Rethinking Risk Adjustment

Last Updated: Feb 22, 2024

Stay out of harm’s way when it comes to risk adjustment compliance.  Granite GRC Consulting presents a series of monthly articles for the Pennsylvania Medical Society’s DOSE newsletter. This is the first in the series.

Risk adjustment (RA), also known as value-based care (VBC), seems to have reached a tipping point in US healthcare: Medicare Advantage accounts for more than 50 percent of Medicare enrollments, most state Medicaid plans (including Pennsylvania), and some employment plans have all migrated RA for determining proper payments. All told, more than 1 in 3 patients with any private or public insurance in the US are enrolled in some form of RA plan.

It's not a revolution: RA has been around 25 years and is as old as the search engine, Google. So why has RA only come to the attention of Pennsylvania providers recently? It’s because CMS has begun noticing discrepancies in claims involving risk adjustment, and as a result has stepped up its enforcement.

Physicians, coders, and insurers can take many actions to protect their practices from negative findings in an RA audit. Providers must document with clarity and completeness, as coders and auditors cannot connect the dots between observation and diagnosis. For example, a patient who three months ago was determined to have an eGFR of 14 and today the eGFR measures 12. This patient almost certainly has end-stage renal disease (ESRD). However, only a clinician can make that judgment: A diagnosis must be documented to be coded because only an acceptable provider can ascribe diagnoses to patients.

Clinicians and coders must understand the building blocks of documentation and coding of diagnoses as found in ICD-10-CM and the E/M Documentation Guidelines.  Though the E/M guidelines were created to help with documentation and coding of services (CPT), they align in many cases with the ICD-10-CM diagnostic coding guidelines and requirements of RA. For example:

E/M guideline: “Comorbidities/underlying diseases or other factors that increase the complexity of medical decision making by increasing the risk of complications, morbidity, and/or mortality should be documented.” (1997 Documentation Guidelines for Evaluation and Management Services, page 20)

ICD-10-CM guideline: “Code all documented conditions that coexist at the time of the encounter/visit and that require or affect patient care, treatment or management.” (2024 ICD-10-CM Guidelines to Coding and Reporting IV.J.)

It’s not enough to consider comorbidities when evaluating a patient. Link comorbidities and chief complaints in documentation to achieve the correct E/M leveling and diagnostic coding to ensure the complexity of the encounter is captured (“The patient was informed that the short course of steroids for her COPD exacerbation may cause elevations in her blood sugar, and she agreed to test more frequently and drink more fluids so that her diabetes is somewhat controlled during her recovery.”)

There are simple habits that advance documentation so that these relationships are captured naturally in medical documentation. These will be explored in next month’s DOSE newsletter.

Granite GRC can help navigate your toughest risk adjustment challenges.  Contact Sheri at spb@granitegrcconsulting.com or call (717) 556-1090 to learn more.