From Tom's Desk
Peak Risk Coding?
It’s time to be a risk-coding contrarian.
Pretty much everyone has figured out that a creating a Medicare Advantage organization (MAO) is a license to print money—-for now at any rate.
Get your product approved, collect some patients, submit some codes and let the money roll in.
Even former HHS Secretary Kathleen Sebelius and former Senator Dr Bill Frist are getting in on the action.
With the failure of recent large qui tam actions and continued reliance on toothless internal audits, enforcement is only an issue for the very small fry. There isn’t even much RAC action yet, even though it’s been mandated by federal law for almost a decade.
So code the heck out of your patients and worry about clawbacks later, that is if there are any at all.
Patient care? With such great gross revenues, just approach it like you would any old HMO—-narrow your networks, limit your physician compensation, and implement prior authorization for expensive procedures.
Just keep signing people up and the capitation dollars will roll in.
It’s not going to last much longer.
The higher the total risk scores in Medicare Advantage, the more CMS will adjust down the value of each score. They already do it to the tune of a 5% across the board decrease---a rate that is re-visted yearly. As the risk scores pile up, look for capitation rates to be adjusted down even more.
MAOs are going to spend more and more resources to collect less and less money.
Not a winning business strategy.
Certainly not one that capital investors signed on for.
Fortunately for you, it’s net revenue that’s actually matters.
So instead of creating that enormously expensive infrastructure to collect risk codes, concentrate on delivering good care through a robust primary care work-force with aligned incentives. That way, risk-code collection can be performed from the bottom-up, through your primary care workforce.
It's far less expensive, encourages internal innovations and creates systems that are anti-fragile in any payer environment.
That way, when your gross revenues go down—-and they will—-your net revenue won’t necessarily do the same.