RISK ADJUSTMENT – MedPAC, Chart Reviews and HRA’s – Where are things headed, what will be eliminated?

Well, it’s been awhile since I have discussed Risk Adjustment (RA), and all things Hierarchical Condition Categories (HCC), nonetheless, I have been watching the headlines since COVID 19 has finally been declared over and watching what CMS, HHS and Medicare Advantage (MA), payers are considering to effect change in the way they all have been doing things since Risk Adjustment became a “thing” in 2004 (RA was put in place as of 1997, under Medicare Plus Choice, but eventually was replaced by Medicare Advantage in 2004).

Link to HHS timeline: https://www.hhs.gov/guidance/sites/default/files/hhs-guidance-documents/2012313873-fg-riskadjustmentmethodology_module1.pdf

When I first came on the RA/MA scene in 2011, I was working for an MA plan in The Villages Florida and the only guidance was this huge book from Medicare (CMS), which my boss referred to as the “RA Bible” and I need to familiarize myself with STAT, which I did and now, thirteen years later and the development of the MA program, along with The AAPC’s Credential, the CRC and RA program, there are many changes made to the way we all do business in the MA arena.

CMS has been under pressure from the Office of the Inspector General (OIG) and the Medicare Payment Advisory Commission (MedPAC) and others; to revise the way MA plans are allowed to extrapolate data from a patient’s chart. The focus is on Retrospective Chart reviews and Health Risk Assessments (HRAs), part of a mainstream model which MA plans use to collect diagnosis codes which correlate to HCC codes and overall, end the use of them for payment adjustments after initial submission.

CMS started this process as of January 1^st, 2024, and will continue implementation over the next three years phasing in the modified Part C Risk Adjustment model, the newly named 2024 CMS-HCC model, which CMS finalized with the CY 2024 Rate Announcement. Looking ahead for CY 2025 it will mark the second year of the phase-in, which means that CMS will start blending 67 percent of the calculated risk score using the new 2024 MA risk adjustment model and blending the remaining 33 percent of the calculated risk score with the 2020 MA risk adjustment model. Both models will also use ICD 10 CM Diagnosis codes and not ICD 9 CM Diagnosis codes, which have been in place since 2004. Below is a slide from MedPAC’s presentation which provides an estimate of Medicare Advantage coding intensity from these types of chart reviews and HRA practices: (click on the below link for the full presentation).

https://www.medpac.gov/wp-content/uploads/2023/03/Tab-E-MA-coding-intensity-Sept-2023.pdf

To fully understand the significance a change to how an MA plan may collect diagnosis codes, you first must understand the three types of chart reviews they can use:

Prospective Review – Prospective coding reviews assist providers for scheduled visits with plan members to ensure they address any potentially existing chronic conditions, as well as medications, hospital stays and more. The plan employs certified coders, AAPC and/or AHIMA who will proactively review a member’s chart in advance of the visit to identify these potential conditions that correlate to HCC conditions to assist the provider in capturing this data ahead of time. This information is conveyed generally through an EMR or with a provider directly face to face, prior to the members’ appointment. The provider must also document the indicated conditions addressed during the member visit as appropriate. A Prospective Review allows for identified or suspected chronic conditions to be addressed by the provider and eliminate any missed diagnoses etc., which previously had been missed and not submitted for reimbursement or added to a member’s clinical profile. In other words, a Prospective review is exactly as stated, a projection of data that doesn’t exist at the time when the data is submitted to CMS for “review/payment”. When this method of data extrapolation is utilized, it is based on accumulated data that is designed to predict future health risks in a member and eliminate coding inconsistencies and potential overpayments. Additionally, when a Prospective review model is utilized, it lends support towards precise documentation in the members medical record, as well as help improve patient outcomes.

Concurrent Review – Concurrent coding reviews allow HCC coders to analyze the patient’s chart, clinical notes, and HCC codes prior to submitting claims to the payers. This type of review is comparable to what I refer to as a “live or TOS” review, there is a slight delay involved, post visit. When Coder’s utilize this method of review, they must utilize remote access into an EMR to review the documented diagnosis codes from the provider, prior to any claim submission to ensure accurate data that can be correlated to HCC codes on a claim. This methodology to review claims generally eliminates the need for any additional retrospective reviews post submission. When MA plans deploy Concurrent review processes, they usually partner them with Prospective reviews and other processes to ensure accurate data capture.

Retrospective Review – Retrospective coding review is done after care has been provided and claims have been submitted to the payer. The logic for this type of a review is to uncover possible unreported HCC codes and/or incorrectly reported HCC codes by looking back through an audit. A Retrospective review in short utilizes existing data collected during a payment year for a member from various providers and/or entities the member saw during that payment year and is reviewed and submitted with any new or incorrect HCCs that were previously submitted, in hopes of potential payment from CMS. The convenient component of a retrospective review is that these diagnosis/HCCs can be submitted to CMS without having to go back and confirm with a provider. This leaves a huge margin for error, and we have seen this in many MA cases of over/up coding over the years, which again, supports MedPACS and the OIGs urgence to have CMS review and utilize the new 2024 CMS- HCC methodology for the next three years.

CURRENT MODEL STATS – 2024

The 2024 CMS-HCC risk adjustment model is adjusted using ICD 10 CM diagnoses from CY 2018, and 2019 reported costs. The revised model will also, is now based on ICD-10-CM-to-HCC mappings, instead of ICD 9- CM to HCC mappings. Additionally, the CY 2024 CMS-HCC model classifies close to 74,000 ICD-10-CM diagnoses codes into 266 CMS-HCCs, 115 of these are included in the 2024 payment model versus 86 HCCs in the 2020 payment model. The influx of these additional HCCs is a direct result of using ICD 10 CM diagnosis codes, which contain an increased level of specificity versus ICD 9 CM diagnosis codes.

****Moving from ICD-9 CM to ICD-10 CM led to upwards of 97 % of codes being excluded from the new 2024 CMS-HCC payment model

THE ROAD AHEAD –

The new 2024 CMS-HCC model eliminates a multitude of incorrectly reported diagnosis codes and HCCs, which resulted directly from chart reviews, as well as health risk assessments (HRA). All eyes in the MA industry are laser focused on this initiative and there is active talk, that depending on how things progress, CMS may consider complete elimination of these types of data extrapolation for diagnosis codes in the future, which will potentially and significantly impact the entire MA industry, top to bottom with what CMS has projected as a positive move forward.

Now that we are close to the third quarter of the new CMS-HCC 2024 MA risk adjustment model, the hope is that these changes lend support to ensure more accurate MA payments in 2025. The new CMS-HCC 2024 model hopes to achieve this with better utilization, improved costs, and accurate coding and of course the reclassification of HCCs to better reflect clinical costs as they translate to ICD 10 CM codes instead of the old ICD 9 CM codes which did not accurately allow for updated data.

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