Podiatry Coding & Billing Alert

Hint: Follow 4 handy risk adjustment rules.

If you are new to risk adjustment and not sure where to start, instructor Sheri Poe Bernard, CRC, CPC-I, CDEO, CCS-P, gave a high-level review of the topic in the 2021 RISKCON session “Risk Adjustment for Beginners.” Bernard identified what you should consider as you are learning about risk adjustment, as well as which diagnoses actually risk-adjust.

Keep reading to learn how to conquer risk adjustment in your practice.

Learn About Risk Adjustment, HCCs, ACOs

“Risk adjustment is a process by which health insurance plans are compensated based on the health status of the people they enroll, thereby protecting the insurer against losses due to high-risk, high-cost patients,” Bernard said. The payment is adjusted based on patient demographics such as age, disability, financial status, and institutional status. You report the diagnoses with ICD-10-CM codes.

“Under the Medicare Access and CHIP Reauthorization Act [MACRA], the merit-based incentive payment system [MIPS] looks at risk to determine severity of illness of patients,” Bernard added. “Efficiency is measured based on severity of illness versus resources extended across all sites.”

Hierarchical Condition Categories (HCCs): The severity of illness is HCC-based, Bernard said. HCCs are also ICD-10-CM-based so ICD coding compliance is paramount.

“You have to be sure that we are doing our ICD-10 coding correctly because if not, you could be overcoding, which leads to many problems,” Bernard said. Or you could be undercoding, which will hurt your practice because you may not receive deserved MIPS bonuses.

Affordable Care Organizations (ACOs): With ACOs, the shared savings are based on severity of illness and expenditures, according to Bernard. If a patient’s comorbidities do not result in increased utilization because they are being well-managed, for example, then the ACO providers share in the cost savings.

“Many Medicaid plans use risk adjustment to reimburse payers and federal disability. The chronic illness and disability payment system [CDPS] also employs risk adjustment for payers,” Bernard added.

Affordable Care Act: Also, risk pools established under the Affordable Care Act provide risk-adjusted coverage to members, Bernard said. The members pay premiums that go into a risk pool involving multiple layers.

“The HCCs associated with each plan’s members are calculated to determine how the monies are subdivided between plans: the sicker a plan’s patients and the more members insured, the bigger that plan’s piece of the pie,” according to Bernard. “More than 12 million Americans are enrolled in these plans. These are paid using Health and Human Services [HHS]-HCCs and include pediatric and obstetrical diagnoses.”

See Which Diagnoses Actually Risk Adjust

It’s easiest to consider what is chronic (such as chronic obstructive pulmonary disease — COPD); and acute, severe, and resource-intensive, such as hip fracture, pneumococcus, pneumonia, and acute myocardial infarction (AMI); when talking about risk adjustment, according to Bernard.

Remember that diagnoses are additive, Bernard said. The more risk-adjusting diagnoses, the more cumulative risk the patient carries, and the higher payment made to the Medicare Advantage Organization (MAO) insuring the patient or credit given to providers paid through risk adjustment.

Diagnoses are grouped into less than 90 HCCs, Bernard said. Not all diagnoses risk-adjust, but thousands do.

Some common risk-adjustable diagnoses include the following, according to Bernard:

• Diabetes
• Amputation status
• Skin ulcers
• Heart disease
• Vascular disease
• Hypertension
• Stroke
• Myocardial infarction
• Most cancers
• COPD
• Shock
• Septicemia
• Morbid obesity
• Hypothyroidism

Follow These 4 Risk Adjustment Rules to Stay Compliant

You can follow these risk adjustment rules in your practice.

Rule 1: Make sure you meet the Centers for Medicare & Medicaid Services’ (CMS’) documentation requirements such as the following:

• Signature: Records must contain a valid provider signature and credentials.
• Date: Each face-to-face date of service (DOS) stands alone for outpatient reporting.
• Patient name: Record must be for the correct member/patient.
• Acceptable encounter: Acceptable services should be billed and processed.

Rule 2: Make sure you code all active medical conditions for each patient encounter and DOS from acceptable document sources by acceptable provider types. You should use documentation only from providers who are treating the patient.

Unacceptable provider types include ambulance service providers, ambulatory surgery centers, anesthesiology assistants, independent diagnostic testing facilities, licensed practical nurses (LPNs), licensed vocational nurses (LVNs), mammography centers, medical assistants (MAs or CMAs), medical supply companies, nursing assistants (NAs or CANs), nutritionists, and radiologists.

Rule 3: Avoid unacceptable document sources. These include the following:

• Diagnosis related group (DRG) coding summaries
• Nursing notes
• All documents with DOS outside the data collection period
• Any document that was clearly not a face-to-face visit (with the exception of compliant telehealth encounters during the public health emergency)
• A diagnostic report that has not been interpreted, such as a lab report, radiology report, electrocardiogram (EKG), or Holter monitor report as standalone documents

Rule 4: Always be up to date on the ICD-10-CM codes and guidelines.