Risk Adjustment Tools

Of the many data entry tools developed by Tecks for use in the health care sector are tools used for risk adjustment, quality management, and ultimately, for reimbursements from the Centers for Medicare & Medicaid Service (CMS).

Of the many data entry tools developed by Tecks for use in the health care sector are tools used for risk adjustment, quality management, and ultimately, for reimbursements from the Centers for Medicare & Medicaid Service (CMS). Tecks has designed, developed and implemented tools used by Clinical Auditing teams to capture member/patient diagnosis information by entering disease classification codes (ICD-9 and 10 codes) and perform Quality Analysis of charts that have been Data Entered.  The ICD codes are classified into Condition Categories (CC), which are further aggregated into Hierarchical Condition Categories (HCC), and combined with age, sex and Medicare disability status. Once the ICD codes have been entered, the description, HCC, and RxHCC scores (described below) associated with the codes are then automatically populated. This information is in turn used by the Health Plan and Insurance companies to gain  reimbursement through Medicaid/Medicare.

With ICD-10 going into effect on October 1, 2015, Tecks has long experience in working with crosswalks to convert most frequently used ICD-9 codes into their ICD-10 equivalents.

Risk Adjustment and CMS Reimbursement

In 2006, CMS began offering an outpatient prescription drug benefit under the Part D program. For these individuals, Medicare pays a prospective payment for each Part D beneficiary adjusted for each enrollee’s disease burden. This burden is determined by a risk score approach.

Historically, the approach used by CMS to assess a risk score started with the use of basic demographic data (i.e. age and sex). It then evolved to the PIDCG approach (Primary Inpatient Diagnostic Cost Groups), which used only impatient information; then to the HCC approach (Hierarchical Condition Categories), which includes both inpatient and outpatient diagnostic information; and now to the RxHCC approach (Prescription Drug Hierarchical Condition Categories), which further includes prescription drug use.

Medicare uses the risk adjustment score to more fairly compensate plan providers for the expected costs of their enrollees. If the risk adjustment is too low, there is a strong financial incentive for plan providers to select healthier, lower cost beneficiaries and avoid sicker, higher cost beneficiaries, or restrict access to more expensive drugs, increase costs to patients, or leave the Part D program entirely, which would reduce patient options for care. RxHCC scores are scaled so that the average total risk score across the population of beneficiaries is 1.0 — in other words, an individual with a total risk score greater than 1.0 is expected to have higher annual drug expenditure relative to the average beneficiary. For beneficiaries with higher scores, CMS increases the direct subsidy payments made for these individuals accordingly. Hence, for plan providers, it is very important to obtain an accurate RxHCC score to secure proper CMS reimbursement. This is where Lattice Group's work comes in.