics, chart retrievals, coding reviews, and submissions.
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Developing a risk adjustment compliance strategy for Medicare Advantage plans is a complex but essential task. By focusing on data accuracy, provider education, robust compliance programs, and leveraging technology, MA plans can ensure accurate reimbursement and adherence to CMS regulations. Maintaining a proactive approach to compliance not only mitigates risks but also enhances the quality of care provided to beneficiaries. As the healthcare landscape continues to evolve, a strong risk adjustment compliance strategy will remain a critical component of successful Medicare Advantage plans.
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