Risk Adjustment Solution Is Becoming Increasingly Crucial In The Healthcare Industry

Adopting value-based care programs and incorporating technology for high clarity is propelling the healthcare industry to acknowledge the increasing relevance of the Risk Adjustment Solution in various health insurance programs. Furthermore, the innovative government interpretations of legal responsibility connected to Risk Adjustment (RA) and precise reporting are fueling the momentum for modern tools that allow the analysis of health data variables to level-set assessments of member wellbeing.

The Process of Risk Adjustment Solution at Its Most Basic Level

The Centers for Medicare & Medicaid Services (CMS) employs Risk Adjustment to modify capitated disbursements (the payment is calculated per member per month). It is due to Medicare Advantage Organizations and other risk-bearing insurance organizations to reflect changes in predicted recipient health expenditures. CMS estimates Risk Adjustment payments based on the demographics of recipients and the diagnosis codes provided for the previous year.

A Risk Adjustment Factor (RAF) score is issued to each recipient to represent each patient's health condition. This RAF score functions as a multiplier on the capitated payment standard rate. The greater the risk score, the greater the recipient's projected cost and the bigger the capitated payment.

The technique of Risk Adjustment

 The mechanics of the Risk Adjustment Solution can be divided into the following steps.

•      Clinicians conduct face-to-face encounters with patients.
•      Clinicians file the diagnosis codes to health insurers.
•      Health insurers go through chart reviews to find any errors and supplemental codes.
•    Health Insurance Companies submit the government server's demographic data and diagnosis codes (HCCs).
•      CMS estimates RAF scores by employing the HCC model and regulates payment.

Focus Should Be on Precise and Accurate Reporting

Risk Adjustment Solution and related statistical procedures to ensure satisfactory healthcare outcomes and costs have risen as insurance coverage and value-based models continue to gain traction in the healthcare sector.

Healthcare organizations use HCC Coding Solution to improve accuracy and fill in care gaps. It has a significant influence on the RAF score of the organization, which helps to acquire financing and reimbursement.

CMS and the Office of Inspector General (OIG) have recently focused on Risk Adjustment documentation to verify that statistical information provided by health plans and disbursements to them are precise and accurate.

CMS and the Office of Inspector General sometimes seemed to conflict over some Risk Adjustment techniques, providing varying recommendations on the matter.

Upcoding and precise coding for prior medical history (chart lists) are two significant Risk Adjustment categories that health insurance companies should address when reviewing their compliance with risk adjustment information disclosure.