3 Ways Health Plans Can Ensure Risk Adjustment Compliance

By paying more for beneficiaries who are expected to have higher medical costs, federal risk adjustment programs help promote equity. To ensure increased payments are backed by valid clinical diagnoses, the government has started taking a closer look at risk adjustment practices.

In fact, a September 2021 report from HHS’ Office of Inspector General highlighted potential concern around Medicare Advantage plan risk adjustment practices. The report found that 20 plans received large payments for beneficiaries with diagnoses unsupported by clinical care and backed only by medical chart review or risk assessments.

Following this investigation, payer organizations that offer Medicare Advantage have faced increased government scrutiny. However, all health plans engaging in risk adjustment would be wise to take note. By making diligent compliance efforts a priority in the years ahead, plans can shore up existing processes to achieve financial success and ensure compliance as regulatory bodies take aim at organizational missteps.

Why Is Risk Adjustment Such a Challenge?

A significant part of the risk adjustment process involves diagnosis codes, which are continuing to grow in number and update frequently. Depending on the health care model, there are thousands of nuanced codes across a spectrum of categories, posing a challenge to health plans attempting to develop compliant policies and protocols.

Compounding this complexity is the fact that clear guidance on how payers and providers should use these codes is lacking, including what specific documentation is needed to validate a diagnosis. Health plans often create their own policies and then must adjust accordingly when CMS issues new guidance. In turn, coders and physicians are regularly adjusting to new standards around what is needed to support compliant and accurate risk adjustment.

The following 3 strategies can help plans both keep pace with evolving risk adjustment requirements and ensure compliance in the event of an audit.

Dedicate Resources to Addressing Regulatory Changes

To keep up with the variable cadence of updates from different regulatory bodies, many organizations are turning to partners who can provide the intense focus and dedication needed to remain compliant. This added level of support allows for expert interpretation of new guidance and the efficient implementation of necessary changes across the payer organization. Collaborators with a core competency in medical content are most in demand because they not only keep plans current on a wide array of regulatory updates, but they also provide the expertise needed to identify and fill gaps around required documentation to judiciously maximize financial performance.

Educate Stakeholders on Updates and Supporting Documentation Requirements

From frontline physicians and in-house coders to third-party partners, every stakeholder should be aligned on the latest regulatory requirements to ensure efficient and compliant risk adjustment operations. Given how frequently regulatory requirements change, a commitment to continuous education, regular training, and ongoing support is vital to this effort.

In particular, in-house coders need to be kept up to date on the latest coding and documentation requirements from the government and provided with the most current resources. These professionals are not only charged with accurately interpreting and properly instituting new policies, but they also address ambiguity by making critical decisions and creating clarifying policy so all involved parties can operate consistently and compliantly.

Leverage Technology to Make Regulatory Resources Accessible

A single source of truth for regulatory and coding policies can help eliminate organization-wide discrepancies in how this critical information is applied. Developing a resource that’s digitally accessible to both internal and external stakeholders allows for more efficient operations with search functionality, the ability to quickly update guidelines, and a means for standardized communication of any changes. With the right technology in place, key personnel will not only have a lighter load, but can also rest assured knowing that their risk adjustment operations are up to the government’s latest standards.

Conclusion

In today’s environment of heightened regulatory scrutiny, health plans must proceed with caution. Forward-looking payers are acting now by evaluating their risk adjustment operations to identify existing vulnerabilities and inefficiencies. They are also recognizing the need for support to be successful and are increasingly turning to experts who can help streamline and strengthen risk adjustment programs with comprehensive services and cutting-edge technology.