A recent study published by the Kaiser Family Foundation sheds light on a complex issue – how to determine the real or predicted cost of care for Medicare Advantage plan members when establishing RAF scores is based on the inexact science of provider documentation.
The study released this spring indicated that those who were enrolled in traditional Medicare in 2015 and switched to a Medicare Advantage plan in 2016 actually spent $1253 more once they made the transition. That may be because the current method of setting payments to Medicare Advantage plans is based on historic spending for all enrolled in traditional Medicare, rather than expected costs for Medicare Advantage members based on their historic use of services.
Excerpt from the study
“The study findings suggest that the current method of setting payments to Medicare Advantage plans based on spending for people in traditional Medicare may systematically overestimate expected costs of Medicare Advantage enrollees,” KFF said in a press release. “Adjusting payments to reflect Medicare Advantage enrollees’ prior use of health services could potentially lower total Medicare spending by billions of dollars annually.”
In the study, the research team applied an HCC risk adjustment model similar to that used by CMS, but critics of the findings claim the research may be flawed – primarily because the entire study is based on the assumption that the burden of illness in both populations is equivalent, when it appears – that very well may not be the case. Some believe that participants who choose to enroll in a Medicare Advantage plan may actually have lower health care costs.
Accurate HCC coding and risk adjustment models depend on a provider’s ability to report all diagnoses that impact the patient’s evaluation, care and treatment. Unfortunately, history has proven that providers tend to worry less about documenting diagnoses and more about documenting what they’ve actually done (ie procedures, treatments, diagnostic services, etc.) since that’s what the traditional Medicare fee-for-service model incentivizes and pays for.
In this case, calculating the correct RAF score could equate to billions of dollars in savings for Medicare, but that correct calculation can’t be done without validating the documentation itself.
One of the study’s critics, Kevin Mowll, executive director of The RISE Association, explains his theory on how inaccurate documentation and therefore, inaccurate risk adjustment could be at play in this research in an article published on risehealth.org
“[Therefore], The only logical conclusion is that the data capture was poor and inadequate. The only way to remedy this study’s flaw is to go the next step and conduct chart audits of all the patients on both sides to correct the RAF scores and run the analysis again with corrected risk adjustment calculations and projections.”
With Medicare Advantage plans covering approximately 30 percent of all Medicare beneficiaries, getting risk adjustment right is serious business. Chances are, if you’re reading this – you probably already know that. Need support with your risk adjustment program? GeBBS Healthcare solutions can help.
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