Risk Adjustment

How Payers Can Improve Risk Adjustment using a FHIR-enabled Data Activation Platform

Sandeep Gupta
Mon 20 July 2020
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Fee-for-service is one of the biggest reasons why the cost of healthcare is almost 20 percent of the country’s GDP.  Despite the high expenditure, the quality of care is still unsatisfactory. U.S. healthcare ranks at or near the bottom in almost every measure of comparative quality among other developed nations. As a result, payers are making a transition to Alternative Payment Models (APMs). The traditional payment models don’t have provisions to provide education on self-management or patient outreach to prevent emergency visits. In addition, payers receive more insurance claims for additional services when emergency episodes occur. APMs on the other hand eliminate most obstacles in the way of care coordination. In these arrangements, providers receive payments for a bundle of services for each patient. The primary focus of these models is to assign payments for patient recovery and not the number of services rendered.

The payers who switch to APMs need a mechanism to adjust the payments for members who need more services. With risk adjustment, they can assess the health status and expected costs incurred by each member. Risk adjustment can correctly project the patient’s health profile and need for services that can ultimately help in achieving improved health outcomes in a cost-effective manner.

Need for timely access to accurate patient data

Timely access to accurate data is critical in the process of risk adjustment. Its absence can lead to penalties resulting from errors in encounter data submissions, infrequent, or inadequate reporting. The consequence of improper data submission could mean failing audits, repaying the Centers for Medicare and Medicaid Services (CMS) and even legal implications. 

In January 2020, CMS released an advance notice that signaled increased use of encounter data in calculating Medicare Advantage payments. Recently, CMS also expanded the supplemental benefits to chronically ill Medicare enrollees under the Bipartisan Budget Act. Now, Medicare Advantage organizations need to consider non-clinical data as well while ascertaining risk-adjusted payments for chronically ill members. To fulfill these CMS proposals and the others to come, payers not only need accessible, accurate data but a holistic data repository to manage risk-adjustment and reporting. 

Risk adjustment strategies built on comprehensive data can also provide support in care coordination, chronic disease management, population health management, value-based contracting and social determinants of health (SDoH) programs. 

Challenges in building a holistic data repository

Access to key data on enrollees’ health conditions is paramount for risk adjustment to work. Clinical data contains the most important details about patient health and risk that simply can’t be obtained from claims data alone. However, there are several obstacles:

  • Healthcare data comes in from various sources, and to collect, incorporate, and document patient data from EHRs to wearable trackers is a costly and time-consuming process. It’s important that physicians and health coaches are able to document patient data on the job, to maintain consistency in documentation.
  • The storage of data, integration of data sets, retrieval, and use of data are only a few of the subsequent challenges that are not covered by the infrastructure health plans manage. Also in later stages, data sharing becomes a challenge as interoperability between disparate systems is yet to be realized.
  • The majority of clinical data is unstructured, and no meaning can be derived out of it without advanced analytics. 

Improving risk-adjusted payments with a FHIR-enabled Data Activation Platform

Leveraging a FHIR-enabled Data Activation Platform payers can access and integrate data from disparate sources and apply analytics to impact the bottom line of a health plan, improve population health management and help make informed decisions about premium pricing, membership expansion, bid rate calculation, etc. It also provides real-time feeds on patients to providers and assists them in identifying complications, co-morbidities, medications, etc.

It can help payers in identifying missed diagnosis codes or potential down-coding to analyze the tangible impact on revenue and risk-adjusted savings. It streamlines the data documentation process using built-in analytics and risk coding with flexible and automated workflows. In addition, it can help healthcare networks justify admission and treatment, accurately reflect the severity of medical conditions and accurately assess their risk which, in turn, will be instrumental in generating better financial outcomes. 

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Risk adjustment process through Innovaccer’s FHIR-enabled Data Activation Platform

Identify missed codes

Innovaccer’sFHIR-enabled Data Activation Platform helps payers integrate clinical and claims records and identify missed codes by accurately mapping the patient activities across the network. 

Prioritize patients with high risk

The platform estimates the potential downcoding impact so that payers can encourage their provider networks to prioritize high-risk patients. 

Accurate risk computation

The FHIR-enabled Data Activation Platform, along with its analytics module, calculates and adjusts risk scores by using customized risk scoring methods combined with HCCs to increase accuracy.

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Point-of-care support to physicians

Innovaccer’s FHIR-enabled Data Activation Platform notifies physicians about diagnosis codes that were dropped from prior records and suggestions for more specific codes to improve reimbursement.

Automated workflows

The platform creates efficient and automated workflows for providers with the list of all the patients that have been miscoded or need attention across all payers.

Dashboards and tracking

The platform offers extensive, user-friendly dashboards to track missed codes, verify the accuracy of filled entries, and gain a visibility on shared savings opportunities and the overall return on investment.

The road ahead

Correct implementation of risk adjustment is central to achieving high-quality care. With the growing importance of value in care, the challenges in implementing a broad risk-adjustment framework should be countered to provide physicians the right reimbursements and provide high-need patients with adequate care. Regardless of changes in administration and patient population, there is one common belief that stays true – complete, accurate, and value-based care. 

To learn how to improve risk adjustment with the industry’s most comprehensive Healthcare Data Platform for payers, click here.

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