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February 14, 2018

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Medical Coding News Archives

Risk adjustment coding often short changes health plans and participating providers

September 19, 2016:

With more than one third of Medicare beneficiaries now enrolled in managed care plans (called Medicare Advantage plans), a substantial portion of Medicare program payments for the care of these beneficiaries are less than what they could be. The problem? Poor documentation and diagnostic coding.

In 2004, Medicare payments to its health plans adopted a payment formula that incorporates health plan member age and sex, plus the member’s medical condition, as expressed by the Hierarchical Condition Category (HCC classification system). HCCs are like DRGs but represent the member’s health status over a period of time. And, like DRGs, HCC groups have varying payment amounts that reflect the member’s severity of illness. Chronic conditions are a major influence on health; simply put, sicker individuals earn larger payments for the health plan. Unfortunately for the health plans, they are dependent upon the documentation and corresponding coding of medical conditions performed by the providers of care. Sloppy documentation by clinicians and poor or nonexistent coding mean low payments for the health plans and any provider groups who have agreements with the plans to share in the capitated monthly payments from Medicare.

Actuarial company Reden & Anders (now part of Optum) studied how consistently chronic medical conditions are addressed in the medical records of Medicare Advantage plan members. By definition, chronic conditions require long term evaluation and management. Surprisingly, after the first year, chronic conditions often vanish from the record in more than 80 percent of cases. In the third year, only about 10 percent of records continue to address the chronic condition, despite the fact that these conditions continue to have impact on the beneficiary’s health. What’s the reason behind the discrepancy? Because chronic conditions may not require surgery or procedural interventions, physicians often don’t address these conditions in their evaluation and management documentation.

One solution for improving evaluation and management coding is the Evaluation and Management Coding Advisor. Visit https://www.optum360coding.com/Product/46261/ for more information.


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