Accurate Risk Coding is at the Heart of Efficient Value-Based Care Delivery

Dr. Poorva Singh
Wed 24 Aug 2022
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Risk coding, performed by physicians at the point of care, helps provide an estimation of future healthcare costs that a patient is expected to incur in a particular year on the basis of the illnesses the patient suffers from. This risk coding along with the patient’s demographic factors gives a combined risk score to the patient. It’s this score that determines the patient's risk cohort and the provider's expected insurance premium for managing their care. Research on Medicare Advantage (MA) shows that accurate risk coding can increase risk scores by 7-10% and has led to revenue increment to the tune of $12 billion in 2020 alone for MA plans and providers.

Hierarchical Condition Category, or HCC coding, is the most commonly used form of risk coding by Medicare and MA providers. It was introduced by the CMS in 2004 to supplement value-based payments and is linked to ICD-10-CM disease codes. Health plans and healthcare providers use algorithms to calculate a Risk Adjustment Factor (RAF) score using HCC codes. Since these measures reflect the complexity of a patient’s health needs and utilization in the near future, HCC codes and RAF scores are updated on an annual basis.

RAF score and why is it important for providers to ensure its accuracy?

The RAF score is a measure of the average healthcare utilization that a patient would need in a year and impacts the quality and cost metric adjustments for a physician's practice/provider. If risk scoring is inaccurate or incorrect, it can spuriously lead to a provider falling below its performance targets.

Therefore, in the value-based payment system, having up-to-date and accurate risk coding is extremely important to reflect the true complexity of a provider’s patient population.

Additionally, provider revenue is inextricably linked to appropriate risk adjustments for the covered patient population. Without the correct adjustments for risk, providers lose out on the opportunity to partake in shared savings. Hence, accurate risk coding has the potential to directly impact a provider’s quality and cost performance as well as its revenues.

Since the ACA came into effect, there has been a rapid growth in the number of patients covered by Medicare and Medicare Advantage plans. It has led to an expedited shift from a fee-for-service to a value-based-care system wherein provider revenues are linked not to patient volume but to care quality and cost performance benchmarks. Accurate risk coding has thus become even more important to drive performance and provider revenues to commensurate with the risk of the served population(s) and stratify them into meaningful risk cohorts to provide healthcare in the most impactful and resource-efficient manner.

Gaps in risk coding

Since risk coding can be done only by physicians at the point-of-care (PoC), there is a possibility that the physician may miss/drop a code during the patient encounter due to time constraints. Furthermore, HCC codes are not intuitive to physicians, are highly complex and frequently updated, and similar medical conditions may have different codes, resulting in highly variable risk scores. HCC codes may need to be added or modified at each subsequent patient visit to capture the most recent developments in the patient’s health. In some cases, this may not be possible and can lead to coding gaps if physicians are not provided with any assistance at PoC to ensure that no code is missed, dropped, removed incorrectly, and added appropriately.

Solutions to close risk coding gaps

Coding assistance to physicians can be provided by nursing personnel, care management teams, and computer-based solutions. Automated systems are the most reliable assistants to physicians in this scenario as they can be embedded directly into Electronic Medical Records (EMRs) and provide coding decision support to physicians at PoC. Innovaccer’s HCC Recapture Analytics solution seamlessly integrates with EMR and physician workflows to help physicians accurately capture pertinent HCC Codes at PoC.

Based on the patient's EMR and new clinical information added during the visit, this clinical intelligence solution uses sophisticated algorithms to suggest appropriate HCC codes. The physician can then make the best risk code selections during the patient visit itself and coders can collect supporting documentation that leads to a reduction in claim rejections. Care management teams review the coding again and the solution alerts them to any possible missed or dropped codes.

This multi-step system significantly increases coding accuracy saving up to 30% of time spent on coding. It reduces physician burden, freeing them up to do what they do best—provide the highest quality care to their patients.

Up-to-date and accurate risk coding is extremely important to reflect the true complexity of a provider’s patient population, but point-of-care coding and HCC complexities make it challenging for providers. Learn how Innovaccer’s HCC Recapture Analytics solution helps physicians perform accurate HCC coding at PoC without compromising the time spent on clinical care.


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Dr. Poorva Singh

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