Understanding The Importance Of Risk Adjustment System For Medicare Advantage Plans

The Centers for Medicare and Medicaid Services (CMS) compensates Medicare Advantage (MA) Plans depending on the health condition of the recipients, with aged and sicker participants getting more compensation and younger and healthier participants receiving lesser funds.

This "risk-adjusted" financing method is created to stimulate Medicare Advantage Plans to establish a healthcare system that appeals to the most vulnerable recipients while prohibiting MA plans from benefiting by only enrolling favorable risks.

The Risk Adjustment Solution's goal is to appropriately cover all the expenses of delivering approved services to Medicare Advantage members, particularly those with complicated diseases. The Risk Adjustment model must reliably anticipate healthcare expenditures, especially for dual-eligible Medicare and Medicaid beneficiaries and those with complex constraints.

What Is the Process?

The Medicare Advantage Plans employ a risk adjustment algorithm to allocate a number or "risk score" to every recipient based on their age, gender, health condition, and other characteristics. The risk score of a recipient depicts the person's potential health costs compared to those of a standard recipient.

 Medicare Advantage Plan participants' risk scores are multiplied by the plan's basic payment amount. It is either the plan's offer for paying legal recipient expenses or the reference if the offer is equivalent to or above the reference. To establish overall reimbursement, the risk-adjusted basic payment is utilized to the refund for plans offering below the standard.

The health of MA subscribers is assessed through diagnostic data provided by the MA Plans themselves. Consequently, MA plans have significant incentives to discover and record several conditions backed by medical notes. Even though some Medicare Advantage Plans have utilized deceptive tactics to exaggerate subscribers' risk scores, there is a range of legitimate solutions available to enhance risk scores.

Precise HCC Coding is Crucial to Be Fairly Compensated

Certain specialized medical Risk Adjustment Solutions can aggregate accessible patient data and, leveraging machine intelligence and healthcare analytics, uncover HCC related conditions in clinical documentation and recommend International Classification of Diseases (ICD) codes that significantly improve Risk Adjustment Factor (RAF) Medicare reimbursements.

Before submitting a claim, healthcare institutions should expedite pre-encounter planning and increase coding efficiency criteria. Medicare risk adjustment algorithms combined with clinical decision assistance at the point of care allow addressing HCC Coding gaps and HEDIS discrepancies.

Moreover, monitoring HCC scores for patients properly indicates actual complexity, ensuring sufficient resources are accessible for complex and challenging demographics and assisting the practice in becoming more efficient and effective in value-based systems.