It may sound counterintuitive, but two patients who are attributed the same diagnosis during a patient encounter can have wildly divergent risk-adjustment coding scores.
Why? Because when risk-adjustment scores are applied, you have to factor in other variables, such as a patient’s age, overall health status and other co-occurring conditions, says Brenda Edwards, CPC, coding and compliance consultant, speaking at the Advanced Specialty Coding, Compliance and Reimbursement Symposium in Orlando, Fla.
The example of two patients who present to the office and are given the same diagnosis, in fact, underscores some of the basic guiding principles of risk-adjustment coding, Edwards says.
As background, consider the federal government’s definition of risk adjustment, which several payers, including Medicare Advantage plans and health insurance exchange plans, use to determine payments.
Risk adjustment “is a statistical process that takes into account the underlying health status and health spending of the enrollees in an insurance plan when looking at their health care outcomes or health care costs,”
states HealthCare.gov.
For medical practices, the basis of risk adjustment boils down to well-worn areas of expertise. “Risk adjustment is based on correct coding principles,” Edwards says.
Returning to the above example, let’s say two patients – Patient A and Patient B – are newly diagnosed with influenza and pneumonia. Seems straightforward, right? But now let’s consider the other, critical variables impacting the patients' risk scores. On the one side, Patient A is 35 years old and has no chronic diseases. On the other side, Patient B is 72 years old and is afflicted with a range of co-morbidities, including type 2 diabetes, chronic bronchitis and emphysema.
When it comes down to it, “capturing the difference is risk adjustment,” Edwards says, and failing to account for your patients’ complete scope of care – particularly, in this case, for Patient B – will lead to lower adjusted payments.
“Those key little pieces not carrying forward every year, they could be huge,” Edwards says. Remember that risk-adjustment plans begin with a blank slate every year – meaning your patients have zero diagnoses on Jan. 1, according to your health plan – so capturing the full range of diagnoses at every encounter is essential.