Diagnoses reported are used to determine a “Risk Adjustment Factor” (RAF) score, which determines the amount paid to the organization per beneficiary during the corresponding payment year. Insurance organizations are paid at a higher rate for patients who have multiple conditions and conditions with greater levels of severity, as their anticipated costs of care will be higher.
Prospective vs. retrospective risk adjustment
Two of the more commonly used approaches for identifying unreported diagnoses include “retrospective” chart reviews and “prospective” information reviews. Retrospective reviews use strict criteria to identify diagnoses that are eligible for reporting. Prospective reviews have emerged more recently as a method to identify additional unreported diagnoses using a significantly different process. The two approaches are complementary but have key differences which I’ll outline in this article.
What is retrospective risk adjustment?
Retrospective reviews may identify conditions that can be directly reported to CMS without additional health care provider involvement. This has been a popular approach with insurance organizations as it eliminates the need to engage providers and request additional documentation or clarifications. However, retrospective reviews are relatively constrained. A diagnosis may only be reported if the following three general criteria are met:
- The source document for the diagnoses must meet several eligibility requirements, including but not limited to, a face-to-face encounter during a date of service in the targeted year, an eligible location of service, provider eligibility, a valid signature, valid credentials, an acceptable specialty type, and an acceptable document type.
- The source document must contain the diagnosis as documented by the provider ( it cannot be inferred by the coding professional).
- The source document must include supporting documentation that demonstrates each reported condition was evaluated and/or managed during the encounter (with certain exceptions for certain chronic conditions). The acronym “MEAT,” which stands for “Monitor, Evaluated, Assess and Treat” is used by some reviewers. This and other approaches (e.g., TAMPER™) may be useful but are not officially recognized. Instead, CMS requires that all conditions reported meet ICD-10-CM reporting requirements.
What is prospective risk adjustment?
In contrast, prospective reviews hunt for clues referred to as “Clinical Indicators” in any available information source. They have none of the above constraints but cannot be used to report diagnoses directly. If the clinical indicators are supportive of an underlying diagnosis, they may be presented to a clinician during a subsequent face-to-face encounter. This allows the condition to be addressed by the clinician. If it is validated, it may be reported using the same criteria used for retrospective reporting.
The role of clinical indicators in prospective risk adjustment
Clinical indicators give an indication of the quality of the patient care delivered and may include information identified in any of the following sources:
- Chronic diagnoses reported in prior years (identified through claims data or review of prior year documents)
- Diagnoses in the targeted year that lack supporting documentation
- Relevant procedures, including operations and amputations (claims data or documentation)
- Medications (medication data or documentation)
- Lab values (data or documentation)
- Diagnostic study reports (e.g., EKG, EEG, etc.)
- Diagnostic imaging reports
- Specialist visits or referrals
- Clinical assessment forms (e.g., PHQ-9 scores)
- Notes created by non-eligible healthcare staff members
- Patient correspondence with the clinic (e.g., patient portal communications)
- Patient education materials
- Physical examination findings
- Symptoms
- Durable medical equipment (claims data or documentation)
- Patient-generated data
- Prior authorizations
However, identifying clinical indicators is just a starting point in the prospective review process. A large number of clinical indicators for a wide range of potential conditions may be identified per patient. It would be burdensome to present them all to a provider during an encounter with the patient. The prospective process relies upon prioritizing clinical indicators that are strongly suggestive of an underlying condition. In addition, the number of clinical indicators that point to a specific condition may be used. A skilled risk adjustment professional may help to adjudicate this process by determining if the clinical indicators are strong enough to be flagged for further review by a clinician.
A common practice is to address the patient’s health status during an Annual Wellness Visit or a home visit. The clinician may review clinical indicators and other information to determine if a suspected condition, a different diagnosis, or no related diagnosis is warranted based strictly on clinical criteria. This structured process allows diagnoses that would have otherwise not been reported to be confirmed and reported. It also has the benefit of establishing or reestablishing care for conditions that may benefit from additional evaluation and/or treatment.