By Chris Rigsby, SVP Payer Solutions
In an ideal world, risk adjustment begins with quality patient care. Patients actively participate in routine wellness visits and can easily access the healthcare services they need. Providers have plenty of time and energy for every patient they assess. Documentation is consistently captured during every visit, offering a complete and accurate picture of a patient’s health.
Unfortunately, the ideal is not translating to reality. Providers are overwhelmed, not just with heavy patient loads but with the administrative burdens required to facilitate risk adjustment, as well as the operational integrity of their organizations. Too often, payers are not receiving the information they need to assign accurate risk scores for proper reimbursement.
Top-down approaches to risk adjustment don’t work. To improve risk score accuracy and, ultimately, competitive advantage in the market, health plans need to start empowering providers.
The Importance of Provider-Payer Collaboration
Payer-provider collaboration is not novel, particularly under value-based care models, which link revenue with risk scores and patient outcomes. But, the disconnected agendas of the past are still defining interactions in the present: Decades of operating within a system that pitted the financial interests of providers against payers’ have resulted in a legacy of distrust.
When it comes to risk adjustment, payers have the opportunity to extend an olive branch — and they have strong incentive to do so.
4 Strategies for Empowering Providers
By leveraging their resources to empower providers, health plans can optimize the essential functions that feed into risk adjustment — while also building trust and fostering collaboration.
Below, we highlight four key strategies that payers can implement to achieve this, including:
- Improving compliant financial incentives for providers
- Tailoring prospective risk adjustment programs to existing provider workflows
- Educating providers on the impact of HCC coding on patient outcomes
- Standardizing risk adjustment programs across payers in the market
Improving Financial Incentives
In 2021, J.D. Power surveyed approximately 35,000 members of 147 health plans. They found that 37 percent of respondents — and 44 percent of respondents aged 57 and older — reported no engagement with their health plan at all.
If payers want to get members in for comprehensive wellness assessments, they need providers’ help.
Payers may hold the purse strings, but it’s providers who build relationships and trust with their patients through regular interaction; they embody the essential human element of quality care delivery.
Currently, providers have very little incentive to facilitate risk adjustment activities. Understaffing makes proactive patient outreach difficult. Most patient visits are episodic; even when providers follow best practices, overall health assessment — especially chronic illnesses — might not be reflected in clinical documentation. Clinical documentation itself is a heavy administrative burden. And, notably, payouts for wellness visits don’t offset the time and effort required to maximize these encounters.
The solution is simple: Payers need to fund innovations that allow providers to structure routine delivery of care more efficiently.
By improving financial incentives and aligning them with risk adjustment activities, payers can motivate provider engagement — which, in turn, enhances member engagement. These incentives empower providers with the resources they need to make wellness visits a standard part of care and comprehensive documentation a standard practice for every patient encounter, episodic or otherwise. In return, payers can rely on receiving the accurate, up-to-date health data that is essential for risk adjustment.
Implementing Prospective Risk Adjustment Programs
Prospective risk adjustment is inherently proactive — and collaborative. Payers develop a list of diagnosis gaps based on known and suspected chronic conditions. Providers are informed of these gaps, which they assess, prioritize, and address during patient encounters. Clinical coders document those conditions in claims, which factor into member risk scores.
Developing and implementing these programs cooperatively — in a way that accounts for providers’ preferred workflows — can be a herculean effort. But, the benefits are substantial.
It is often payers, not providers, who are able to capture more comprehensive clinical data for patients. By equipping clinicians with this data, payers can empower providers by surfacing potential health issues earlier, supporting informed treatment decisions and ensuring better patient outcomes.
This approach also facilitates more accurate coding practices. When CMS updates its requirements for risk adjustment programs, payer organizations can lean into cooperative, prospective strategies to stay ahead of any changes and ensure compliance.
For payers, the advantages are clear. After identifying patients who may be at risk for chronic conditions, payers can work with providers to engage members who could benefit from specific health and wellness resources or care management programs. Such initiatives anticipate care needs to improve member health and optimize risk adjustment to ensure accurate reimbursement.
Educating Providers on HCC Coding
To implement initiatives like prospective risk adjustment, payers must first ensure providers understand the relationship between clinical documentation, HCC coding, and reimbursement.
HCC coding is used to estimate future costs for the care of Medicare Advantage, commercial ACA, and managed Medicaid populations. This structure, combined with the Medical Loss Ratio (MLR) rule, ensures that improved premium payments resulting from HCC coding activities are reinvested into better benefits offerings for patients.
Payers know this. Many providers do not — which means the correlation between HCC coding, available benefits, and improved patient outcomes is also being missed. This knowledge gap inevitably impacts providers’ willingness to participate in payer risk adjustment programs.
Payers can empower providers by ramping up visibility through consistent educational programs.
Implementing these programs allows payers to walk providers through opportunities for documentation improvement and correlate those improvements with enhanced member care and benefits offerings. Once providers understand the direct impact of HCC coding on patient care and outcomes, they are far more likely to work with payers to improve documentation practices and support HCC coding accuracy.
Standardizing Risk Adjustment Programs Across Payers in the Market
Providers, who are already grappling with the complexities of value-based care, are navigating additional burdens caused by the lack of alignment and standardization across payer risk adjustment and quality gap closure programs.
Varied expectations from payer to payer translate to inconsistent responses from providers — or outright resistance to participate altogether.
Looking towards the future, payers can significantly increase provider engagement, and reduce discrepancies, by establishing clear, standardized risk adjustment protocols — within their organizations and across all health plans operating in a given market.
Standardization could lead to unprecedented documentation and coding improvement, ensuring all providers follow the same procedures and adhere to the same criteria for documenting and coding health conditions, regardless of patients’ health insurance carriers. This uniformity is crucial for generating reliable outcomes in risk adjustment, streamlining the data collection and analysis process, and making it easier to predict costs and allocate resources effectively.
Moreover, standardization fosters trust and cooperation between payers and providers. When providers are confident they are following clear and consistent guidelines, they are more likely to participate through significantly improved, comprehensive documentation. The result is a more successful, long-term collaboration that aligns goals, improves patient outcomes, and streamlines healthcare cost management.
Building the Future of Optimized Risk Adjustment
When payers support providers, risk adjustment takes care of itself.
The strategies outlined here are just the start. By proactively addressing provider pain points, building trust, and ensuring alignment, payers can improve risk score accuracy and financial performance while also enhancing their competitive advantage in the market. The result is a future where both providers and payers thrive.
Collaborative approaches to risk adjustment will never be perfect. But, embracing strategies that empower providers can move the entire healthcare ecosystem closer to the ideal.
Learn More
Discover how payers and providers can optimize HCC coding to improve health outcomes, reduce costs for health plans, and ensure providers are accurately reimbursed for care delivery.