Risk adjustment is an essential part of many US health plans, including Medicare Advantage and services provided through the Affordable Care Act (ACA). But given the complex process involved, some healthcare organizations still lack a comprehensive understanding of the subject.
This article solves that problem, providing a clear overview of healthcare risk adjustment – along with clear guidance to help providers avoid missing out on insurance reimbursements.
Risk adjustment is a process used to modify insurance payouts based on the healthcare costs of a given patient.
It uses the individual’s health status and demographic factors to predict future care requirements, comparing these requirements to the plan’s average to enable accurate and fair adjustments.
The standard risk adjustment process follows a few key steps:
Risk adjustment was created to solve a serious problem with health insurance: the wild variability between different patients’ care costs. Faced with two prospective patients, the rational business decision for an insurance provider would be to select the patient with the lower expected costs – as this would reduce the amount they are required to pay the provider.
The net result? Patients with higher-than-average care costs would be systematically disadvantaged, with fewer insurers willing to accept them onto their health plans. This has clear ethical implications, which is why the Centers for Medicare and Medicaid Services (CMS) introduced risk adjustment.
Risk adjustment protects insurers from losses by adjusting health plan premiums to reflect the true cost of care. As a result, it benefits all parties:
All of which means risk adjustment ultimately contributes to a more equitable and ethical medical insurance system. For instance, medical insurance plans can offer high-risk patients complimentary workout program memberships and assign case managers for specific diseases. This means that your patients will also be more engaged with their health because they have the necessary support.
When your patient’s health status is combined with other demographic factors and wellness considerations, it’s easier to figure out the most effective action plan for comprehensive treatment. As a provider, risk adjustment enables you to do accurate reporting of your patient’s condition and recommend an appropriate treatment plan.
Risk adjustment also improves medical reporting, making patients more aware of their conditions and healthcare options, which increases their engagement with their healthcare providers.
Accurate HCC coding is essential to enable effective risk adjustment and enable optimal patient care. But most providers are already overworked without adding complex medical coding to their workflow – which is why so many providers rely on HCC Assistant.
HCC Assistant is a software tool that uses natural language processing (NLP) to ingest and analyze large volumes of structured and unstructured medical data. It then produces HCC coding recommendations at the point of care with 98% accuracy.
Want to explore how this could take the weight off your providers’ shoulders – and make risk adjustment far more accurate?
References:
https://www.cms.gov/priorities/innovation/key-concepts/risk-adjustment
https://www.aapc.com/resources/what-is-risk-adjustment
