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Latest CASE STUDIES
By AGS Health
April 4, 2023
Medicare adjusts payments to Medicare Advantage (MA) organizations for cost variations in providing healthcare to beneficiaries based on various risk factors, including health status. Risk adjustment aims to properly reimburse plans for the risk of the beneficiaries enrolled, including those with chronic conditions. The Centers for Medicare and Medicaid Services (CMS) uses the diagnosis codes submitted by MA plans for their enrollees’ medical conditions to determine enrollee risk scores
Risk-adjustment data validation (RADV) occurs after the final risk adjustment data submission deadline for the MA contract payment year. RADV safeguards risk-adjusted payment integrity and accuracy. CMS reviews medical records from the hospital (inpatient and outpatient) and physician providers to validate enrollee CMS-HCCs that were assigned based on risk adjustment diagnoses submitted by MA organizations for payment. As a basic risk-adjustment rule, all risk-adjustment diagnosis codes submitted by MA organizations must be supported by medical record documentation.
RADV has several critical objectives, including:
CMS determines which plans will be audited and which patients are included in the audit. The health plans must obtain all relevant medical records for the patients selected. An initial review of these medical records is performed to determine which contain documentation required to substantiate the HCCs that have been captured in the CMS system for these patients.
After the initial review, additional analysis is performed to determine the medical records that should be submitted to CMS to support the HCC values sampled. When CMS completes its secondary review and analysis, an error rate is determined, which is extrapolated to the premiums for the entire patient population for that health plan.
Extrapolation means that if an error is found during a RADV audit on a particular HCC, not only are the overpayments recouped on that member, but payment is recouped on all plan members who are in that HCC category.
Per the CMS RADV protocols, there are six stages in the RADV process:
In CMS RADV, CMS selects a random stratified sample of patients to audit. The sample is:
Only Part C HCCs are audited in RADV. The health plans must submit up to five of their best records from an acceptable treating provider, demonstrating those diagnoses as current in the year being audited that support the HCC values that were paid.
CMS conducts two types of RADV audits
CMS uses two main RADV types—Random and Targeted RADV
Random CMS RADV uses a selection process in which an MA plan is randomly selected for an audit
Targeted CMS RADV is applied to MA plans that have raised concerns, such as a significant increase in risk scores
With CMS proposing to expand the scope and scale of RADV audits to reduce payment errors, providers must ensure their documentation complies with the necessary standards. Adhering to the following documentation guidelines will promote compliance with CMS data validation requirements:
To ensure the integrity of the risk adjustment program, CMS, on behalf of HHS, performs risk-adjustment data validation, also known as HHS-RADV, to validate the accuracy of data submitted by issuers for risk-adjustment transfer calculations. HHS-RADV aims to promote confidence and stability in the budget-neutral transfer methodology used by the HHS-operated risk adjustment program by ensuring the integrity and quality of data provided by issuers.
Per the CMS RADV protocols, there are six steps to the RADV process:
HHS applies a sampling methodology to choose a statistically valid sample of enrollees based on each issuer’s enrollee-level risk score distribution. HHS designed the sampling methodology to ensure that the sample covers critical subpopulations of enrollees for each issuer by dividing each issuer’s population into 10 strata, representing different age and risk score bands, and sampling from each stratum.
AGS Health is more than a revenue cycle management company–we’re a strategic partner for growth. By blending technologies, services, and expert support, AGS Health partners with leading healthcare organizations across the US to deliver tailored solutions that solve the unique needs and challenges of each provider’s revenue cycle operations. The company leverages the latest advancements in automation, process excellence, security, and problem-solving through the use of technology and analytics–all made possible with college-educated, trained RCM experts. AGS Health employs more than 10,000 team members globally and partners with more than 100 clients across a variety of care settings, specialties, and billing systems.
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