The HCC model assigns a Risk Adjustment Factor (RAF) to each Medicare patient as measurement of probable costs, which is then used to adjust capitation payments for patients enrolled in Medicare Advantage plans.
Full Answer
What is MRA Medicare risk adjustment?
What is MRA? MRA – Medicare Risk Adjustment – was established in 2003 and phased in over a five year period. Risk adjusted reimbursement attempts to fund providers for the anticipated costs of care based on the patient's health status.
What is Medicare Advantage risk adjustment?
- “Ensure the accuracy and integrity of risk adjustment data submitted to CMS. ...
- Implement procedures to ensure that diagnoses are from acceptable data source. ...
- Submit the required data elements from acceptable data sources according to the coding guidelines.
What are risk adjustment factors?
Risk Adjustment Factors — known as RAFs — are the average risk scores for specific HCCs. They’re used in combination with demographics to determine an individual’s final risk score. The higher a person’s RAF, the more likely it is that they’ll end up in high-risk adjustment programs or see increased premiums due to their diagnosis ...
What is the definition of risk adjustment?
Risk adjustment is a a modern technology that accounts for known and/or discovered health data elements to level-set comparisons of wellness among members. As defined by the Centers for Medicare and Medicaid Services (CMS), risk adjustment predicts the future health care expenditures of individuals based on diagnoses and demographics.
How does Medicare risk adjustment work?
Risk adjustment is a statistical method that seeks to predict a person's likely use and costs of health care services. It's used in Medicare Advantage to adjust the capitated payments the federal government makes to cover expected medical costs of enrollees.
How does HCC coding work?
HCC coding relies on ICD-10-CM coding to assign risk scores to patients. Each HCC is mapped to an ICD-10-CM code. Along with demographic factors such as age and gender, insurance companies use HCC coding to assign patients a risk adjustment factor (RAF) score.
What is risk adjustment in coding?
Documentation and Coding Practices for Risk Adjustment and Hierarchical Condition Categories. Risk adjustment is a statistical process that considers the underlying health status and health spending of patients when examining their healthcare outcomes or healthcare costs.
How does risk adjustment work?
Risk adjustment is a methodology that equates the health status of a person to a number, called a risk score, to predict healthcare costs. The “risk” to a health plan insuring members with expected high healthcare use is “adjusted” by also insuring members with anticipated lower healthcare costs.
How does HCC risk adjustment work?
Both HCC models use a risk adjustment factor (RAF) score to calculate expected future health costs for each patient. Instead of providing one base payment for every patient, the risk adjustment model allows for more accurate payments for expected costs based on health status and demographics of every enrollee.
How is HCC risk score calculated?
There are relative factors associated with each HCC and interaction. Sum of Factors Demographic + Disease = raw risk score The relative factors for all of the demographic variables, HCCs, and interactions are added together. The result is the raw risk score.
How is Medicare risk score calculated?
The purpose of the Medicare risk scores is to estimate a relative cost factor. (i.e., it is a payment risk score). CMS calculates individual beneficiary-level risk scores by adding the relative factors associated with each beneficiary's demographic and disease factors.
What is CMS risk score?
The CMS-HCC risk score for a beneficiary is the sum of the score or weight attributed to each of the demographic factors and HCCs within the model. The CMS-HCC model is normalized to 1.0. Beneficiaries would be considered relatively healthy, and therefore less costly, with a risk score less than 1.0.
How is a RAF score calculated?
The risk adjustment factor (RAF) score is the risk score assigned to each patient in a risk adjustment payment model. Risk Adjustment Models account for multiple factors to calculate a RAF score which is the combination of both the demographic risk score and the disease risk score.
What is a Medicare risk Adjustment Factor?
A risk adjustment factor system is used to adjust plan payments to ensure fair payment for providing healthcare services and benefits for a population of patients, sometimes know as population health management.
What is the goal when coding for risk adjustment purposes?
What is the goal when coding for risk adjustment purposes? to report A complete and accurate clinical profile of the patient.
What is CMS HCC risk adjustment model?
The CMS-HCC risk adjustment model is used to adjust payments for Part C benefits offered by MA plans and PACE organizations to aged/disabled beneficiaries. The CMS- HCC model includes both diseases and demographic factors.
What is overcoding in risk adjustment?
Overcoding in risk adjustment refers to using an incorrect code with a higher score value rather than the correct code based on documentation.
What is risk adjustment?
Risk adjustment is a payment methodology developed primarily for insurers. Health plans that participate in government-developed risk adjustment programs accept payment based on anticipated healthcare expenses of all enrollees, removing payers’ incentive to insure only lower-risk (healthier) patients.
What is baseline audit?
The audit will establish a consistent methodology for selecting and examining records and will serve as a basis for future audits.
Why is it important to not submit diagnosis codes?
As much as it is important to accurately capture all conditions that currently exist and require treatment, it is equally important to not submit diagnosis codes for conditions the documentation does not support.
Can a coder make an educated determination of the correct code?
There may be instances in which the coder cannot make an educated determination of the correct code and clarification from the provider is necessary prior to claim submission. If warranted, the provider may attach an addendum to the office note clarifying the documentation.
Should risk adjustment coders document only for risk adjustment?
Risk adjustment coders should never suggest what to document solely for risk adjustment purposes; it is a good idea to avoid focusing on risk value examples when reviewing a medical record with the provider, even if risk value was part of the decision to initiate education to the provider.
What is the coding intensity adjustment for Medicare Advantage?
Since 2010, Congress has required CMS to apply a coding intensity adjustment to Medicare Advantage payments that is an across the board cut to Medicare Advantage risk scores. The purpose of the adjustment is to account for differences in coding patterns between Medicare Advantage and FFS Medicare — differences that are a function of the differences between the structural payment and care models in the Medicare Advantage and FFS Medicare programs. Per statute, the coding intensity adjustment has increased from a 3.41% reduction in 2010 to a 5.91% reduction for payment year 2018. The coding intensity adjustment must remain no less than a 5.91% reduction to risk scores for all subsequent years. CMS has the authority to determine the amount above the statutory minimum. To date, CMS has applied the minimum coding intensity adjustment required by law.
What is risk adjustment?
Risk adjustment is an essential mechanism used in health insurance programs to account for the overall health and expected medical costs of each individual enrolled in a health plan. Accurate documentation of diagnoses by clinicians is a critical component of the risk adjustment process.
What is Medicare Advantage?
These plans are approved and regulated by the Centers for Medicare & Medicaid Services (CMS) and the program undergoes an annual review process that makes policy changes and sets payment rates for the next year .
What is the difference between FFS and Medicare Advantage?
Accurately identifying illness is key to the comprehensive approach to care in Medicare Advantage. FFS Medicare reimburses providers separately for each episode of care. In contrast, Medicare Advantage is structured to encourage early identification of illness, coordinated care, and improved beneficiary health outcomes.
Does risk adjustment occur across metal levels?
Risk adjustment occurs across metal levels. Plans in different metal levels will not only have different expenditures for the same condition, the range of the relative expenditures for low and high risk individuals will be farther apart in a bronze plan than in a platinum plan.
Can you receive ACA transitional reinsurance?
Plans in the individual market that receive risk adjustment payments may also receive ACA transitional reinsurance payments for the same high risk enrollees. Adjusting for transitional reinsurance payments would address concerns that a plan could be compensated twice for the same high-risk individuals
