What’s your ICD-10 Strategy for Medicare Risk Adjustment?

Be careful, an iceberg may be ahead.

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Medicare risk adjustment adds a layer of complexity for Medicare Advantage plans of all sizes.  Over the last decade plans have grasped to come up with strategies to manage risk adjustment and ensure the appropriate diagnosis codes for acute and chronic conditions were being submitted to CMS.  Plans that were able to do this successfully excelled with the Medicare Advantage product, where plans that didn’t fully grapple what MRA meant to them were often times left in the dust.  At a plan size of 10,000 lives with an average premium of $750.00 per beneficiary, each .1 on the risk adjustment factor score represents roughly $9,000,000 providing an incentive for plans to figure out how this risk adjustment process works.

 

After having ample time to get a handle on MRA an iceberg is ahead with the change from ICD-9 to ICD-10 since it will drastically impact any analytics or coding efforts that Medicare Advantage plans have put into place.  Plans that have implemented custom solutions need to think about how ICD-10 will impact their analytics and coding efforts, and what changes need to be made this year to ensure they are positioned for success on October 1st.  There are some key things issues health plans and providers need to be aware of:

 

You will need a way to manage ICD-9 and ICD-10 codes concurrently this year.
A major MRA strategy focuses on ensuring chronic HCC’s are captured year over year.  Any automated tools will need to be able to roll up ICD-10 codes to HCC’s during 4th quarter and compare them against the previous plan year.  Since the last quarter is often a race to close coding gaps, you should plan ahead to ensure your analytics tools are ready to roll.

 

Providers that are used to ICD-9 codes will likely not be ready for ICD-10 codes.
In the fee-for-service environment that the majority of smaller provider groups still operate in, they may not have put thought into which ICD-10 codes account for which HCC’s.  Specific to the HCC model, ICD-10 more than doubles the number of codes that plans and providers will be working with going from 3,159 to 8,772.  Providers should be informed of what ICD-9 codes crosswalk to ICD-10 codes well in advance of the October 1st to ensure that they are up to speed on how to close out the remainder of the year.

 

You will need to keep a close eye on HCC recoding in 2015.
Once ICD-10 rolls out, it is likely that there will be many initiatives to protect revenue across various parts of an organization.  If you are responsible for MRA you will want to make sure you have the appropriate resources ready in 2015 to identify any major changes in HCC patterns that impact revenue for the plan.  Staff involved in HCC coding efforts should also be trained on what to look out for once the transition ICD-10 takes place.

 

If any of these points raise a red flag for you, there are many vendors out there, including Get It Analytics, that can help you be successful with the impact ICD-10 may have on risk adjustment efforts.  Our product is ICD-10 ready and provides a seamless transition come October 1st.