Risk Adjustment Phase-In Nears Completion In 1998, the Centers for Medicare & Medicaid Services (CMS) began implementing a new reimbursement model for Medicare+Choice organizations (now known as Medicare Advantage). This change, called risk adjustment, signaled a shift from demographic-based reimbursement to reimbursement based on the health status of the individual. Ultimately, health plans will be reimbursed less for healthy beneficiaries and more for those who are sick. The original risk adjustment model was based on the submission of inpatient claims. Beginning with 2004 payments, CMS began a gradual phase-in of the Hierarchy Condition Category (HCC) model, which is based on diagnosis codes for inpatient, outpatient and physician claims. Now, the completion of the phase-in schedule is right around the corner; the implementation will be complete in the next two years. Currently, payments for 2005 are being phased in at a 50/50 rate, with 50 percent of the payment amount based on the demographic rate and 50 percent at the risk adjustment rate. Beginning with the January 2006 payment, risk adjustment will account for 75 percent of the Medicare reimbursement. For the January 2007 payment and all payments thereafter, risk adjustment will be 100 percent of the Medicare reimbursement. This means the proper use of ICD-9-CM codes is more important than ever. Humana’s Medicare reimbursements from CMS and physicians’ reimbursement from Humana depend on the proper submission of Medicare encounters/claims. In addition to proper reimbursement, accurate recording of health-related data augments further possibilities for education and clinical care research. Remember that it is critical to code to the highest level of specificity and to record all diagnoses in the medical record. Also, the diagnosis code(s) must be supported in the medical record and documented according to Medicare guidelines. CMS is performing audits on data submitted. Proper documentation also means informing Humana of any overreporting that may have occurred. If you identify any overreporting of diagnosis codes, it is important to report this data to Humana so that the data in Humana’s systems and CMS’ systems can be corrected. Humana has a number of resources available to help physicians understand and implement the HCC coding model. For more information, visit the Humana Web site at www.humana.com. On the home page, click on “Providers,” then click on “Provider Resource Center.” Then choose “Health Plans and Products” from the left side of the page. Scroll down and click on the “Medicare Advantage” link. Enter your ZIP code, and then select the appropriate Medicare Advantage plan from the menu. The page that follows includes links to more information on the CMS-HCC Medicare risk adjustment model and to a free MRA ICD-9-CM coding tool that can be downloaded to a personal computer or personal digital assistant (PDA). The following Web sites also provide more information
about risk adjustment: http://mcoservice.com/new/usergroup/traininginfo.html www.ahima.org/infocenter/guidelines/standards.cfm Talk to your administrative staff and clinicians about the continued importance of ICD-9-CM diagnosis coding, coding according to proper guidelines and proper medical record documentation, and ensure that they understand which dates of service affect which payment periods. |
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