Risk-scoring models create seven categories of patients: Notice that the seven categories represent different combinations of these four alternatives, meaning whether patients: As shown in previous examples, the CMS-HCC model quantifies different risk for the same variable for patients in different categories. the problem list in the patient’s medical record). Documentation in the medical record must support the presence of the condition and indicate the provider’s assessment and plan for management of the condition. CMS-HCC risk scores adjust Medicare payments to Medicare Advantage plans. With risk-adjusted payments, Medicare pays MA plans more money for patients with greater risk and less money for patients with less risk. Click here. For example, the CMS-HCC model does not assign this status to patients that are now disabled but originally became entitled to Medicare because of. Low income is a negative determinant of health that Medicare must factor into a patient’s risk score if possible. The CMS-HCC risk model identifies low-income patients by a patient’s enrollment in Medicaid. Meanwhile, EDS data will leverage the new APCC model, at a 50/50 split. A patient’s health status influences a patient’s financial needs. And even though the name of the model is the CMS-HCC model, variables include factors beyond HCCs. A score of 1.00 is average, with the decimal places representing percentages above or below average. Inpatient Hospitals: Penalties in the Hospital Readmission Reduction Program and/or mortality outcome measures. Some condition categories are hierarchical, but not all. The new-enrollee model is less complex because it creates risk scores without all the normal data sent to CMS for continuous enrollees. The terms risk score and risk adjustment factor (RAF) are synonymous terms that refer to the same number, meaning the output of the CMS-HCC model. Despite the differences, people using those three terms are referring to the same thing. The Center for Medicare & Medicaid Services’ (CMS) Hierarchical Condition Category (HCC) risk adjustment model assigns a risk score, also called the Risk Adjustment Factor or RAF score, to each eligible beneficiary. Prior to the year 2000, Medicare paid MA plans one rate per patient. The coefficient for HCC107 includes the coefficient for HCC108 but adds risk due to the progression in the disease hierarchy. And the CMS-HCC risk model quantifies the risk of this status as a unique variable. Incorrect or non-specific diagnoses (or patient demographic information) can affect both patient outcomes and reimbursement for the care of that patient, moving forward. There are two broad categories of these conversion factors—the demographics and the disease burden of the beneficiary. And the same variable has different coefficients for different patient categories. The source of the EDS RAF score … Instead, plans profit by delivering better care or by delivering less-expensive care. This appendix includes the full list of disease hierarchies and the complete CMS-HCC model for new enrollees. The RAF score is the sum of “conversion factors”—decimals that can adjust the county rate up or down. The seven categories are mutually exclusive, meaning CMS identifies patients in only one of the seven categories. As you can see, categories intersect with variables to create the different values of each coefficient. Be the first to know about key MACRA and MIPS information, deadlines, and expert analysis. Patients may have multiple conditions in one HCC because many conditions map to one HCC. If a patient has diagnoses in both condition categories, only the coefficient for HCC107 contributes to the patient’s final risk score. 0.105 for diabetes without complication). While HHS based its model on the CMS model, the two differ to address distinct populations and purposes: Need a PDF copy of this guide? In other words, plans cannot profit by enrolling only healthy patients and dropping unhealthy patients. Physicians may require decision support. Prior to the year 2000, Medicare paid MA plans one rate per patient. 200 Independence Avenue SW . In addition, each patient receives a Demographic RAF score based on their age, sex and whether the patient is community-based or living in a skilled nursing facility (SNF). Different patients have different variables that ultimately impact each patient’s risk. However, the Balanced Budget Act of 1997 required Medicare to start to use risk scores to adjust capitation payments in January 2000. The new-enrollee model is less complex because it creates risk scores using demographic data rather than detailed diagnoses data. Patients disabled today may or may not have become entitled to Medicare because of a disability. Disability and/or Original Reason for Entitlement . CMS requires an encounter each calendar year and diagnosis by an APRN, PA or physician. On average, older patients require more care and therefore more financial resources. Washington, DC 20201 . The CMS-HCC model quantifies risk differently for new enrollees versus continuous enrollees. Notice how age and sex affect the coefficients in the sample table below (note: the example highlights only the ages of 65-79 for brevity): You probably noticed that three of the categories are blank in the example above. The seven categories are mutually exclusive, meaning CMS identifies patients in only one of the seven categories. Notice in the image below how the solution identifies the breakdown of risk scores for each patient: To calculate risk scores for different patients, the CMS-HCC model first quantifies the risk of different variables. ultimately refers to financial risk. Overall, risk scores in the new version increased only slightly by 0.78% in our study, which is less than the 1.1% projected by CMS. became entitled to Medicare because of a disability. The quantified risk of each variable is the variable’s. Some do not. Three synonymous terms refer to the same output from the CMS-HCC model: risk score, risk adjustment factor (RAF score), Medicare risk adjustment (MRA). That’s how the originally disabled status is unique and necessary. In the traditional fee-for-service reimbursement model that healthcare organizations have been using for decades, providers are paid for the volume and types of services performed. RAF Score . Below is an example of HCC85, HCC96, and the HCC85_HCC96 interaction variable. 27 Variables include: Here’s an example that incorporates all of those variables. Lemon dropping is a term that refers to when a plan drops unhealthy patients to stop spending more on those patients. Date: April 12, 2018 . Privacy Policy | Terms & Conditions | Contact Us, Certified Documentation Expert – Outpatient, Certified Professional Compliance Officer, Risk Adjustment Paints a Valuable Picture, Understanding the HHS-HCC Risk Adjustment Model, 4 Key Areas to Risk Adjustment Documentation, Top 10 Medicare Risk Adjustment Coding Errors, Medicare Risk Adjustment: Financial Incentives May Lead to Bad Practices. That’s because each variable creates a different amount of incremental risk. Care for patients with a risk score of 0.500 is expected to cost 0.5X (half) the amount of average financial resources. Disability negatively interacts with some conditions. Below is the list of disabled/disease interactions. As such, payment depends on complete and accurate reporting of patient data. The CMS-HCC risk model quantifies the impact of those interactions for institutional patients. Total RAF score 2.223 PMPM payment $1,778 Annual payment $21,341 Roberta Smith’s clinical picture: Type 2 diabetic with CKD stage 5, chronic diastolic CHF, & COPD Demographics Diagnoses supported in encounter documentation Interaction coefficients added by CMS Risk score Risk adjustment payment Provider impact – While there is a standard rate paid by the government for every member enrolled in the Medicare Advantage plan, reimbursement increases when the risk assessment profile is … • $10,000 ÷0.92 = $10,970 Risk Adj Cost • A Higher Acuity Score means sicker patients are being cared for with lower costs. Able Health is a Qualified Registry for data submission under the Merit-Based Incentive Payment System (MIPS). the problem list in the patient’s medical record). Continue reading to learn more about each of the variables in the scoring example above. Some codes have RAF value. Age and sex influence a patient’s health status. Attribution RAF scores of less than 1. Different patients have different risk and, therefore, different risk scores because no patient is the same. That’s because a risk score is an actuarial tool. Here’s how that works. Without exact income information for each patient, a Medicaid status is CMS’s best indicator of patient income. Each chronic medical condition diagnosed impacts the RAF score of a patient. A RAF score, or risk adjustment factor score, is a medical risk adjustment model used by the Centers for Medicare & Medicaid Services (CMS) and insurance companies to represent a patient’s health status. the problem list in the patient’s medical record). The model quantifies the risk by establishing unique variables for different HCC counts. Medicare uses the HCC method to calculate the risk score. highlights CMS’s use of risk scores to adjust its monthly capitation payments to MA plans. The 2019 benefit year final HHS risk adjustment model factors included in the HHS Notice of The CMS-HCC risk model identifies patients that originally became entitled to Medicare because of a disability. Payment rates may vary based on a patient’s predicted level of risk (e.g., the expected cost to maintain that patient’s health). 7/6/17 5 • CMS = Centers for Medicare and Medicaid Services • HCC = Hierarchical Condition Category • A prospective risk adjustment model that uses retrospective demographic data and medical diagnoses to calculate a risk score that predicts future health expenditures • The … Care for patients with a risk score of 2.000 is expected to cost 2X the amount of average financial resources. That’s how risk scores quantify and compare expected costs. Centers for Medicare & Medicaid Services . The table below demonstrates the difference: Some HCCs negatively interact with other HCCs (aka comorbidities). 2.659 for metastatic cancer and acute leukemia). These relative factors contribute to the patient’s RAF. The interaction coefficient adds to the coefficients for the individual HCCs. CMS created risk scores to adjust Medicare’s monthly capitation payments to MA plans. Medicare uses the CMS-HCC model to calculate risk scores that quantify and project the financial risk of each Medicare beneficiary. The term risk adjustment factor highlights CMS’s use of risk scores to adjust its monthly capitation payments to MA plans. Note: the CMS-HCC model quantifies risk differently for continuous enrollees versus new enrollees. 2.718 if community, non-dual, aged and 3.375 if institutional). A beneficiary’s RAF is based on health conditions the beneficiary may have (specifically, those that fall within a Hierarchical Condition Category, or HCC), as well as demographic factors such as Medicaid status (defined as having at least one month of Medicaid eligibility during the base year), gender, aged/disabled status, and whether a beneficiary lives in the community (i.e., beneficiaries who reside in the community or have been in an institution for fewer than 90 days) or in an institution (i.e., beneficiaries who have been in an institution for 90 days or longer). San Francisco, CA 94103, are synonymous terms that refer to the same number, meaning the output of the CMS-HCC model. To learn more, schedule a meeting with an Able Health expert. – PY 2019 coding adjustment factor) X 75% = portion of the risk score from RAPS & FFS Portion of risk score based on ED, RAPS inpatient records & FFS data using the 2019 CMS-HCC model (i.e., updated CMS -HCC model without count variables): 25% [(raw risk score from ED + RAPS inpatient records + FFS diagnoses) / (PY 2019 normalization factor It also tracks captured and uncaptured HCCs to automate chart prep and identify patients to recall. The RAF is used to adjust capitated payments for beneficiaries enrolled in Medicare Advantage (MA) plans and certain demonstration projects. Patient categories identify, disabled status, but they do not identify. Like all variables, each HCC has a coefficient that changes based on the patient category. Hierarchical categories represent disease hierarchies, meaning progression and severity of a disease. The term. Sign up to receive alerts about key MIPS and MACRA information and dates. In other words, for the same variable, the coefficient is different in the seven different patient categories. If Medicare’s baseline capitation payment (aka benchmark rate) is $950 per month, Medicare would pay a MA plan the following annual totals for each corresponding RAF (note: benchmark rates are specific to each county): As you can see, the word risk in the terms risk score and risk adjustment factor ultimately refers to financial risk. Some patients have few variables while others have many. s is a term that refers to specific factors that influence the health status of patients. For example, the coefficients for diabetes with complication (HCC18) are the same for diabetes with acute complications (HCC17). That’s why age and sex are both variables. Chronic and some Acute Conditions . Approximately 10,000 diagnoses, out of the approximately 70,000 diagnoses, map to one or more of the 86 HCCs. That’s because a risk score is an actuarial tool. HCC codes are not always intuitive. The model quantifies the impact by establishing unique variables for specific interactions. The following example shows how a plan could gain a financial advantage by enrolling only healthy patients if Medicare paid a flat rate for each patient, instead of an adjusted rate: With risk-adjusted payments, Medicare pays less money for healthy patients and pays more money for unhealthy patients. Variables with higher risk have higher coefficients (e.g. The CMS-HCC risk model quantifies the risk of the count of HCCs for a given patient. If you need a better way to calculate and track risk scores, consider using the Able Health risk scoring solution. This guide explains the model for continuous enrollees because it’s much more complex. Note, however, that not all HCC coefficients increase within a disease hierarchy. Demographics. In 2003, the Centers for Medicare and Medicaid Services (CMS) implemented Risk Adjustment Factors (RAF) and Hierarchical Condition Category (HCC) coding to identify individuals with serious and/or chronic illnesses and assign them a risk factor score that is based on a combination of demographic information and reported diagnoses. In the example below, notice that vascular disease progresses across different condition categories: HCC107 and HCC108. What is a “Medicare Risk Adjustment Factor (RAF)?” The purpose for the Centers for Medicare and Medicaid Services (CMS) to conduct Risk Adjustment Factors is to pay plans for the risk of the beneficiaries they enroll, instead of calculating an average amount of … The CMS-HCC risk model identifies patients that. To learn more, schedule a meeting with an Able Health expert. Medicare Advantage and exchange plans are paid based on patients' RAF scores. Able Health identifies uncaptured HCCs in two ways: 1) diagnoses billed on claims in previous measurement periods and 2) diagnoses in a patient’s problem list that have never been billed (i.e. The Center for Medicare & Medicaid Services’ (CMS) Hierarchical Condition Category (HCC) risk adjustment model assigns a risk score, also called the Risk Adjustment Factor or RAF score, to each eligible beneficiary. HCC reporting for an 82-year-old female: Scenario 1: RAF base score 0.7 – Based on demographics for an 82-year-old female - age, sex, community vs. SNF, Medicare/Medicaid eligibility The terms risk score and risk adjustment factor (RAF) are synonymous terms that refer to the same number, meaning the output of the CMS-HCC model. The term risk adjustment factor highlights CMS’s use of risk scores to adjust its monthly capitation payments to MA plans. Actual Medicare payments: $11,400 (average cost) X 5,000 = $57,000,000, Actual plan costs: $5,700 (0.5 risk score) X 5,000 = $28,500,000, Financial advantage: $57,000,000 (payments) – $28,500,000 (cost) = $28,500,000 (margin).
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