Book excerpt: Nuances of risk calculations

CDI Blog - Volume 14, Issue 54

by Ashley Vahey, BSN, RN, CCDS, and Deanne Wilk, BSN, RN, CCDS, CDIP, CCDS-O, CCS

The CMS hierarchical condition category (CMS-HCC) methodology recognizes specific combinations of diseases as well as the effect of disease processes as related to different settings of care. For example, in general, a patient who lives in the community will incur lower costs related to healthcare than someone institutionalized or in long-term care. CMS-HCCs includes formulas to capture the interactions between a variety of disease processes that have an exponential impact on a person’s health rather than just an additive impact.

CMS created the separate risk adjustment models because there are significant cost differences between community-based Medicare beneficiaries and long-term institutionalized beneficiaries with the same disease profile. Consider, for example, documentation that describes a patient who is disabled due to a history of cystic fibrosis. She resides at home and was diagnosed with rheumatoid arthritis and cystic fibrosis (as stated on her medical record). In this case, the CDI specialists would add up the scores based on these pieces of information: the disability, rheumatoid arthritis, and cystic fibrosis. These separate scores together provide the total risk score for this patient.

CMS expects Medicare Advantage (MA) organizations to ensure the accuracy and integrity of submitted risk adjustment data. All diagnosis codes submitted to CMS must be documented in the medical record, and coding must adhere to the ICD-10-CM Official Guidelines for Coding and Reporting.

The Office of Inspector General (OIG) continues to monitor the financial impact of health risk assessments and chart reviews on risk scores in MA. The OIG examines risk-adjusted Medicare Part C data to ensure that it supports the diagnoses MA organizations submitted to CMS for use in CMS’ risk score calculations and to determine whether the diagnoses submitted complied with federal requirements. In turn, the MA payers will look to providers and acute care organizations for documentation to support the risk adjustment data.

Payments to MA plan organizations are adjusted based on the health status of each beneficiary, so inaccurate diagnoses may cause CMS to pay MA plan organizations improper amounts. Prior OIG reviews have shown that medical record documentation does not always support the diagnoses submitted to CMS by MA organizations. For example, findings from a December 2019 OIG report show that CMS based an estimated $2.7 billion in risk-adjusted payments on chart review diagnoses that MA organizations didn’t link to specific services. These findings highlight concerns about the validity of payment data submitted to CMS.

When considering HCC methodology, what focus should CDI specialists have? The focus is no different than that of the traditional CDI role. CDI specialists should:

  • Educate providers to use the terminology that accurately reflects conditions being treated, evaluated, or monitored or that require diagnostics and increased nursing care.
  • Work with providers to document patient encounters so that the most appropriate ICD-10-CM codes can be assigned to support the most appropriate MS-DRGs, allowing for the most appropriate HCC risk adjustment.

Providers must understand the relationship between clinical documentation and code assignment. Documentation needs to clearly differentiate between acute and chronic conditions. Providers must be precise when using the term history of, limiting it to resolved and/or cured conditions that don’t currently require healthcare resources. They also need to support the relevance of a stable chronic condition by documenting what resources are being used to actively treat the condition.

Editor’s note: This article is an excerpt from the ACDIS book CDI and Quality Reporting: How Healthcare Record Review Can Improve Outcomes.

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Quality & Regulatory