WHI T E PAP E R
The APM’s Guide
to Risk Adjustment Success
This guide provides ACOs with an introduction to risk adjustment for Medicare
Alternative Payment Models (APMs), including an overview of the CMS HCC model
and key factors/KPIs for risk adjustment success.
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Contents
How to Use This Guide 3
An Introduction to Risk Adjustment for APMs 4
Alternative Payment Models (APMs) 5
Risk Adjustment Coding Process 6
Running a Successful Risk Adjustment Program 7
Coding Guidelines 8
Analytics & Technology 9
Evaluating Your ACO’s Risk Adjustment Performance 10
AI-Powered Risk Adjustment for Medicare ACOs 11
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How to Use This Guide
This guide is designed to be a foundational
reference for ACOs for Medicare risk adjustment
within CMS APM. It provides an introduction to
risk adjustment for APMs, an overview of the
CMS HCC model used in APMs, key factors for
risk adjustment success, and evaluation criteria
to help APM risk adjustment programs improve
over time.
Each of APM entity’s financial reimbursement is tied to performance against
quality, cost, and experience of care based on the risk burden of its eligible
Medicare population. CMS continues to authorize Alternative Payment Models
(APMs) to increase risk-sharing payment with providers that include: Medicare
Shared Savings Programs (MSSP), Next Generation ACOs (NGACO), Direct
Contracting Entity (DCE), and others.
While many provider groups have experience with performance-based contracts,
CMS’s risk adjustment process may be less familiar. However, in order to protect
benchmark performance and thrive under the different organizations, risk
adjustment expertise must be developed.
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An Introduction to Risk Adjustment
for APMs
Risk adjustment (RA) is a method used by CMS and HHS to Each patient covered under government programs such as
adjust healthcare payments to reflect the demographics and Medicare, Medicare Advantage, and the Affordable Care Act
ongoing needs of a patient population. The goal is to ensure receives a risk score called a Risk Adjustment Factor (RAF).
that organizations who serve needier patients receive additional This score is factored into the benchmark payments for
funds to cover their higher cost of care. Medicare and Medicare Advantage organizations, and is
based on a patient’s eligibility status, demographic factors,
Risk Adjustment Factor Calculation Example
Demographic
Condition ICD-10 Code CMS Risk Score Total RAF Score
Risk Score
Diabetes Mellitus w/ Renal Manifestations 250.40 0.508
UTI 599.0 0
0 (Trumped by
Diabetic Nephropathy 583.81
CKD Stage 3)
CKD Stage 3 585.3 0.368
Mild Degree Malnutrition 263.1 0.856
Old MI 412.0 0.244
BKA Status V49.75 0.678
Total 3.050 0.44 3.094
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AN INTRODUCTION TO RISK ADJUSTMENT
FOR APMs:
Alternative Payment Models (APMs)
APMs for ACOs and DCEs use the CMS Hierarchical Condition Most recently, CMS has limited
Category (HCC)1 risk adjustment model to calculate RAF value
for a covered population. There are 86 HCCs for Medicare and the risk-adjustment portion of the
Medicare Advantage programs, which are comprised of ICD
benchmark increase to 3% for both
codes. ICDs are mapped into diagnostic groups that represent
a specific medical condition. Diagnostic groups are then rolled MSSP and DCE with Claim Based
up into condition categories that describe a set of related
diseases. Hierarchies are used for related condition categories
Alignment, but there is no limit on
to ensure only the most severe manifestation of a disease is the downside adjustment.
coded within a category. Each HCC has an associated value
that is summed up in a patient’s overall RAF score. Organizations need to continue to manage their risk adjustment
bench-mark and use analytic insights to support activities that
contribute to their overall member risk management strategy,
FIGURE 1
including annual wellness visit (AWV) campaigns, provider
Hierarchy of codes used in the CMS HCC risk education programs, and care management.
adjustment model.
Unlike the Medicare Advantage risk adjustment program,
which allows for supplemental code submissions, Medicare
10,800+ ICD-10 Codes APMs must submit all supported condition codes to CMS
via medical and pharmacy claims within one year of the
encounter date of service. CMS uses these condition codes to
risk-adjust the covered patient population2 at the end of each
805 Diagnostic Groups
performance year. Using this updated population risk, Medicare
rebases each ACO’s historical benchmark to capture changes
between the benchmark years and the performance year. This
189 Condition
Categories updated benchmark is then compared to the performance year
expenditures to deter-mine shared savings or losses.
86
HCCs
Source:
1 [Link]
2 [Link]
Downloads/[Link]
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AN INTRODUCTION TO RISK ADJUSTMENT
FOR APMs:
Risk Adjustment Coding Process
Risk adjustment coding is the process of reviewing clinical documents for evidence of supported risk-adjusting
diagnoses that describe the patient’s health needs. In most cases, HCC codes are additive for each patient, so
the more codes found, the higher the patient’s risk score.
All diagnosis codes for risk-adjusting conditions must be captured on
Medicare encounter claims. Here’s how the coding process works:
Step 1: Develop a target list of Medicare patients eligible
1 during the payment year who merit a deeper look.
Step 2: Identify which patient charts to review. ACOs &
2 DCEs with smaller Medicare member populations may
choose to review all charts for eligible dates of service.
Step 3: Review patient charts for evidence of missing
3 risk-adjusting diagnoses.
Step 4A: If diagnoses have sufficient Step 4B: If diagnoses are missing appropriate
supporting documentation according to documentation for risk adjustment coding,
4A CMS guidelines, work with your Medicare 4B work to schedule assessment visits or guide
Administrative Contractor (MAC) to reopen physicians to evaluate patients during their
claims and add relevant ICDs. annual wellness visits (AWVs).
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Running a Successful
Risk Adjustment Program
Team Members
APM risk adjustment programs require a few key elements to be successful.
Your organization needs a number of people in place to perform
essential risk adjustment activities, including:
A coding manager One or more medical A data specialist who An operational liaison A member outreach
to oversee coder coders trained in HCC can help your coders to work with your MAC representative who
assignments and coding to perform access the right on claims corrections can work to schedule
performance chart reviews records for review patient visits to close
risk adjustment
documentation &
coding gaps
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RUNNING A SUCCESSFUL
RISK ADJUSTMENT PROGRAM:
Coding Guidelines
Coding guidelines provide a framework for patient chart reviews
to ensure that risk-adjusting diagnosis codes are accurately
assigned according to regulations.
There are two primary sets of guidelines applied to HCC coding: Some additional documentation best practices from
ICD-10 coding guidelines, which govern clinical diagnosis AHIMA1 include:
codes, and Risk Adjustment Diagnosis Validation (RADV)
• Documenting all cause-and-effect relationships.
guidelines, which govern administrative and documentation
requirements for hierarchical condition categories (HCCs). • Clearly linking complications or manifestations of a
disease process.
While ICD-10 guidelines are fairly straightforward, RADV
• Including all current diagnoses as part of the medical
guidelines are more open to interpretation. Many organizations decision-making process and documenting them in the
use the MEAT framework to assess whether documentation note for every visit.
supports risk adjustment coding.
• Only documenting diagnoses as “history of” or “past
Monitoring: Has the patient been evaluated for medical history (PMH)” when they are resolved.
M the condition?
Resources
Evaluation: What is the current status of the
E patient’s condition?
In addition to having a strong team to drive risk adjustment
Assessment: What did the physician do to further
A evaluate the condition?
strategy and oversee the work, you’ll also need financial
resources to devote to your efforts. Internal headcount, vendor
Treatment: What is the care plan for the condition coding support, and technology investments will require a
T based on the physician’s assessment? dedicated budget.
Tip: Most ACOs and DCEs performing HCC coding create their own set of internal
coding guidelines that provide instructions and clarification for common scenarios
that arise during chart reviews. Your organization should develop a tailored set of
guidelines that reflect your preferences and population.
Source: 1 [Link]
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RUNNING A SUCCESSFUL
RISK ADJUSTMENT PROGRAM:
Analytics & Technology
Without the right analytic capabilities and technology
solutions in place, it will be difficult to scale your risk
adjustment program. Some of the risk adjustment
areas of focus that can be optimized with analytics
and technology include:
Condition suspects and recaptures:
Using advanced metrics to identify Medicare members who may have
risk-adjusting conditions, physicians can assess patients appropriately at
the point of care and properly document & code conditions before the initial
claims submission.
Chart retrieval:
Using sophisticated analytics to understand which patients to pull charts for
and which servicing providers are most likely to have appropriate supporting
documentation ensures retrospective chart reviewers don’t waste time
reading documents with no evidence.
Chart reviews:
Using an AI-powered coding & QA platform can cut down on coding time,
improve accuracy, and provide a record of coder decisions to support
compliance requests.
Claims coding audits:
Using an AI-powered audit solution can help your team quickly review
submitted risk-adjusting codes on claims and validate supporting evidence in
linked encounter notes, identifying areas for provider training and improvement.
Annual wellness visit outreach:
Using analytics to help identify patients with suspected chronic conditions
that need to be evaluated, your organization can prioritize outreach for annual
wellness visit campaigns to ensure patients with the most severe health needs
are being appropriately managed.
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Evaluating Your APMs and DCEs
Risk Adjustment Performance
Whether your APM is just starting out with risk adjustment
or has a few years’ experience, it’s important to step back at the
end of each performance period and assess your program’s
impact and opportunities for improvement.
While risk adjustment program evaluation criteria varies across APMs and DCEs depending on activity, goals, and
sophistication, there are some common performance indicators to consider when developing your review plan:
Physician Documentation & Coding Retrospective Chart Reviews
KPIs: KPIs:
• % of claims with unsupported ICDs • # of net-new HCCs missing on submitted claims
(individual provider and group) • # of charts reviewed per hour (coding & QA)
• # of confirmed condition suspects / recaptures • % agreement rate between QA reviewers
(if running prospective programs) and coders
• # of documentation gaps closed during the • % of charts reviewed with no evidence
reporting year supporting HCCs
• YoY average RAF value per member
Patient Outreach Claims Corrections
KPIs: KPIs:
• % of high-risk patients who came in for • % of claims with missing ICDs found during
their AWV retrospective reviews
• % of responses from patients who received • # of clerical errors fixed with MAC during the
targeted outreach for an assessment visit to reporting year
close condition coding gaps • Aggregate RAF value of ICDs updated
with MAC
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AI-Powered Risk Adjustment
for Medicare ACOs
Protecting your APM benchmark requires accurate
claims coding. Apixio’s risk adjustment solutions for
ACOs and DCEs use AI to surface valuable insights
about patient conditions, streamlining the risk
adjustment coding process and ensuring your Medicare
claims contain accurate, well-supported ICD codes.
Our Solutions:
Our market-leading risk adjustment coding & QA solution that helps ACOs accurately and
efficiently captu e conditions documented in patient charts on encounter claims.
Our risk adjustment auditing and compliance solution that helps reviewers quickly and
thoroughly identify potentially unsupported HCCs on submitted.
Our AI algorithms curate text and coded data to produce enriched clinical summaries and
helpful tips and predictions, all of which are available in the clinical setting via workflow
embedded applications.
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Visit our website to learn how Apixio can help you get the most out of your
APM risk adjustment program efforts for your ACOs and DCEs.
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P: (877) 427-4946
E: info@[Link]
@apixio
1850 Gateway Drive, Suite 300 San Mateo, CA 94404
