Part 3 – Follow the Yellow and Red Brick Road – Conduct both Prospective and Retrospective Reviews for Risk Adjustment Success

The HAUTE HCC Blog with TMI:  Free HCC Resources and TIPS For 2014 – dedicated to HCC Coding and Risk Adjustment for Medicare Advantage Plans

By Holly Cassano, CPC, AAPC ICD 10CM Certified ,Director of Coding Education and Compliance for Tactical Management Inc., (TMI)

CLIFF Notes for HCC Coding – A Three Part Series on Hierarchical Condition Categories

Part 3 – Follow the Yellow and Red Brick Road – Conduct both Prospective and Retrospective Reviews for Risk Adjustment Success

Medicare Advantage plans continue to adjust around steadily declining rates as CMS turns the focus to quality ratings and member satisfaction as we move forward in 2014.   The “Risk Adjustment Machine” is expected to include Medicaid as accounting for nearly half of all spending of capitated payments over the next five years.   Risk Adjustment is also crossing over to the Commercial market, which means Payers and Provider’s must work in concert to ensure success under the RA umbrella.

Consider Dorothy , as she sets out on the yellow brick road, what do you think she would have done, if she was also given an alternate mode of transportation, like a “yellow brick monorail” to choose from, in lieu of “walking” to The Emerald City?  I mean she would save on time and overall costs by avoiding costly mistakes and delays.  Even if it meant she had to initially pay a bit more for a ride on the monorail, my instincts say she would have chosen it hands down, paid the fare and avoided the  notorious “poppy field” incident, which delayed their mission and put unnecessary burdens on the Tin Man and the Scarecrow to “get the job done”.

There is more to HCC Data Collection than just “getting the job done”.  MA Plans that focus solely on disease management to decrease costs, often overlook other Key Performance Indicators (KPI) areas, critical to success. One such KPI would be the ability to develop an effective HCC Data Collection strategy,  the main mode of reimbursement from CMS.  If a Plan doesn’t have an HCC Data Collection Strategy in place, they will soon be facing vast, network wide, under-reported HCC codes, which negatively impacts the Plan, members and providers overall due to revenue losses.

The MA Plan that chooses to focus on disease management solely,  may still benefit from a cost savings potentially of $150-$250 per member.  However, there will still be many coding deficiencies if they do not factor HCC ‘s into their business models and work on a two-pronged approach that includes both  Prospective and Retrospective HCC Data Collection.

The Plans that focus in both areas of HCC Data Collection and implement a two-pronged approach, both Prospective  and Retrospective,  will see many benefits that include the following:

- Increased Revenue From  – $1500-$2500 Per Member

- Cost Containment Via Better Disease Management

- Better Member Benefit Offerings

- Ability To Offer Providers Higher Per Member, Per Month (PMPM) Premiums 


-          Plans will be better at identifying high risk members and channel them into appropriate disease management programs/SNPs, when they utilize a two pronged HCC Data Collection approach

KPI’s for Successful HCC Reporting

-          Collection and submission of Medicare Claims and Encounter Data

-          Identify High-Risk Members With Chronic Conditions

-          Provide Early Intervention To Ensure Quality Clinical Outcomes/Improved HEDIS Measures

-          Continuity of Member Assessment form on all Plan Members

-          Retrospective/ Prospective Reviews, including Chart Audits/ Hospital Abstracts

-          Financial Review/Reconciliation

-          Web-Based Reporting/Analytics

-          Health Status Re-Determined Each Year/Assessed/Treated/Documented Annually via AWV’s & HRA’s

-          HCC Codes Reported Through Claims/Encounter Data

-          Quarterly Review of Member RAF Scores below 1.00 and unusually high RAF Scores or “Jumps” In RAF Scores

-          Document and Code All Conditions That have M.E.A.T. At Each Visit


CMS suggests that an average senior who is generally healthy should have an average RAF score of 1.00 OR lower

-          RAF scores above 1.00, suggest a patient with chronic conditions, lower RAF scores indicate a healthier population – RAF scores below 1.00, suggest a healthy patient

Don’t Get Fooled Again – A Lower RAF Score May Also Indicate The Following Issues:

-          May falsely indicate a healthier population due to inadequate and/or illegible chart documentation

-          Incomplete and/or incorrect ICD-9 coding

-          Patients have not been seen by Network Providers, so there is no HCC Data to report from

-          May be indicative of insufficient claims data submission from Network Providers

Final Thoughts

Why MA Plans Should “Skate Towards the Puck”

Wayne Gretzky, Ranger MVP, AKA “The Great One”,  has been credited with the following statement “I skate to where the puck is going to be, not where it has been.”  This is such an impactful statement and I,  like many others,  use it as my mantra.  Mr. Gretzky is stating what I would call a “winning approach,” meaning,  that if you focus on “where you want to be, instead of where you have already been,” success will be the course you chart as you move forward on the wheel of progress.

To learn more about HCCs and the information in this article, click on the following:

-          2008 risk adjustment data technical assistance for Medicare Advantage organizations RAPS Participant Guide.pdf

-          2007 risk adjustment data basic training for Medicare Advantage organizations$FIle/ra-resourceguide_120607.pdf

-          HCC blog

-          Medicare risk adjustment

-          American Health Information Management Association


Document Those HCC’s!!!


Holly Cassano, CPC, AAPC ICD 10CM Certified

Director of Coding Education and Compliance for Tactical Management Inc., (TMI)


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