Operating a revenue management program in the Medicare Advantage (MA), Affordable Care Act (ACA) and/or Medicaid markets requires a concerted focus and effort on achieving complete, accurate and compliant risk documentation and scores. That third component—compliance—is often overlooked by health plans, at least until faced with a Risk Adjustment Data Validation (RADV) audit.

However, various government organizations—including the Centers for Medicare and Medicaid Services (CMS), the Department of Justice (DOJ) and the Office of the Inspector General (OIG)—are cracking down on potentially noncompliant risk adjustment practices by health plans, especially Medicare Advantage organizations (MAOs), as many have established operations solely focused on upside coding improvement without the proper compliance checks in place to ensure documentation accuracy and prevent overcoding. The need for proactive review of and oversight into issues in coding and submission processes is more critical now than ever before.

What Operational Practices Pose the Greatest Compliance Risk?

Over the past few years, there have been multiple lawsuits and claims by whistleblowers and regulatory agencies that health plans and providers have acted with ill intent to inflate risk scores. Many others have been negatively impacted financially due to poor RADV audit results. Some examples include:

• Failing to delete unsubstantiated diagnoses when performing chart reviews. One-way chart reviews focused only on “adds” have drawn significant attention from regulators. From the Swoben case against United Healthcare a few years ago that was ultimately dismissed, to a recent DOJ lawsuit against another national MAO, the chart review coding practices of MAOs will continue to be scrutinized by CMS and through RADV audits.

• Linked versus unlinked supplemental submission practices. Per the OIG study, “diagnoses that MAOs reported only on unlinked chart reviews (i.e., those that add diagnoses to the encounter data without identifying the specific item or service associated with the diagnoses) generated an estimated $2.7 billion in risk-adjusted payments for 2017.” Unlinked charts can present significant RADV risk to plans, especially in cases where an unlinked chart review is the only substantiation for a captured Hierarchical Condition Category (HCC). For more insight into the OIG report, read this article from Gorman Health Group.

• Filtering practices for Risk Adjustment Processing System (RAPS) submissions. Though RAPS is being phased out, CMS’ submission guidance has generated some ambiguity as to what constitutes a face-to-face visit, resulting in many MAOs potentially misreporting encounters (both over- and under-reporting).

• Provider coding practices. The coding practices of providers, and the significant risk posed by upcoding practices, presents RADV exposure for health plans while also introducing potential litigation risk for providers.

How to Proactively Mitigate Risk

Health plans operating in risk-adjusted markets should take proactive measures to improve the accuracy of documented risk to reduce RADV exposure, or worse, potential litigation. Here’s what health plans can do:

• Review coding guidelines and operations. Whether coding is performed in-house, outsourced or both, plans should periodically review internal coding guidelines to ensure compliance and accuracy. This starts with confirming that comprehensive coding is being performed, meaning coders are reviewing the entire chart and documenting conditions that are substantiated, not exclusively looking for gap conditions. (This applies to both first- and second-pass chart review practices). Second, confirm that unsubstantiated codes are being deleted from RAPS and Encounter Data System (EDS) submissions. And finally, confirm that the coding guidelines are accurate, up to date and executed consistently across all coders.

• Proactively mitigate risk through advanced analytics. Augmenting chart chase sweeps to also target conditions reported on claims with a high likelihood of not being substantiated (if audited) is a proactive means of reducing audit risk. By analyzing a multitude of factors, including a member’s demographics, clinical history, coding frequency, place of care, provider specialty and other factors, plans can proactively identify potentially unsubstantiated risk and correct encounter submissions, improving reporting accuracy and reducing audit risk.

• Evaluate encounter reporting practices and results. Government reporting practices—whether it’s RAPS, EDS, EDGE server or State Medicaid submissions—are complex and present multiple opportunities for error. In Pareto’s experience, challenges in risk reporting result in a 0.8%-1.2% reduction in overall risk scores, on average, presenting a material financial opportunity for plans to improve in-year performance. Pareto has also uncovered multiple instances of plans unintentionally reporting encounters and diagnoses that are likely not to be substantiated. From inaccurate RAPS filtering logic, to misapplied reference tables or potentially overly relaxed supplemental record linking, to claims practices, each of these mistakes present a risk of RADV exposure, or even worse, litigation under the False Claims Act.

• Conduct continuous provider coaching and education. Using a combination of analytics paired with clinical coding expertise to deliver tailored, patient-centric coaching based on a medical practice’s or provider’s patient panel is the best means of driving positive behavioral change. Provider documentation coaching programs, like all aspects of risk adjustment, should be bidirectional—meaning it addresses both under- and over-coding practices to improve coding accuracy and compliance.

Compliance Can’t Be Ignored

While CMS has postponed and delayed RADV audits indefinitely due to the COVID-19 pandemic, health plans should not use this as a reason to deemphasize risk adjustment compliance. Use the temporary relief—as much as you can, given the current environment—as a chance to conduct a risk documentation compliance evaluation or mock audit, which can positively impact in-year performance, and based on the results, establish compliant risk documentation and coding practices for improvement in the long term.

For help ensuring complete, accurate and compliant risk documentation and scores, contact us for an initial opportunity assessment.