Over 75% of the Medicare Advantage plans in the U.S outsource some portion, or all, of their Risk Adjustment programs to third-party vendors. Traditionally, retrospective chart retrieval and reviews make up the bulk of that outsourced work. But as the industry evolved, CMS expanded the approved interventions and acceptable data sources that can be used to capture complete and accurate diagnosis codes. To that end, health plans have enlisted the help of multiple vendors, sometimes three or more, for quality assurance.

In-home assessments, annual wellness visits, primary care in the home, inpatient care, and outpatient encounters – each one of these represents an opportunity for Risk Adjustment, Quality, and Population Health Management. Throw in predictive analytics before you even chase a chart or outreach to a member, and you have a robust Risk Adjustment program that any CFO would be proud of.

If done right with proper oversight in place, a health plan can receive funding from the government commensurate with the predicted healthcare costs of its beneficiaries. It makes sense. You need to have the right infrastructure in place to care for our Seniors and that all depends on their collective health status, or their level of Risk.

However, that opportunity is double-sided. As much as the data can help, it can hurt, and in some cases, it can inflict a financial and public relations wound that is septic to the health plan, the industry, and the Medicare community.

Tens of millions of records and supplemental data are reviewed annually, usually in just a 6-month window. This information comes in a different format from each vendor. The tools are different, the files are different, and the coders are different (most of whom no one ever meets).

A health plan with 5 vendors supporting them for Risk Adjustment can be burdened with managing multiple processes. Cascade this vendor salad to the providers, and your network is now juggling requests for data and fielding calls to educate them on HCC coding from 3 or more health plans in your community all between the months of September-January for Medicare Advantage alone. Whiskey, anyone?

Can you see where this can all go wrong? There is so much talk about the intentionality of coding. Do the providers up-code on purpose? Are the plans submitting erroneous HCCs to scam the government? How much will CMS claw-back in 2019, and how far back will they go in their RADV audit? How much money are we actually talking about?

In my humble opinion, the programs have grown, the interventions and the vendor options have become commoditized, but the industry has not matched this growth and evolution with Quality Assurance programs equal to the breadth of the program and exposure to down-side risk.

When I travel the country assessing Risk Adjustment programs for national and regional Medicare Advantage plans, the average internal audit conducted by a health plan on any one of its vendors was 5%. Let that sink in. Only 5% of the data used to calculate the Risk Scores were being audited for accuracy and completeness. There are 2 responses to that small percentage: 1) How many codes were wrong? 2) How many codes weren’t captured?

For the moment, focus on the RADV risk. That is what our colleagues in the industry are being charged with improving, and that risk can be mitigated.

In defense of the health plans, they must have some level of trust that their vendors have the necessary safeguards in place to achieve and guarantee 95%+ accuracy (standard Quality SLA), but the sample size of the audit is too small to offer any real protection. There just aren’t enough available coding resources to have an internal Quality Assurance team conduct audits that are statistically significant. Unfortunately, that excuse does not ward off CMS from conducting a RADV audit that could result in Millions in Overpayment Recovery fines.

So how do you stay out of the headlines? How do you hold your vendors accountable?

6 Tips for Quality Assurance in Healthcare in 2019

1) Build a more robust Quality Assurance and Internal Audit Program. Implementing an internal QA program should be your Risk Adjustment Department’s #1 objective in the New Year.

2) Conduct a minimum of 50% audit on your vendors and your internal coding team that is conducting 1st pass reviews. This should be an edict from your compliance department and your leadership, reflected in the budget. (Includes both retrospective and prospective interventions)

3) At a minimum, 100% of the new HCCs should be audited for accuracy and appropriateness – no questions asked here.

4) Revisit your vendor’s QA process, make sure it is sufficient and make any adjustments that will be supported by more stringent SLAs for quality. It’s worth the effort of time and money to avoid a RADV audit.

5) If justifying more QA is an uphill battle, have your new QA team look at the records for missed HCCs as well. If there is any ROI on the upside to be found, it can fund the whole QA program. Also, RA records are rich with data beyond HCCs. In some instances, those records can be used for HEDIS, Care Management, Provider Data Accuracy, Pharmacy Case Management, and Utilization Management. Optimize the record once you have it. You might not need to request a record later if you can close a gap now.

6) Partner with a vendor who can reliably scale clinicians to conduct consistent quality audits. Shearwater Health is an exclusive resource for regional and national health plans that want to build an internal QA department to mitigate risk, avoid RADV exposure, and maintain the highest level of accuracy and completeness for Risk Adjustment. Quality Assurance needs to meet the increasing demands of CMS. There is too much at stake to not consider Shearwater as your partner in Quality.

For more information on how we can expand your QA department, contact me directly or fill out a short form on our contact page.

Daniel Weinrieb
EVP, Government Programs