Trying to Navigate Risk Adjustment Challenges in MA? Use These Tips.
As predicted in ZeOmega’s risk adjustment blog series earlier this year, Medicare Advantage Organizations (MAOs) across the country are facing increased scrutiny of their claims and documentation. A series of audits by the HHS Office of Inspector General (OIG) in industry headlines highlight common Risk Adjustment Data Validation (RADV) compliance findings, resulting in hefty financial penalties. This blog provides an overview of key OIG findings, tips for Medicare Advantage organizations to avoid similar pitfalls, and what to expect in 2024 with the updated risk adjustment model.
Background
The OIG regularly conducts audits to identify improper Medicare payments. Recent examples include reviews of ambulance transport claims in Connecticut, Pennsylvania, and Illinois as well as home health services in Florida. These audits found between $1.2 million to over $4 million in inappropriate Medicare reimbursements due to a lack of medical necessity documentation and billing for non-covered services.
Major Medicare Advantage payers like Humana, UHC, and CVS are facing severe fines due to the Centers for Medicare and Medicaid Services’ (CMS) audit extrapolation policy. Researchers at the University of Southern California report an estimate that risk adjustment overpayments could reach $75 billion for 2023. With Medicare spending over $800 billion annually and the known gamification of risk adjustment, there are clear incentives for the federal government to continue cracking down on RADV violations.
Plans found to have inappropriate overpayments may need to refund the government, cutting into their reported quarterly earnings. The OIG can also impose Civil Money Penalties and exclude organizations with fraudulent activities. This makes compliance a top priority for MA plans to avoid financial consequences and reputational damage.
Tips for RADV Compliance
- Educate staff and providers on Medicare coverage rules and documentation needs. Understand the RADV guidelines, and be sure all submitted diagnoses align with Monitor, Evaluate, Address, and Treatment – or M.E.A.T. criteria.
- Conduct internal mock-RADV claim audits to identify documentation gaps or inappropriate billing before submitting to Medicare.
- Implement technology solutions to reconcile known chronic conditions year-over-year and be careful with suspecting practices.
- Keep detailed documentation of compliance activities. If audited, the OIG will assess your organizational compliance efforts.
With proper precautions, MA organizations can successfully navigate regulatory complexities while continuing to provide quality services to Medicare beneficiaries. Proactively addressing potential issues positions plans to withstand regulatory scrutiny.
Spotlight on Diabetes Updates in V28
As of 2021, the Centers for Disease Control and Prevention (CDC) report that one in five Medicare beneficiaries is diagnosed with Diabetes. MAOs have historically put particular emphasis on capturing this chronic condition along with its known complications, typically placing the Diabetes condition category among the top three most submitted to CMS for reimbursement.
Changes to ICD-10 mappings as well as condition category constraints in the updated V28 risk adjustment model are significant. CMS says the updates, “limit the sensitivity of the model to coding variation, thereby maintaining the integrity of the condition categories in the model and their ability to accurately predict costs.” The updated V28 model will be phased in over the next three years, meaning MAOs will need to keep their eye on both V24 and V28 to ensure payment accuracy.
The key changes to diabetes-related conditions from the V24 to V28 risk adjustment models that will financially impact Medicare Advantage plans are:
- Uncontrolled Type 2 Diabetes Mellitus: This condition has a reduced risk score weight in V28 compared to V24. Plans can expect lower revenue for members with uncontrolled diabetes.
- Diabetes with Ophthalmic Manifestations: The V28 model removes the hierarchical relationship, so this condition can now be coded with diabetes itself. This should increase risk scores for diabetic members with eye complications.
- Diabetes with Hypertension: This condition is no longer part of the renal manifestation group in V28, so plans will need to separately submit codes for hypertension and associated manifestations. This may result in higher risk scores if both conditions are properly captured.
- Diabetes with Peripheral Angiopathy: This condition is newly risk adjusted as a manifestation in V28, which presents an opportunity for revenue gains with proper diagnosis coding.
- Diabetes with Skin Complications: This condition is also newly risk adjusted in V28, giving plans another chance to identify documentation opportunities and improve risk scores.
Overall, the diabetes changes present a mixed picture. Plans will need to weigh revenue declines from the uncontrolled diabetes changes against potential gains from new manifestations in V28. Targeting coding for conditions like ophthalmic, peripheral, and skin manifestations will be key to offsetting losses. Proactively analyzing historic diagnostic patterns and identifying documentation gaps will help plans adapt to the V28 model changes.
Tips for V28 Success
The latest V28 model will take effect for payment year 2024, creating implications for revenue.
To minimize financial impacts, health plans should take the following steps:
- Analyze the V28 model changes and identify codes that will be newly risk adjusted or have different weights. Focus on capturing any new conditions that will positively impact scores.
- Review outreach materials and update them to reflect coding changes. Ensure providers are informed about new diagnosis documentation requirements.
- Assess historical risk scores to project revenue fluctuations from the updated model. Identify areas of opportunity or potential gaps.
- Have coders undertake additional training on V28 changes ensuring they are confident in the appropriate capture of new diagnosis codes in 2023 reviews to support accurate 2024 risk scores.
- Evaluate data sources and analytics. Supplement claims data with other sources like labs or ADT feeds to get a comprehensive view of member risk profiles.
The V28 model shifts will likely lead to risk score declines industry wide. Proactive planning and early engagement of providers and coders will be critical to mitigating negative financial impacts.
In navigating the uncertainties of 2024, MAOs may perceive uncharted financial risks. However, sustained success is within reach. As CMS steadfastly safeguards the future of Medicare Advantage, agile teams armed with specialized knowledge, optimal tools and processes, and an unwavering commitment to delivering superior care can expect to achieve stability by 2025.
Want to position your organization for success in 2024? Contact ZeOmega to learn more.
