A shift is taking place in payment under Medicare. The Centers for Medicare & Medicaid Services (CMS) has announced the goal of having all Medicare beneficiaries in an accountable care relationship with a healthcare provider by 20301.
With 99% of non-pediatric physicians already in the Medicare program2 nearly every primary care provider in the United States should be thinking about the implications for their practice and how they can transform to meet the needs of these new payment models, often called Value-Based Care (VBC).
While it would be great if clinicians could stay focused on care delivery, they are being put in the position to become experts on payment, coding and risk models. And primary care practices are having to play catch-up. What is out there to help doctors stay focused on care delivery, while at the same time build the processes necessary to get the most from these new reimbursement models?
According to McKinsey, between 2021 and 2025, value-based care will grow from ~15% of insured lives to 22%—nearly 65 million people in the US.3
McKinsey estimates that as early as 2025, one in five insured Americans will be in a VBC model.3 Primary care practices need to pay attention to the requirements of these changing payment systems to ensure that they are getting the most value for the quality care they provide. This white paper examines:
Traditional fee-for-service (FFS) has long been the standard for payment in Medicare plans. But the federal government is transitioning to alternative payment models that emphasize value over volume. The impact is already evident in practices across the country. Nearly half (48%) of all medicare beneficiaries are enrolled in Medicare Advantage (MA) plans and that percentage has more than doubled in the last 15 years.4 Physician payment under those plans is also increasing.5
The goal for the shift to VBC: VBC focuses on patient outcomes and how well healthcare providers can improve quality of care based on specific measures, such as reducing hospital readmissions, using certified health IT and improving preventive care.
According to one practice that is using the value-based model:“Benefits of value-based care are lower costs, higher patient satisfaction, reduced medical errors, and better-informed patients.”6
“Under value-based care agreements, providers are rewarded for helping patients improve their health, reduce the effects and incidence of chronic disease, and live healthier lives in an evidence-based way.”7
VBC looks at a practice’s patient panel, including their risk factors and chronic conditions. It then determines payments based on those measures.
“The goal is straightforward but ambitious: Replace the nation's reliance on fragmented, fee-for-service care with comprehensive, coordinated care using payment models that hold organizations accountable for cost control and quality gains.”8
Yet many primary care practices are playing catch-up in understanding what is necessary to be successful in these new payment models. They are unfamiliar with value-based scoring systems, and don’t yet understand the data that drives risk scores, reimbursement, and what infrastructure is needed to make a successful transition from FFS to VBC.
VBC is driven by data, as providers must report to payers on specific metrics and demonstrate improvement. The driver of appropriate reimbursement for VBC is accurate documentation and coding. Reimbursement is determined through “risk adjustment” for the practice based upon the demographic data, hierarchical condition category (HCC) codes and the risk adjustment factor (RAF) assigned to each Medicare patient served by the practice.
Hierarchical condition category (HCC) coding: A risk adjustment model created by the Centers for Medicare & Medicaid Services (CMS) to estimate future health care costs for patients.
Risk adjustment factor: Payers assign patients a risk adjustment factor (RAF) using HCC scores and demographic factors, such as age and gender, which factor into the calculation.
The HCC model was initially employed by CMS to adjust capitation payments (fixed payments each month from CMS to plans/providers) to Medicare Advantage plans but is now used to calculate expenditure benchmarks for Medicare Shared Savings Program (MSSP) Accountable Care Organizations (ACOs) as well.10 As noted by the American Academy of Family Physicians, if coding isn’t accurate physicians lose out on appropriate reimbursements for the care they provide:
“[Value-based payment] arrangements use a practice’s performance on cost and quality metrics to determine revenue, which means risk adjustment can have a direct impact on a practice’s revenue. When risk scores do not accurately reflect patient complexity, it may appear patients had higher costs and/or lower quality outcomes than would be expected. In certain payment models, this may cause a practice to fall below quality and cost performance targets and potentially miss out on the opportunity for shared savings.”11
“When risk scores do not accurately reflect patient complexity, it may appear patients had higher costs and/or lower quality outcomes than would be expected.”11
With VBC, physicians are reimbursed for the complexity of their patient panel. Physicians also take on the risk—they cover the costs for all the care of the patient—from primary care to specialty care and tests and ED visits. So coding appropriately to ensure higher levels of reimbursement for those patients that require additional care and intervention is fundamental to success in a VBC practice.
But how much do physicians understand about the unique HCC and RAF coding structure in VBC?
In order to better understand physician perception and readiness for the transition to VBC, Robin Healthcare conducted a survey of primary care physicians in July of 2022. The sample included only those who reported some familiarity with the concept of VBC.
Of those surveyed, one in four (25%) physicians report that more than half their patients are in VBC programs. Among all surveyed they averaged one in three patients (35%) in a VBC model. Three quarters (76%) of those surveyed expected the number of VBC patients they care for to increase in the next two years (none of the physicians surveyed expected a decrease).
The majority of those surveyed have a positive (38%) or neutral view (33%) of VBC vs FFS. But looking at the results two key issues are revealed:
Key finding 1: There is great distrust in payers as partners in VBC.
Only 23% of the physicians surveyed trust private payers as partners in VBC and 27% trust public payers. This lack of trust stems from:
Respondents report that consistent data formats and sources and simplification of HCC coding would help build trust in the model.
Key finding 2: Physicians lack familiarity with VBC coding and data.
For practices that transition to VBC—taking on significant financial risk in doing so—appropriate coding and scoring can make or break a practice’s financial future. HCC and RAF scores are the centerpiece of payment structures under VBC. Yet 43 % of primary care physicians describe themselves as not at all familiar or not so familiar with HCC codes. And approximately one in three (31%) of primary care physicians are not at all familiar or not so familiar with RAF scores.
According to the Medical Group Management association:
“As risk-adjusted payment models become more prevalent, providers and coders alike will be required to break out of the mindset of fee-for-service coding and change our ways. Not only will our diagnosis coding establish medical necessity for the visit, it will play a crucial role in determining patient risk scores and, ultimately, reimbursement.”12
The use of the most up-to-date data to drive coding at the point of care is key to running a successful VBC program. Selecting the most specific and accurate HCC codes for a patient's condition determines the RAF score and the reimbursement that the clinician receives for providing care for the patient. The American Academy of Family Physicians13 highlights important factors that make HCC and RAF scoring an uphill battle for practices:
(1) Deep review of the patient’s entire medical record and history
During an annual wellness visit, physicians must address all chronic conditions and open care gap measures to ensure nothing is being missed. They must also develop treatment plans and discuss each of these conditions with the patient. It is important to note that primary care providers must code not only those conditions they are treating, but those conditions being treated by other specialists.
The challenge of course is that physicians’ time is limited. Culling the entire patient history through all available health information sources (previous health records, EMR, and health information exchanges) is time consuming.
(2) Selecting the most specific HCC code
While many doctors have learned to be good at coding, coding isn’t the primary focus for physicians. In fact a whole industry has developed with experts in ICD-10 and HCC coding. Maintaining current medical knowledge base is a challenge enough—let alone trying to be an expert on ever-changing coding rules.
In addition, HCC coding also doesn’t necessarily reflect the way doctors think. Physicians work to address all the conditions their patient has. HCC coding combines conditions. So knowing what the right code is for the combined issue (for example: diabetes vs. diabetes with ESRD) plays a significant role in the RAF score, and has significant implications for physician reimbursement.
Given the frequent changes to the rules from payers, coding is a process that, over time, can be supported with automation and coding expertise oversight.
Bottom line, as the recent Robin survey showed, physicians don’t have a deep understanding of HCC codes and RAF scores—both of which are vital to accurate reimbursement under VBC payment models.
To be successful participants in VBC, practices need to capture vital information from each clinical visit (especially an annual wellness visit) and leverage data from all available resources (EMR, health information exchange). But this can be a challenge and distraction for clinicians who want to focus on their patients, not their computers, during their patient encounters.
Appropriate codes are vital in this model and the coding for HCC is based on ICD-10 codes that are updated annually. Hiring more coders may not be the best answer. Non-clinical staff are in short supply across the country.15
Comprehensive analysis of patient records: Smart technology can cull through the patient’s current and past records and provide the physician with a comprehensive list of all the health issues for the patient. The physician can discuss each of these with the patient and capture it in the note.
Identification of high-risk patients: Data analytics can also help determine the highest risk patients in a panel—those that will need frequent evaluations, support and follow-up. Focusing on these complex, high risk patients is key to ensuring the best outcome and resource utilization.
With VBC, physicians have taken on the responsibility to keep their patient panel healthy. And they have taken on some or most of the financial risk if they get sick. Understanding those that need the most support and follow-up can ensure that they stay on track with their care plan and don’t miss medications, appointments, or treatments.
Driving accurate HCC codes: Smart assistant technology can support physicians in VBC by accurately capturing all of the data from the clinical encounter to drive optimal HCC coding without disruption to the patient encounter or clinical workflow. Additionally, AI technology (with human oversight) can populate the clinical note for review by the physician.
“In the room” technology, including video capture, to capture data from the entirety of the patient encounter.
AI-based coding technology that understands the latest coding changes, reporting requirements and data necessary to accurately submit HCC coding to drive RAF scores that reflect your practice.
Human oversight that includes review of the AI-driven codes by experts, before they are passed to the clinician for final review and approval.
Technology-generated reminders that notify the care team of the periodicity of reporting requirements and trigger scheduling of annual wellness visits. Triggers can also be set up for notifications to care managers to help support those most at risk.
The transition to VBC should not be an additional burden to already overworked primary care physicians and staff. New technologies like the Robin AssistantTM from Robin may be able to help.
Technology like Robin’s can review the entire clinical record, including previous encounters, claims data and information exchanges, to pull the information that is needed for the clinical encounter. This ensures that all conditions are identified, treatment plans are developed and coding reflects all the conditions for that patient.
During the encounter, smart assistants like Robin’s use natural language processing to capture the entire patient-physician visit. There's no need for stilted, descriptive language to engage the technology. And the technology automatically parses each session and captures all of the data from the clinical encounter. This ensures optimal HCC coding without disruption to the clinician's workflow.
And the technology should incorporate human coding expertise into the equation. For example, at Robin our team behind the scenes is trained in VBC and the latest ICD-10 coding, as well as clinical documentation preferences, so they can double check every entry and correct any auto-generated errors.
“We built Robin from the physician’s perspective, pulling technology and expertise from other industries and combining it with real-world practice experience. Natural language processing and automation provide speed and scale. Human review delivers context that machines can’t match.”
Kathleen Myers, MD | Chief Medical Officer, Robin
Learn more about how technology can support your transition to VBC. Visit robin.co or contact us today at firstname.lastname@example.org.
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