The healthcare industry is in the midst of a monumental shift towards value-based care, driven by CMS’s mandate for provider groups to embrace downside risk by 2025. To navigate this transformation successfully, provider groups, pay-viders, and ACOs must develop robust coding programs. That means having a strong understanding of all three methods for risk adjustment. Let’s explore exactly what retrospective, prospective, and concurrent risk adjustment are and how you can incorporate each to create a fully optimized risk adjustment program.

Retrospective Risk Adjustment

Retrospective risk adjustment is a tried-and-true method that many Medicare Advantage programs have relied on for years. As the name implies, retrospective risk adjustment involves looking back at a patient’s medical history to identify and code their conditions.

Advantages:

• Historical Insights: Retrospective coding shines when it comes to identifying historical HCC codes supported by a patient’s medical record. It digs deep into a patient’s medical history, providing a comprehensive view of their health conditions.
• Familiarity: Healthcare providers are accustomed to this approach, and many Medicare Advantage programs have successfully employed it for some time.

Limitations:

• Long-Standing Issues: One interesting aspect of retrospective coding is its tendency to uncover long-standing clinical documentation issues. These issues may have persisted for some time and may be challenging to resolve. While this isn’t a drawback per se — fixing issues is always a good idea, after all — you should be aware that these fixes may require time and effort.
• Claim Submission: Additionally, retrospective risk adjustment often requires a secondary process to flag and send corrected HCC coding information to the payer. This process is relatively straightforward for Medicare Advantage programs but can be cumbersome for ACOs and CPC+ programs.

Prospective Risk Adjustment:

Prospective risk adjustment takes a forward-looking approach, aiming to predict a patient’s risk score at the start of the year.

Advantages:

• Proactive Care: Prospective risk adjustment encourages a proactive approach to healthcare by predicting risk scores at the outset. This motivates physicians to address conditions early, and early interventions often lead to better outcomes for patients.
• Financial Predictability: Prospective coding enhances financial predictability for healthcare organizations. It allows for better budgeting and resource allocation based on expected risk scores at the beginning of the year.

Limitations:

• Changing Health Status: Prospective coding may not fully account for changes in a patient’s health throughout the year, as it’s based on the initial assessment. To be effective, it relies on the accuracy and timeliness of patient data.

Concurrent Risk Adjustment:

Concurrent risk adjustment offers real-time monitoring of a patient’s health conditions and risk scores as new information becomes available.

Advantages:

• Real-Time Accuracy: Coders review the EHR/medical notes and HCC codes in real-time before claims are submitted, delivering accurate coding that aligns with clinical documentation.
• Reduced Need for Retrospective Reviews: This method reduces the need for time-consuming retrospective reviews and corrections, since coding issues are addressed as they arise.

Limitations:

• Labor-Intensive: Concurrent coding is labor-intensive, requiring coders to review claims in real-time, which can be resource-intensive.
• Works Best When Used with Other Forms of Risk Adjustment: Concurrent risk adjustment works best when combined with both prospective and retrospective approaches to ensure comprehensive risk adjustment.

Balancing Prospective, Concurrent, and Retrospective Risk Adjustment:

The key to successful risk adjustment in the transition to value-based care lies in finding the right balance between prospective, concurrent, and retrospective coding. Each stage complements the other and reduces the time and cost required for subsequent processes. A holistic, patient-centric approach is paramount, as the ultimate goal is to understand the health of the patient population and predict its future evolution.

While retrospective coding looks at the patient’s past, prospective coding aims to predict their future health risks. Concurrent coding acts as the bridge between the two, ensuring real-time accuracy and minimizing the need for retrospective reviews.

Some of the most sophisticated healthcare organizations in the country are achieving success by using all three methods of risk adjustment. Together, retrospective, prospective, and concurrent coding are powerful tools to deliver accurate risk scores and accurate medical records. This level of accuracy is a vital component for delivering high-quality care to patients.

References

Karen Weed. (2019, May 30). 3 varieties of HCC coding review: Prospective, concurrent, and retrospective. HCC Coding & Healthcare Revenue Cycle Management Solutions. https://www.rcxrules.com/blog/prospective-concurrent-retrospective-review

Segal, E. (n.d.). Develop a prospective mindset for better patient outcomes. RISE. https://www.risehealth.org/insights-articles/develop-a-prospective-mindset-for-better-patient-outcomes/

Simonsen, E. (2022, October 12). The best of both worlds: Balancing retrospective & prospective strategies. Episource. https://go.episource.com/bulletin/the-best-of-both-worlds-balancing-retrospective-prospective strategies#:~:text=Prospective%20strategies%20should%20be%20your, care%20gaps%20or%20unsubstantiated%20codes