Risk adjustment

The Affordable Care Act (ACA) established a risk adjustment program for all small group and Individual (commercial) members, regardless of whether they purchase coverage through an exchange or not. For Medicare Advantage members, the risk adjustment program began in 2000, and was implemented in phases, with implementation complete in 2007.

Risk adjustment is a method that government programs use to account for the risk profile of patients. A key element of risk adjustment is to ensure that the true health and related risk of a patient is captured. Accuracy of a patient’s condition(s) is key to being compliant in risk adjustment. The risk adjustment process for patients operates differently for commercial and Medicare members, but in general, much of the information required from providers and office staff is the same.

Providers

Providers play a critical role in helping to ensure the integrity of the data used in calculating the overall health risk of members by providing:

  • A comprehensive health status for each patient
  • Accurate and complete International Classification of Diseases (ICD) coding for every patient, every time
  • Medical record documentation that is accurate, complete and timely to support ICD coding to the highest level of specificity for claim submission

We are committed to improving quality of care through supporting the physician-patient relationship, and one way we do this is by encouraging our members to receive comprehensive annual health assessments that include identification of care opportunities and evaluation of disease burden.

Learn more about risk adjustment requirements and data validation audits in the Risk Adjustment section of the Administrative Manual.

Understanding your role in the process

Clinicians, administrators and office staff (e.g., medical coders and billers) all play unique and important roles in the risk adjustment process.

  • Clinicians are responsible for documenting patient encounters in the medical record.
  • Medical coders and office staff members are responsible for coding documentation in a member's medical record and submitting claims for encounters.
  • Administrators are responsible for engaging the process to operationalize improvements for clinical documentation and coding, as well as managing audits.

Best practices

Medical record reviews

We conduct regular reviews of medical records to validate that the diagnosis codes reported are accurate and supported in the medical record. Patient diagnoses do not carry forward from one year to the next under the risk adjustment models, which means that all existing and chronic conditions must be evaluated and documented in the medical record at least once each calendar year for each patient, and the corresponding diagnosis codes must be reported via the claim for services.

Similarly, in any given year, we may be selected for a Risk Adjustment Data Validation (RADV) audit by CMS and/or the U.S. Department of Health and Human Services (HHS), which requires us to provide medical record documentation to validate diagnoses sent for risk adjustment.

During medical record reviews and RADV audits, we (or a third party we have contracted with to perform a review) follow HIPAA guidelines 45 CFR 164.506(c)(4) while collecting and coding member information. It is not necessary for you to obtain a specific authorization from the patient to release these records. Your assistance and timely compliance with such requests enables us to meet our medical record review and collective RADV audit obligations.

Medical record reviews and audits underway

Medicare Advantage

  • May 2022: We will begin requesting and reviewing medical records to support the diagnosis data we submit to CMS for dates of service starting in 2021. We have partnered with the vendors Advantmed LLC and Episource LLC to assist us in the collection of medical records for Medicare members.

Commercial

  • June 2022: We will begin requesting and reviewing medical records to support an HHS-RADV audit for dates of service in 2021. We have partnered with the vendor Advantmed to assist us in the collection of medical records for this audit.

Risk adjustment education

We recommend that providers and their staff become familiar with resources to learn more about coding and risk adjustment. Some resources that may be beneficial for you include: