What is Risk Adjustment?
Risk Adjustment was created in order to appropriately pay Medicare Advantage Organizations (MAOs) for care provided to members based on the health status of the members. Diagnosis (ICD) codes are collected and tracked by their specificity in risk adjustment models to create a patient profile of severity by illnesses. Each member receives a risk score from the Centers for Medicare and Medicaid Services (CMS) based on diagnosis identified through submitted claims and encounter data.
Risk Adjustment is used to pay MAOs more accurately for the predicted health cost of members by adjusting payments based on demographic factors and presence of disease conditions.
What are Hierarchical Condition Categories (HCCs)?
HCCs are a hierarchy of condition categories that link to corresponding diagnosis categories. CMS determines the qualifying codes and assigns risk adjustment factors to HCCs. The number of HCCs and affected ICD-10- CM codes can change from year to year. Each year, CMS determines which diagnosis codes qualify for inclusion in the model, sets the number of HCCs, and assigns a risk adjustment factor to each HCC category.
Why is HCC Risk Adjustment important?
Risk adjustment score or diagnosis assigned to each member help Arizona Priority Care identify appropriate care management programs for the member, which can lead to more efficient, long term heath care management.
Therefore, reporting all diagnosis codes to their highest specificity is very important.
Why is medical record documentation so important for Risk Adjustment?
Medical record documentation plays a critical role in risk adjustment: accurate risk-adjusted payment relies on complete medical record documentation and diagnosis coding. CMS requires that all diagnosis codes reported for risk adjustment be based on clinical medical record documentation from a face-to-face encounter. This means the provider must document and report all diagnoses that affect the patient’s evaluation, care, and treatment, including chronic or co-existing conditions.
How can Arizona Priority Care help you?
Arizona Priority Care are dedicated to working with our providers to continuously improve the quality of our partnership. Arizona Priority Care provides a variety of services to best assist you and your individual needs. AZPC offers member chart reviews, clinical documentation education, peer-to-peer education, and annual education universities.
Questions or Comments?
Please feel free to contact Arizona Priority Care with any questions or comments regarding our efforts to ensure safe, quality care for our members.