From Tom's Desk


Risk Code Revamp

CMS has released "Part 1" of its 2019 advance notice of changes to MA capitation rates and Part D payment policies.


These changes represent CMS' response to the statutory language in the 21st Century Cures Act, passed last year.


The big picture:  It's a significant win for the industry.


Chronic Kidney Disease Stage 3 will be funded as a risk-based HCC. Drug overdoses and soft psychiatric diagnoses will be funded as well. CMS was also directed to include total disease burden in it's RAF calculation---and it elected to do so with a model that was favorable to overall risk score calculations.


The downside?


Lots more documentation requirements, only a little additional funding for the implementations of the changes, and the potential for a whole lot of fraud.


Also important?


Higher risk scores do not equal higher revenue. There is still a fixed amount of money going into the system.  And higher coding is still going to result in a downward adjustment of the value of each risk score.


The biggest downside of all?


These changes may further encourage Medicare Advantage Organizations to take their eye off the cost-control ball---using old, tried-and-failed utilization barriers, rather than innovative shared-risk designs.


Why is this the biggest downside?  Because when the growth in capitation dollars eventually slows, and it will, cost control is all you will have left---and those doing it best will be the ones who'll excel.


You Should Know...


Risk-Code Changes Phased-In

As noted above, CMS has released "Part 1" of its 2019 advance notice of changes to MA capitation rates and Part D payment policies.



Over the next few weeks, we'll drill down on the changes, how they affect you and how you can take advantage of them.



Remember though, if everyone raises their risk scores, higher risk scores do not necessarily equal more revenue.



Let's start with "phase-ins"



The new model will be phased in over three years.



The schedule? 


2019:  25% of payments calculated under the new model/75% of payments calculated using the 2017 HCC model 

2020:  50%/50% payment year 2020

2021:  75%/25% payment year 2021



Although this may seem like an opportunity to slowly get used to the changes, it actually represents a significant opportunity to get a jump on the competition.



See my High-Value Insight, below


High-Value Insight


Get Started Now

In the early 2000s CMS announced it was transitioning Medicare Advantage from a demographic-based to a disease-burden based payment system.


My practice caught wind of this early on---more than a year before the first year of transition went into effect.


We hit the ground running with education, chart reviews and auditing.


The result?  By the time risk-based payments were fully in effect, we were firing on all cylinders while almost everybody else was struggling to catch up.

It made an enormous difference financially.

It was pivotal.


This new model will not be nearly as impactful as the full transitioning from demographics to disease burden, but it will make a difference.



And the organizations that get there first will earn outsized benefits.



There will be costs associated with this new model:  education, compliance, system adjustment.



But you'll get the most out of your investment if you act like the new model will go into full effect in 2019---and get started now.

Because starting early is how I went from being merely high-performing to a "Guru" of excellence.


Q&A with Dr. Tom

With all these risk codes and all the feedback from my coders, I'm pulling my hair out. They're an enormous black hole, but if I ignore them I feel as if I'm losing money. How do I get back to feeling like I'm in control?



Set limits.



Risk-coding can be an enormous time suck. And the feeling of unknown loss can easily overwhelm the knowledge of certain gain.



That's just human nature.



The key is to know what you NEED to know—-and flush the rest.



Learn the most common codes that only you will be able to harvest, identify them and document appropriately.



Then relax.



You've done as much as you need.



Are there marginal benefits to a more thorough understanding of risk-coding?






Whether or not they're worth the keyboard time is up to you.

Not everybody needs to be the "Guru."



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