The new age of risk adjustment

Success in the COVID-19 world requires critical considerations and new approaches.

As pandemic-driven economic instability proliferates and exacerbates pre-pandemic challenges in the U.S. health care system, health plans must:

• Act quickly to address member health care needs
• Collect data to effectively treat at-risk populations
• Accurately document risk scores

Implementing a holistic strategy can help improve risk scores and developing and implementing such a strategy begins by enhancing member and provider engagement to facilitate more health care visits and more accurate documentation at the point of care.

Traditional risk-adjustment considerations

The historic levels of unemployment spurred by the COVID-19 pandemic continue to lead to the loss of employer-sponsored health care coverage. Traditional risk-adjustment requirements still apply for health plans, including maintaining compliance programs to ensure the accuracy of data submitted to the government for payment, minimizing system inefficiency/poor provider documentation, adhering to tight timelines, and transforming data to meet complex government requirements.

Dynamic market conditions

Since March 2020, professional claims volume has plummeted to a fraction of past levels. Patients are not visiting their providers’ offices as often. This decrease in health care utilization creates a positive short-term revenue impact for payers. However, it also creates new challenges for managing risk in government-sponsored health plans and will reduce risk adjustment revenue for payers.

Risk scores will decline because of fewer office visits and elective procedures, therefore fewer claims and diagnosis codes will be captured to identify and close risk gaps. Initial Change Healthcare market analysis estimates an average 5 percent reduction in scores––a figure that will only increase compared to traditional scores as the pandemic continues.  

New approaches for the new normal

End-to-end approach drives results

There is now an urgent need to address pent-up demand for care. With limited time each year to gather documented conditions, it's critical to optimize risk-adjustment programs. The following are key steps and technologies payers can implement to help improve risk adjustment in this tumultuous environment.

• Leverage analytics for actionable insight. Analytics is an overarching and critical capability for enabling better risk-adjustment strategies. Integrated risk-adjustment analytics can help generate risk scores for your membership and identify optimal chase lists for various improvement initiatives, including, retrospective, prospective, and member- or provider-focused opportunities.
• Develop a holistic engagement strategy to support members. Before providers can adequately support patients, health plans must get them in front of a doctor. A comprehensive, holistic member engagement strategy is critical.
• Collaborate with providers. Health plans rely on providers to submit claims that capture accurate and complete diagnosis coding; yet physicians have little incentive or direct requirement to comply with health plan risk-adjustment objectives. The new normal has opened doors for payer-provider collaboration. To support risk adjustment, providers can:
  • Proactively reach out to patients/members to secure diagnosis information/updates
  • Prioritize patients considering revenue opportunities and quality of care
  • Review risk gaps in advance of visits
  • Document/capture conditions at time of visit
  • Include diagnosis code on submitted claims

• Consider operational opportunities. Address the pent-up demand for care by identifying networks with capacity and cost and quality performance.
• Leverage pre-submission opportunities. Identify potentially missing or incorrect diagnosis codes at the point of submission—before a claim reaches the health plan.
• Maximize the impact of chart reviews The increase in missed or cancelled visits means fewer charts are available. Health plans must take advantage of new solutions that help streamline and expedite data access, and simultaneously help payers retrieve a broader, more in-depth view of the member.
• Apply NLP to risk-adjustment coding. The results of integrating state-of-the-art natural language processing (NLP) and machine learning (ML) into risk-adjustment coding are compelling. In multiple engagements across a number of member populations, the technology has helped increase risk capture by 20 percent-30 percent and elevated average correct risk category capture to 95 percent.¹
• Identify, engage, and support dual eligible. This is an area where Artificial Intelligence (AI) can be used to identify more duals in an identified member population.

Conclusion
As policies and processes change and the pandemic exacerbates the challenges for health plans, they must employ innovative, collaborative tactics to evolve their risk-adjustment strategies and keep pace with the new health care environment. Strategic payers will accelerate the development of a cohesive and holistic approach to risk adjustment to help improve risk scores to generate more accurate reimbursement and better-quality performance. Click here to learn more.

 ^Source

^1. Health Fidelity

About the author
Jimmy Liu, vice president of risk analytics, Change Healthcare, is responsible for supporting the company’s Medicare, Medicaid, and Commercial ACA lines of business, with a focus on analytics, strategy, and innovation. He was one of the original developers of the Risk View^TM application, which helps plans receive appropriate payment based on the relative health of the at-risk population. As an expert in risk adjustment and risk scoring models, Jimmy has been helping health plans better understand and formulate their risk-adjustment strategy for the past 10 years.