The Importance of Risk Management for Medicare Claims and Reimbursement

When it comes to managing Medicare claims and reimbursement, the importance of risk management cannot be overstated. To protect yourself against liability, avoid lawsuits, and get the highest payment possible, you must understand how to manage your risk.

Disease hierarchy logic

In the age of value-based reimbursement, a well-laid coding strategy is essential. A coded medical record can picture a patient’s health holistically and comprehensively. This type of data may not be the end-all for chronic disease management, but it can be a valuable tool in the right hands. Revenue cycle professionals must understand the nuances of a well-constructed coding strategy and how these strategies are utilized by external entities such as Medicare and Medicaid.

There is no one size fits all approach. Different risk adjustment methodologies use different weights to measure the severity of a member’s ailment. The algorithms, as mentioned earlier, are used to determine a member’s eligibility for coverage, but only a portion of this information is accounted for in the reimbursement equation. An optimal coding strategy involves a balanced blend of documentation, statistical analysis, and intuition. While this may seem like an overwhelming task, it can be done with the help of a competent revenue cycle professional.

While it is impossible to claim that the derived code set was the only component of the overall mix, it is crucial to recognize that the results can be challenging to reconcile. In addition to the requisite coding, modifiers can indicate altered service and procedure and modified reimbursement rates.

ESRD risk adjustment payment model

The Centers for Medicare and Medicaid Services (CMS) has developed an ESRD risk adjustment payment model for risk medicare claims and reimbursement. This new system improves the current payment methodology and helps plans avoid uncertainty over-enrollment in the future.

The new system will align payments with Medicare’s costs for ESRD patients. For this reason, Medicare as a primary payer result in fees that are 21.5 percent of the risk-adjusted capitated rate. A total of about 150 paid ESRD claims will be adjusted.

Several models are used to pay for the services provided by health plans. These include commercial risk adjustment, which serves individuals, and diagnosis-based risk adjustment, which was developed for Medicare.

Dialysis models add additional fees for immunosuppressive drug therapy, increased monitoring, and service levels. In addition to these fees, the base cost of these programs is high. As a result, these programs have significant hospitalization rates.

Unlike dialysis models, the diagnosis-based ESRD risk-adjustment system uses only medical data to make payments. In addition, it minimizes the need for additional data collection.

To participate in this new ESRD payment model, health plans must recruit dialysis facilities as owners and nephrologists as employees. To do so, they must enroll 350 beneficiaries in Medicare’s fee-for-service (FFS) program. Moreover, they must agree to accept downside risk.

One of the first steps to learning about risk adjustment is learning about the Hierarchical Condition Categories (HCC) list. HCCs are used to create a standardized list of diagnoses that have risk adjustment values. However, it is essential to note that some diagnoses may not apply to all risk adjustment payment models.

PACE risk adjustment payment model

PACE is a program run by the Centers for Medicare & Medicaid Services (CMS) that provides home and community-based care for people 55 years of age and older who need nursing home care. The program’s primary goal is to reduce hospitalizations, improve patient outcomes, and promote early disease detection.

PACE is funded by two different sources: Medicare and Private Pay. Participants can opt to receive both types of coverage or participate in just one of the programs. All PACE participants must reside in the service area of a participating PACE organization.

PACE has operated for over thirty years and currently offers services at 144 centers with 58,000 members. However, the program’s growth may cause questions about the best predictor of future costs.

A risk adjustment payment model is used to modify the capitated payments for beneficiaries in health plans. It aims to forecast the expected medical costs of enrollees better. It allows contracts to ensure they have enough resources to care for their patients.

To calculate a participant’s risk score, the provider must identify the health conditions likely to impact future medical costs. These are called Hierarchical Condition Categories, or HCCs. Each year, providers are required to identify all HCCs. Only the most severe condition is assigned to a risk score.

Audits and monitoring of value-based reimbursement programs

The United States Department of Health and Human Services (HHS) has launched many initiatives to improve the tracking of value-based reimbursement programs for Medicare claims and reimbursement. These include new fraud prevention measures and enhanced information sharing between payers.

A key objective is to reduce healthcare costs. By shifting to value-based payment models, the US government is tying payments to the quality of care provided, which can lead to better patient outcomes and more effective population health management.

HHS reported that in the past decade, healthcare costs rose faster than wages. It has led employers to push insurance companies to offer lower-cost plans. In response, CMS and other federal officials have proposed various reimbursement programs that reward providers for providing the highest quality of care at the lowest cost.

Audits are an essential component of these efforts. They identify areas of non-compliance that can result in sanctions. However, the process can be intimidating. Some audits are conducted automatically, while others require the input of an auditor who reviews medical records.

The Healthcare Fraud Prevention Partnership has expanded to 172 federal partners. Additionally, the US Department of Health and Human Services Office of Inspector General (OIG) has launched a work plan defining specific investigative initiatives.

Value-based reimbursement programs for Medicare claims and reimbursement are designed to promote the best care at the lowest cost. In addition to reducing healthcare costs, these models can increase patient access.