Medicare Advantage risk adjustment in 2022: Driving to fierce and focused

In the current Medicare Advantage (MA) playing field, competition is fierce. With 39 MA health plans available to the average beneficiary in an MA contract service area, health plans that don’t offer the best value in premiums, supplemental benefits, and provider networks could be squeezed by lower enrollment and increased churn. Achieving fierceness in the face of this competition requires a commitment to excellence in member engagement, Star Ratings, and risk adjustment to ensure the plan is appropriately compensated for the clinical risk burden of its population.

To become fierce and focused in 2022, here are three key areas that MA plans should bolster within their risk adjustment programs to ensure premium accuracy, offer the best benefit designs possible, and excel in today’s crowded segment.

Connect in-home assessments (IHAs) to better care outcomes

First, let’s distinguish telephonic health risk assessments from in-home and virtual health assessments (IHAs). All MA plans should be contacting their membership to gather health status and social needs data via telephonic health assessment. This is a valuable mechanism to engage members and schedule follow-up care when needed.

Now, let’s move to in-home assessments (IHAs), which is sending a provider to the home to perform complete health status discovery and care planning. The Office of the Inspector General (OIG) within the Department of Health and Human Services has made it clear that while IHAs are a valid source of diagnoses for risk adjustment, it remains concerned that MA plans are receiving substantial payments for diagnoses collected on IHAs without providing evidence that the member’s captured conditions are enveloped in their treatment plan. This concern is echoed by the Medicare Payment Advisory Commission (MedPAC), which has recommended since 2016 that conditions not enveloped in a treatment plan and documented be excluded. IHAs have been in the headlines for several years, but in today’s environment, we now see increased oversight and penalties due to their challenges related to treatment plan compliance and documentation.

In this environment of increased regulatory scrutiny, there is zero room for error. MA plans should act under the assumption that this scrutiny will continue to increase, and therefore do everything in their power to ensure that IHAs fulfill their intended purpose: to meaningfully improve member care. This means engaging directly with members and providers to ensure that any diagnoses identified by IHAs are addressed by follow-up care with members’ primary care physician, as well as flagging IHA diagnoses to ensure they are also represented in other claims or medical records.

Add second-pass coding review for improved compliance

While the Centers for Medicare & Medicaid Services (CMS) opted to keep the MA coding intensity adjustment at the statutory minimum of 5.90% in the recently finalized 2023 MA and Part D Rate Announcement, concerns about coding in the industry remain. The industry can counter this concern in a variety of ways. One means to improve coding accuracy and compliance is to conduct an additional audit of medical records. Many plans conduct second-pass coding to add another level of rigor to the audit process, and this discipline may also add claims validation as well.

Adding this level of rigor means that health plans have greater confidence in their providers’ complete and accurate coding. Additional documentation oversight not only improves member care, but ensures that these diagnoses also appear on the member’s medical records and creates more complete data files to support care planning, chronic care management, and communication with government agencies.

Ramp up SDoH collection for better quality outcomes and scores

The MA quality bonus program tied to Star Ratings continues to be subjected to increasing scrutiny, with recent studies finding that it does not truly improve plan quality and even contributes to racial disparities. MedPAC has previously voiced its own concerns, calling in 2020 for Congress to replace it with a new incentive program that would rely on a “small set” of population-based measures and incorporate differences in members’ social risk factors (i.e., social determinants of health or SDoH), among other changes.

While standards for SDoH collection are not universally defined in the industry yet, this doesn’t prevent plans from developing their own standards and processes to collect valuable SDoH data to reduce disparities and elevate the health of their entire member population. Robust member engagement will be necessary to collect this data, delivered through culturally competent communications that recognize that each member’s health priorities are different. Improving member engagement will also directly benefit Star Ratings performance as the weight on member experience increases to make up 57% of a plan’s total rating. As SDoH continue to increase in importance across both quality and risk programs, MA plans that can not only capture this data but act on it in meaningful ways will be in the strongest competitive position.