The Annual Miracle

Did you know that you have a risk score? We all do thanks to health insurance risk adjustment.

Health insurance companies use claims data to assign a Risk Score to each member. A score of 1.0 means that the patient is likely to cost the insurance company about average. The higher the number, the more likely that the patient will have higher total health care expenditures.

The risk score is calculated using a patient’s demographics (age, gender) and other health factors, called hierarchical condition categories (HCCs). Each HCC has a relative risk factor based on how complex it is to treat. Patients can also have multiple HCCs, which can contribute to higher risk scores. HCCs map to the ICD-10 diagnosis codes that you submit. Each diagnosis code indicates the level of severity of the condition indicated (i.e. Diabetes without Complications vs. Diabetes with Chronic Complications).

Risk Adjustment relies on physicians to capture the complete risk profile of each individual patient by documenting and coding accurately. And because each patient’s risk score is reset every year, HCCs must be documented annually.

But accurate documenting doesn’t only benefit insurance companies. Here are a few benefits associated with accurate coding and documentation:

1. Improving patient outcomes and promoting patient safety
2. Enabling quality-improvement initiatives
3. Promoting continuity of care
4. Ensuring correct reimbursement for some contracts
5. Identifying high-risk patients and engaging them in disease and care management programs
6. Identifying practice patterns and reducing variation when clinically appropriate

You can remember the documentation standard with the acronym MEAT. It can make it easier to ensure you are capturing the most accurate and complete information.

Monitor - signs and symptoms, disease process
Evaluate - test results, meds, patient response to treatment
Assess/Address - ordering tests, patient education, review records, counseling patient and family members
Treat - meds, therapies, procedures, modality

Example: